When a competitor undercuts your price, you don't have to match it exactly. A baker losing sales can bundle two loaves together or run buy-one-get-one-half-price to boost volume and protect profit margins. The key is knowing your exact cost per unit so you can pivot quickly.
Chapters
Hey, my friend. I know you are doing so well. Hey, I'm just having fun with this. The you know the way to pivot, the ten way to pivot, the ten way to to move from where you're trying to get stuck to where you must be or where you have to be. Listen, you know any product or any service you have and you try any problem, any product and service that you develop to solve a problem out there. You know when you start that service or product to really, really solve a problem, you have, you know, something in mind. You know, you have this study that you say, well, it's going to cost me maybe $20 to develop this product, and this product, I'm going to sell this product for $20 or $25 or $30, right? You spend $10 to do this, maybe, you know, to— you spend $10 to develop whatever product it is, and then you have to sell it for like $40, right? And then you can make profit. Let's say you make 50% or 100% off, whatever profit you make out of it. So that's how every business starts. So you have your cost of acquisition or cost to develop that product, and you have to put the profit margin on it, and you have to push that in the market and, you know, sell it for that price in order to make profit. That's why you could be in business. So, if you don't practice that, you have, you know, your cost of acquisition or cost for— cost of production and all that, and you know exactly your margin per unit. If you don't know that, you can soften your business. So, now, when the market start, you start get challenged with the market, maybe customers are trying to grow out of that, or maybe there's don't see that much value in it. Or just a giant competitor come and sit right next door to you. Now they are selling more than you. Everybody buying from them. How do you fight that person? How do you adjust that? So that's what we will talk about today on point number 6. So you have to revisit the business architecture, which is what I will call the production, the core cost of your production, the margin that you have for each product. So let me illustrate it again. Let's say you have— you are a baker. You make a bread. This is a bread, right? And you sell it for $5. And then you are selling— you sell it for $5 and your cost And your cost is $2, right? What I mean your cost is everything to get the finished up bread and deliver to the customer is $2. So your profit is $3. You make what, $3, right? You make about $3 per unit. And then you are selling, let's say, 10,000. 10,000 per month. So, you are selling 10,000 per month, and suddenly another guy came in, you know, just sitting here, and he's making bread, the same bread, and then he's selling for maybe the same price. Maybe the same price, or let's say maybe even— let's say the same price, right? Because I want you to understand where I'm coming from. I don't know what is his cost, um, but suddenly this guy stole 4,000 of your customers. Now you're not— you can't do 10,000 anymore. Literally, the market was small, right? So it drops you down to about, what, $6,000? Let's say just— let's just say $6,000. So you move from $10,000 to $6,000. You'll be like, where's my customer? This guy— I mean, what's going on with this? So in order to fight this and get out of this, you can apply everything we talked about early. If it doesn't work, you have to reduce your margin. So, instead of making $5, guess what? You start selling 2 breads, you start selling 2 breads maybe for $9. You make people buy 2, and then you let $0.50 go. So, you reduce your margin. You reduce your margin. So you redesign that, you adjust your price and increase the volume so it doesn't look like, it doesn't look like, uh, you are losing the market. That can snag maybe 3,000 of this guy back to you because now they have a reason to back to, to buy from you. Or you can even go crazy, you do $7. If you buy 2. Remember, out of 10, your cost— your cost now, your cost is $4. So $4. So you, you have $6 in it. And when you sell 1, you was making $3, right? But I mean, put a price at $7, you still make your $3 and you get all your customer back because now this guy can't compete with you because of the way you drop the price. And every sale would double, and then it's going to give you the market of $10,000 back. And you even do that quicker. I'm sure this will increase the market. Now you make people, instead of buy one brand, they buy 2, and you make the same profit because you're not losing money, right? Your cost become $4. And you, you still make your $3 profit. At least you can maintain your market with that, and people will love you. They'll be like, man, this guy really, really— but you make them buy 2 bread and not 1, so it still look like it's a deal. So when somebody buy 1 bread, you give him the second bread for half price. And I'm sure you probably went to the store and they say buy 1, get 1 half price. This is exactly what they are doing. Buy one, get one half. Buy one, get one free. This is, is this technique. Lower the cost, lower the cost and sell more and still maintain the product and fight the competitor that way. So this is a powerful way to pivot it. If you practice this, trust me, you'll do so well. Now, how can you apply this in your business? That can be just something that You sell things on the street and you start say, hey, you buy 2, I give you 1 free. You buy 10, you get 2 free. And then all those other people that are around you, they will stop selling. And you can tell them, go to the School of 365 and learn how to sell. This is a powerful way to pivot. This is powerful way to fight the competitor. This is a powerful way to control the market and regain trust from your customer because now you are giving them something. You are giving them something. You are even giving them reason why you give it to them. You make them buy more. So powerful way. Go ahead and share with me how you apply into your business. And tomorrow we go to point number 7. And man, at the end of this, you must be the best salesperson. You must be the best— I mean, the person who understands how to control a network marketing market. And not only that, when somebody play this on you, you understand how to rebuttal. So when your competitor come and start do buy one get buy 2 free, you go and do the same thing very quick. If it's not, you lose all your client. This help you to prevent, but it help you also to counterattack. Anticipate that. You don't go to sleep and wake up and be like, where are all the customer? All the customer gone. They're back where they belong. This is how you control the market. See you tomorrow. Thank you.
