Let's see how smart Veeky Forums is

Let's see how smart Veeky Forums is.

Let's say there's a market where a service that costs $0.3 to provide costs $1.75 to the customer on average. Only 2 providers of said service in the market, and both operate on the same level. It's not a very specific market either and is focused towards consumers, and on average I would say each person requires their services at least once a year.

I, however, can provide the same service for literally pennies. I can cut them down to $1 even.

Here's what I'm wondering, what's the best way to overtake the market? Just flood it with low prices? Or keep prices comparable?

Just trying to figure out the best way to make bank in this situation.


PS. Also, the dollar prices aren't the same as real ones, but the ratios are pretty much on point. They're making even more than $1.75, around $2.9 on some products, the cost of all of which is under $0.3.

Other points to note, I'm in a relatively small university town, 60k population.

people wont buy homemade condoms

>how do i compete with small oligarchy with a 500% markup when i can make a 1000% markup
idk m8 maybe just scalp the shit out of them til one of them is forced to cheat on the other

You don't need to undercut them by your upper limit to push your competitors out. They sell at 1.75, you could sell at 1.50. The biggest thing as a new entrant is going to be to market your product effectively, perhaps an initiation sale lower than that. What are the differences between your product and theirs? Are you able to package it with a quality as high as your competitors? And what about availability? Are you factoring in a markup for any retailing services you may need?

Keep prices comparable at first, using your extra margin to create a marketing campaign that your competitors can't keep up with. Like said, you can also use this cost advantage to offer retailers lower COGS if that's how the product is sold.

Once you've reached the point where you can simply remind consumers of your brand instead of advertising the value of the product, drop the price halfway, so you're still getting better margins than the competition *and* solidifying your dominance.

Doing it this way will guarantee your success OP, godspeed. If you want to thank me for this information, my ETH address is 0x0100c7290050846C192ff639aFBB870dfd70f5D4

So both our products have the same quality. I'm thinking of advertising my service by putting flyers up in my university, in my apartment building, on top of my competitors' ads on bus stops, speaking with my leasing office letting them know I'm going to do this so they can send people my way as well, and post on Craigslist.

So what I'm doing is iPhone screen repair, and since I don't want to bring customers to my apartment, I'm thinking of asking them to come to the library and I can fix in front of more people.

Any other creative tips to get my name out there? I'll try to make sure every single customer saves my name in their phone too.

Also, I'm OP. Just posting from my phone.

If you charge $1 and it cost $.3 to make, it will be a race to the bottom as they try to drive you out
all great for the consumer, but terrible for you.

Listen to this user OP. These other companies likely have reserves, and can take a temporary loss if it means driving you out.

raise the prices and say customers pay more for quality

Don't start a price war. Its just a race to the bottom and everyone suffers. The winner will be whoever has the deepest pockets which I'm assuming isn't you.

Your biggest issue is going to be making sure you look as professional as your competitors. Doing it in the library is kind of a good idea in the sense of marketing but it doesn't sound too enticing in terms of presentation, but I guess you cant really rent out a nice space to do it cost-wise, so maybe it's for the best.

As for creative ways to get your name out there, I think traditional ways would be a good starting step. Seeing as most people with a broken phone screen will probably know someone else with the same problem, you could probably offer a buy 1 get 1 discounted sort of system.

These guys have a fair point, but I think as long as you market outside of their territory you'll be fine for quite a while. If you're operating in a student-driven area, word of mouth is a great way to get word around. You just want to make your entrance big so you get a strong reputation early. As for price wars, if you start by undercutting and use that to build loyalty, by the time prices get low your customer loyalty will be more valuable than the price difference from competitors, especially in uni areas. Being a student is a really good position to market from, so you can use that to your advantage too.

How long does it take to repair a screen usually?

Bumping for this. Any good ideas on getting myself out there?

study after study shows customers think that because something cost more, it is better

Also sorry these ideas are all over the place, im just kind of typing whatever comes to mind

Yeah but people are also more inclined to support the "shop local" idea, and students are a lot more likely to support other students than big pocket businesses.

well a counter point to that would be that students are on a limited budget and if money is tight they might give up on the shop local idea

I can't rent a place, nor start an official business. I'm an international student, so it has to remain a single man operation.

A buy 1 get 2nd repair 50% off seems like a good idea, similar to what I was thinking that is for each referral I get I will give the referrer $10 cash or 30% off the next repair. I assume college kids would love to get their hands on free cash.

10-20 minutes.

Can you compete with them on anything other than price? No? Then compete on price.

These people are idiots. Being the low cost firm, ESPECIALLY if they have higher fixed costs than you, is a great position to be in.

Yeah thats a good call too. with that in mind I'd focus on solidifying your image as the cheap guy that only people who are in the know go to, kind of like the situations you get with mechanics if that makes any sense.

Maybe you could start off with a big day of just marathoning fixes in the lib with a first-day discount or something, dish out referrals there that bring prices to just above that (based on your numbers before, maybe a first day price of $1.25, referral price of $1.35 and a resting price of $1.50)?

You could also do it as a cash-back scheme. Its hard to explain, but look into the economics of reference points. If you say people pay $1.50 and then get the $0.25 back, the net cost essentially feels smaller to the consumer than the $1.25. Its weird, but it's psychology and it might work if you want to get tricky. Would make the process feel a little less approachable in a way though, overcomplicated in a way.

stupid posts
>costs .3 to make for both OP and competitor
>competitor is established and has more funds (probably)
>OP tries to cut price to $1
>competitor goes to .9
>OP eventually goes to .3, breaking even not including labor
>opponent goes lower because he has more funds and can go into the red for longer than OP

Why not approach the two businesses selling 30 for 175, tell them you intend to sell 30 for 100 and let them pay you 35 to stay away? You'll get the same 70 except you'll do nothing.

Sounds good on paper but probably impossible to do in reality.

Well keep in mind they do have to pay rent and wages, but consider how much they're ripping people off, they must have a large stack of cash.

>they must have a large stack of cash.
Even if they don't, they just need $1 more than you to beat you out of the market.
Good luck user.

Once more, onto the breach

Ugh bump

>trump is literaly Hitler how could Bernie Sanders the cuck jew lose
>omgsh it's rigged the establishments puppet Clinton didn't win despite mass false news and celebrity shilling

You're on the wrong side faggot.

Offer a free blowjob after every 10 repairs. How likely is it that someone is going to break their phone 10 times just for a bj? I mean I would, but how many other people would?

1/2
what about liability?
especially with newer phones, where the screen and various elements are tied together, like the fingerprint sensor on the newer iphones.

a lot of the price of professional electronics/computer repair is due to liability and insurance.
what happens if the device stops working within a day of your "repair"? what about within a week? a month? a year?
no matter what the reason, they will demand you fix it because you just became the person that did something to the phone, so it must be related.
so in all those cases, what if it is your fault, what if it isn't? what will you do about those cases,
also, how will you deal with replacing a screen only to find out that wasn't what would fix the phone, do you think the customer would pay for a repair when it doesn't fix their problem?
or even worse, what if, in some case, you actually do something that somehow breaks the device, or causes loss of information, what do you have in place in case that happens?

basically, you're thinking of I can provide screen replacement for cheaper, but what you need to realize is that the customer is not looking only for the replacement of the part of the phone that is the screen. they are looking for a way to fix a broken phone. which is what your competitors realized and have equipped themselves to deal with.

the numbers, like in most cases, probably follow the 80/20 rule in some way, meaning 80% of your profit will probably come from 20% of prospective clients, but also, that 80% of your difficulty will come from 20% of your client base. Assuming the worst case scenario, that the 80% difficulty is due to inability to fix issue, failed repairs, and accidentally fucking up the phone, what do you think that will do to your reputations and market?

2/2
being unable to serve, or even harming 20% of your client base is not good. especially considering the above notion of customers wanting a fix, which means even if you can replace the screen, but that wouldn't fix the device, the customer will blame you and judge you negatively because of their own misinformation about the service you provide.

I don't mean to stomp on your dreams, because i've thought of this before, and it can be a very lucrative business, but just make sure to take this into account. even if you only break 1 phone out of every 100, with the cost of replacement being $500 to $1000 for newer phones, that will wipe out profit pretty fast.

Christ man, get yourself together, you shouldn't be this triggered - we won. President Trump is cucking out on DACA and embracing kikes left and right, but we'll get the wall... maybe. I voted for him.

Cough*sucker*cough
There will be no wall, no prosecution of the Clintons, no draining if the swamp, no trade sanctions against China, nothing. Fact facts: you got played son.

>Let's see how smart Veeky Forums is.
>I voted for him.

Apparently Veeky Forums isn't very smart.