June 4th, 2010 . 10:06 am
Beating the Commodity Trap - Part I
Posted by Shustir Blog Entries
by Margo Upson
Having difficulty selling your product or service? You might not be the only one, and your problems might not all be stemming from the economy.
Even if you were the first to offer a product, chances are other companies quickly followed suit. You may have carved out a niche for yourself and your company, and maybe that brought you a lot of business, but there's no guarantee that things won't change down the road.
Let's say that your company, Company A, sells ice cream scoops. Everyone is excited about your product, and sales are through the roof. Then Company B comes along, and they sell ice cream scoops in different sizes. Company C creates a scoop with a better handle, and Company D offers a very similar product to yours, but for half the price. Now, you have competition, and they're all offering customers a better product, or a better price, than your original scooper. If all you sell are ice cream scoops, and if you don't change your product to match or surpass the competition, your sales numbers are going to fall.
This scenario describes a commodity trap, and it can happen to any business, big or small. A commodity is something that is interchangeable with another product. Nothing special sets it apart. If your product has become a commodity, you need to shake things up a bit to make it exciting again. There are a few different ways to do this. You could start by updating your product or services. What are your competitors offering? How can you make it better? Regularly improving on your product or services can keep your company ahead of the competitors. Take your original ice cream scoop, and add in few new features.
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Check back soon for Part II
Having difficulty selling your product or service? You might not be the only one, and your problems might not all be stemming from the economy.
Even if you were the first to offer a product, chances are other companies quickly followed suit. You may have carved out a niche for yourself and your company, and maybe that brought you a lot of business, but there's no guarantee that things won't change down the road.
Let's say that your company, Company A, sells ice cream scoops. Everyone is excited about your product, and sales are through the roof. Then Company B comes along, and they sell ice cream scoops in different sizes. Company C creates a scoop with a better handle, and Company D offers a very similar product to yours, but for half the price. Now, you have competition, and they're all offering customers a better product, or a better price, than your original scooper. If all you sell are ice cream scoops, and if you don't change your product to match or surpass the competition, your sales numbers are going to fall.
This scenario describes a commodity trap, and it can happen to any business, big or small. A commodity is something that is interchangeable with another product. Nothing special sets it apart. If your product has become a commodity, you need to shake things up a bit to make it exciting again. There are a few different ways to do this. You could start by updating your product or services. What are your competitors offering? How can you make it better? Regularly improving on your product or services can keep your company ahead of the competitors. Take your original ice cream scoop, and add in few new features.
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Check back soon for Part II
