Sunday, 3 January 2010

Know Your Competition



Many artists and artisans sell on social selling sites such as Folksy and Etsy. These sites are great way to showcase your work but it is also quite difficult to get noticed amongst the plethora of other on-line shops. But you can use your competition to your advantage by doing some research on them and using this information to help you to devise your on-line strategy.
Firstly, do you know who your competition is? If you create a totally unique craft (such as My Furoshiki for example) it may not be obvious at first. If you are selling a popular item then you will find this type of research easier. I’m going to take myself as an example.
My direct competition comes in 4 categories:
1. Hand made fused glass, stained glass, blown glass and lampwork beads
2. Faux glass such as glass tile pendants and imported fake “murano” and foiled glass from China
3. Jewellery, including resin jewellery
4. Gifts ranging in price from £5 - £20.
Hand made glass is easy to identify as competition – we come in the same categories on Folksy and Etsy – and this also applies to jewellery. The competition I don’t like is the nasty mass produced foiled glass from China (BTW – if you buy it – the glass hasn’t been annealed in the kiln and can fracture at any time). It’s cheap, it’s nasty, it’s not durable and some people can be duped into thinking it’s hand made. Grrr! (Don’t get me started).
The most difficult to identify is the competition from similar priced items.

There’s that expression – “keep your friends close and your enemies closer” but your competitors aren’t necessarily your enemies, they can be really useful friends instead. I belong to a glass team on Etsy, the CGGE, and it has been one of the most useful things I have done there. We exchange ideas, learn from each other and promote each other too (treasuries, Etsy-minis, challenges and competitions).
So what information do you need to know from your competitors? Here’s a little exercise.
Select 3 shops that sell the same/similar products to you and look at:
Their pricing
Their descriptions
How many sales they make
How they market their craft
Which other sites they sell on
Their strengths
Their weaknesses
What makes them better than you.
You should be able to use this information to help you to identify any weaknesses in your business. You should NOT use this information to mimic your competitor or infringe their copyright or poach their customers.
What are you going to do with all this information?
Looking at your competitors can really focus your mind on what your shop is all about. It can help you to see how you can improve your product/presentation/shop by comparison.
Pricing – does your competitor sell their stuff for more than you/less than you/the same as you? Undercutting your competitor may be a bad move because you could be underselling yourself, cutting your profit margin or devaluing your work.
Now is the time to go back and think about the kind of customer you want to attract. Think about whether you are trying to attract the hand made buyer or the bargain hunter. (When I realised that I couldn’t compete with a lot of Etsy glass sellers on price I increased my prices by 10% and my sales increased).

Descriptions – how effective are their descriptions? Are they interesting to read, light hearted, straight to the point or basic? Re-assess your own descriptions but remember, original thought will attract more sales than copying – copying will attract bad feeling.

Sales – how many sales a month is each competitor making? Compare these with your own. You can match the number of sales to the quality of their craft/price of their craft and this will help you to anticipate the number of sales you should be striving to make. Working out basic averages can be useful here.

Marketing – how much marketing does your competition carry out on on-line? Where else do they market? How often does their name pop up on a Google search? Are they hanging out in the forums? What devices do they foster for customer loyalty? (Sales, BOGOFs, special offers, freebies).

Strengths and Weaknesses – your competitor may be strong in one area and weak in another. It may be that their product isn’t very good but their prices are competitive. They may create lovely crafts but not know how to promote themselves.
What makes them better than you? Find it out and fix it!

If you can’t beat ‘em… Competition is great – it keeps us on our toes and helps us to evaluate what we are doing. It also helps us to move away from a saturated market or spot a gap in the market too. By getting together with your competition you can support each other, promote, share ideas and compare. Creating a team on Folksy Teams or Indiepublic is a great way to start.
But if you want to beat the competition too take time to do thorough research, identify the information that’s relevant and apply it to your business. I hope you noticed that I didn’t once ask you to analyse their actual product. You don’t need to copy your competitors’ items to be a successful seller.

9 comments:

  1. Thank you for taking the time and putting the thought into creating this post. It's a great way to get the year started and re-focus on ways of getting 'out there' and selling.

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  2. Thankyou very much for this information, it is much appreciated. :)

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  3. This is a really helpful article, thanks for compiling.

    New Year is a great time to evaluate what's working and what isn't and to make changes.

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  4. That was not only really informative but exceptionally well researched. Having worked in a variety of jobs - including marketing, it's been very enjoyable getting such a timely reminder. Thank you and a very Happy New Year to you!
    Ange (SignedbyAnge)

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  5. Thanks for the excellent information and for taking the time to share.

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  6. This post has been very helpful! I've checked out my competition but didn't really know what to do with the info I had. Thank you for giving me a starting point!

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  7. I need all the advise and expertise I can get to increase my sales. I am going to follow you closely and follow your advise. Thank you very much for your blog and all the work you are doing,and sharing it with us all.

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  8. THank you for all your kind comments. There will be more posts on marketing coming soon.

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