What if the prices for everything were the same?

What if the prices for everything were the same?

 

This whole price parity issue with Amazon over the past few days as got me thinking. What if the prices for everything were the same?

Let’s imagine for a few minutes what would happen if we say, all governed by a communist government worldwide and one of the parts of the establishment was that for all products, the prices had to be the same.If Prices Were the Same?

I mean everything, from a can of coke to a Plasma TV. If it’s exactly the same product it has to be exactly the same price set by a third party, no if’s, no but’s and you go to jail if you break the rules. (The jail part is harsh, but I’m just making the point).

Now before you start picking holes, unbranded goods would fall into categories, for example, a printed T-Shirt, regardless of design or material would be a fixed price. All broken or refurbished goods have to be scrapped. Every single product is categorised and has its own fixed price, regardless of country of origin or point of sale and cross-border trade was not allowed.

How Would You Differentiate Your Business?

Humouring me for a few moments, that everything businesses product has to be sold at the same price as their competitors.

What would you do to to compete in a marketplace where everything was equal as far as pricing is concerned?

Let me know your thoughts in the comments box below.

7 replies
  1. leftmyreply
    leftmyreply says:

    Hi Matt,

    That’s food for thought… Assuming we’re in the web sphere:

    To get the sale:

    1. You deliver within hours not days or weeks.
    2. You allow them to split the payment of the item over x number of stage payments or defer for several years. Works well for some electronic retailers in Australia.
    3. You offer free product (not allowed in the communist example I guess) or service or competition e.g. installation if appropriate (covered by Dave above).
    4. Create a sense of community or belonging to the products you offer or offer a subscription model or lock in via a device – similar to netflix in the US or ITunes or Spotify or Amazon with the Kindle (they missed out on the ipod). They are then more likely to buy from you rather than seller x.
    5. Turn the product into a service (think netflix or spotify above)

    To get more margin:

    1. You deliver using the cheapest service available. Second class, Standard parcels, bicycle. Like amazon with their delivery boxes trial in London or itunes with their over the net delivery of tunes.
    2. Automate processes to achieve most efficient and/or cheapest processing
    3. Negotiate the best trade rates (assume that’s out in the scenario as the trade rates would be the same right :)

    Interesting thinking that Products are continually deflating in price generally except perishables, and services generally are inflating in price.

    Cheers,

    Dave

    Reply
  2. Matthew Ogborne
    Matthew Ogborne says:

    Howdy,

    I proposed this question a couple of times yesterday in conversation and we went through the obvious answers:

    1. Because the customer service is excellent
    2. Guarantees & reassurances
    3. Excellent Descriptions
    4. Trading history
    5. Location

    These are the ones I could remember and there were others too, but they were skirting around the answer that I was to dig out.

    All of the above are assumed factors. Excellent CS is assumed, Guarantees are well covered by UK law (unless you go one stage further with back out clauses that benefit the customer, think Javari with 365 day returns), good to excellent quailty descriptions are also assumed, the same that you will have some trading history (which marketplaces aid your business with feedback counters and logo’s) and to a degree location is generally fixed and is only really applicable to impulse buys while shopping in the real world or narrowed to the same country origin as the customer.

    May be, just maybe, you might want to consider that someone (and lots of them too) may want to buy from…

    You!

    How could you make your business ultra personal to your customers?

    Matt

    Reply
    • Dave Furness
      Dave Furness says:

      This is a hard one for me, i noticed you stated communist in the article, and after spending too many years studying Politics, Communism is a scary prospect and one that can be manipulated for many differing factors.

      Assuming that the communism is limited, then the idea of competitions is an interesting prospect. With every purchase offer a free entry into a prize draw to win ‘Something’

      I believe the key here is offering a service for free which sets you apart from everyone else, in retail shops this isnt as difficult, maybe simply having refreshments on offer, or a ‘Man area’ in womens fashion shops where they have comfy chairs and a TV etc.

      Moving this online is a totally different ball game, I think all the tricks that we already know about would be a necessity rather than a ‘nice to have’. Offering product demonstrations through Video, a good intuitive mobile site, ensuring visibility on sites such as Voucher Cloud and Groupon etc. Product and company reviews would be more important than ever, as perhaps the only true distinguishing factor would be that of personal recommendations.

      What you reckon?

      Dave

      Reply
      • Matthew Ogborne
        Matthew Ogborne says:

        Howdy Dave, Happy Friday!

        Ah I was using “Communism” as the extremity to make my point, maybe not the best use of examples. My apologies.

        or a ‘Man area’ in womens fashion shops where they have comfy chairs and a TV etc.

        Ace idea!

        I think you’re already going down the lines that I was intending, how are you different if the one thing that some believe is the most important factor, is no longer a factor any more?

        Matt

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