Knowing and comprehending what your potential customers see in your competition is the most significant competitive analysis that you can do. You must try to think like your prospective customer. Keep in mind that your customers are sophisticated shoppers and that they are being bombarded everyday with promises of quality, swiftness, and satisfaction.
Occasionally, you can focus so much on the strengths of your own drop ship company that you can forget about the strengths and weaknesses of your competition. However, you can be assured that your customers will not. They will see the marketing materials put forth by your competition, read their customer service policies, and make what they consider to be informed decisions about the quality of your competitor's products. In essence, they will conduct their own analysis of your competition.
So what can you actively do about this?
You can do the same.Analyze your competitions' marketing strategies and advertisements. Do they focus on providing good customer service, strong guarantees, lower prices, or better quality products? What does it look as though they consider to be their strengths?
You should also consider their accessibility when it comes to their customers. Do they provide access to live agents? Toll-free telephone numbers? E-mail contact? Customers expect to be able to communicate effectively with online businesses and knowing how your competition handles this can give you ideas on what you might need to improve on in your own drop ship business.
It's important to remember that you are not analyzing your competition in order to copy them. Copying them won't make you stand out at all. In addition, you don’t want to simply look at their prices and then knock a few dollars off of your own in an attempt to compete with them. For one thing, you will have no idea whether or not their pricing system is working for them or what they consider to be their internal shortfalls.
Instead, you should focus your analysis on the different ways that you stand out from your competition and what makes you unique from them. Then, focusing on these differences can not only help you in understanding your own drop shipping business better, but can also help you in your advertising endeavors.
What makes you stand out from your competitors? What are your strengths and weaknesses in comparison to theirs? What might your potential customers be seeing and thinking about both of your businesses?
You will never be able to take advantage of your strengths, or even counteract your weaknesses, without knowing these answers. However, you can be assured that your customers will be carrying out their own competitive analysis.
