How do I compete with businesses that can offer similar products at a lower cost?

I have $1000 in my bank and planning to put up a business selling baked goodies. However, my neighbor is doing the same. Can you give a bit of advice on how I can sell my products better? I’m good at making cupcakes and cakes.

Don’t waste your energy comparing yourself to others. :slight_smile:

There will always be someone offering something similar at a lower cost, but that doesn’t mean you should lower your own prices. Focus on making the best products possible, invest time in your marketing strategies (word of mouth, Facebook, etc.) and keep moving forward. Don’t let your supposed competition be what holds you back.

Thank you for your advice @amber ! It melts my :heart:! :sneezing_face: You’re right, I should focus on making the best products! Can you also share some tips on how I can market my products well using the avenues you mentioned?

Since it’s a local business, I would start by using NextDoor, asking friends/neighbors to share photos of your creations, asking for a 5 people to volunteer as “taste testers” for a discounted rate. Whatever you can to get the word-of-mouth up and going, then move to running Facebook ads targeting those in your area.

You can try increasing the perceived value of your product.

‘Perceived value’ is basically the value of your product in your prospective customer’s eyes. If you can convince your customer that your product is 100% worth the higher price tag, you won’t have any issues selling, even over lower priced competitors.

Let’s take Amy Porterfield for example. Her mastermind and courses and definitely more expensive than random courses on Udemy. However, even first-time buyers are willing to purchase from her because the perceived value of her courses are so huge.

Of course, Amy has also made a name for herself in the industry, but the concept applies. How can you convince your customers that your baked goods are worth a higher price? Are they made with locally sourced ingredients? Are they packaged beautifully? Do they not have any preservatives? Think about the angle you can market them in, market to a niche group, and raise perceived cost!

Great advice! Thank you @amber and @ananya for your time to share your ideas! I’ll try that. :slightly_smiling_face: