What do you think of my business model?

I have been thinking for some time and im thinking whether will it work or not.

Everyone is competing to be the cheapest in your industry and it looks like bloody battle for everyone.The profit margins gets lower each day as you want to outwin in the price game.

Solution?

When competitors' price goes low,we go much higher instead.We brand our business as world class quality and advertise in quality places.We provide better quality to justify our price.We do everything opposite of what those cheapos do.

Anyone have any feedback on this?

 

If the market sells a product for $100, you won't sell your product for $200. Once maybe. But no long term here. Sell at the right price and great customer service will do the best. But yes, a good image, a good packaging, can sell a product for higher.

 

You are refering to the power of branding. In theory it will work, but the cost of creating a supirors brand name takes years and a lot of money! It will also not work with consumables.

 

The big thing is what you are selling. I remember hearing about a profit study, that found that corporations once did a marketing study, and found that they would sell more products if the price was slightly higher (conspicous consumption basically). This won't necessarily work though, because it might be a product that you won't be able to out-quality, and most people on the internet are smart enough to look for reviews and see if your product would be worth it.

 

I don't see why not.
If you create a niche that is not available anywhere else, you can eliminate the competition. If you offer the same as averyone else, then people will shop price.
not everyone drives a Kia, some people drive a Lexus.

www.ecopainting.ca

 

You are right Vigor. Its a bit like Sainsbury's (a supermarket) here in the UK. Have a much higher-end image than the other supermarkets so a lot of there stuff costs more than competitors - and we are talking about everyday food!

So it is possible, and its nothing new. But not something you can just start!

 

In theory this would work if you are on a market stand next to your competition, but not on the net. And certainly not overnight.

 

Thanks for the input.It's defintely not new. did anyone here use this method and had a positive result?

 

I have, with a hosting company, and it did work. However, this was because my target market was NON-web savvy and NON-web familiar people. If you offer the right product, present it the right way, and target the right market you will be fine. If you are asking about all this for a hosting company then shoot me a pm and I can give you more details of how I got my hosting company getting $1500/mo income and spending less than $100 per month on marketing.