Why You Shouldnt Sell 'Cheap" or Your Business Will 'Bungkus' In 3 Years.

Saturday, 17 November 2018

One of the things I've realised with business owners in Malaysia is that they always want to sell cheaper than their competitor.

Ever since i started SoapLab; when i meet a business owner or so called 'entrepreneurs' their first thing is they want to find something 'cheap' to produce; so that they can sell cheap. If possible cheaper than their competitors.
Here's the thing why its a baaaaaad idea!


Cheap Product =Moderate/ Bad Product;

When you source for something that is cheap; its going to be a 'moderate' or a bad product. (No cheap product is good long term!) This will result in the efficacy of the product that will also be moderate or bad.

That will then make the customers feel 'terrible and cheated' and at the end; they will not come back and buy from you. You will only have a portion of people buying from you; and after sometime if you have a bad product; they will not buy from you anymore. Sooner or later; you would have nobody buying from you anymore and at the end you will have to close your business.

Dont believe me? See most Malaysian brands. Why almost no body sustains for more than 5 years? Its because of this! The things they are selling are 'sub-par' making it not 're-purchasable'.

On top of that; imagine if these people who used your product tells people around them (its not so hard with social media these days) that your product is terrible and not to buy from you; imagine the 'going to be' customer's that you would have lost!!


Not Profitable:

Imagine this scenario. You sell at a price that you are comfortable with. Good price and great profit margin. Then one fine day you do a 10% sale and probably you got more people buying. So you get more excited and add another 5% discount and you got more people buying from you. You are happily dancing to the bank because you thought that you have 'made it'.

Then one day; your competitors found out you are doing this and they do it too! So then your customers who were price sensitive (coz remember they came to you because of the 'cheap' price') will go to them instead of you.

Suddenly your sales goes down and you decide to add more discount to your product. You will probably have very little profit already but you still do it because you want to 'match' or be lower than your competitors.

You are barely surviving; so what do you do? You cut cost! You look for 'cheaper products' and you laid off your staffs because you cant afford it anymore.

Sooner or later ; you are doing all the work alone (something that probably 10 staff did before) and you have a 'moderate/ bad' product as above because you sourced for cheaper items to reduce cost. You are probably barely surviving but still going on.

Then one fine day; another competitor comes in and slashes price by probably 50% (way below your cost) because they are well funded and are willing to take lost for 6 months just to 'kill you' - (yes thats what happens in Malaysia.) So what do you think will happen to your business??? Bungkus la!

I know this and im talking through experience because this is exactly what happened to me when i opened my pharmacy years ago. Initially i opened a pharmacy that specialises in skin (the concept was you have a skin problem like eczema and psoriasis; you come to us; and we will customise your skincare so that you could be steroid free). Unfortunately because i was crappy in 'marketing' the business didn't 'fly' and people used to come to the pharmacy expecting me to have the normal cough and flu medicine.

I got afraid when people started telling others not to come to my pharmacy because ' we didnt have anything' and so to win the crowd; i started adding all these other medicine and become a 'normal' pharmacy. Then people started saying i'm 'expensive' (because obviously i was an independent pharmacy not a chain and didnt have much fund).

But just to win them; i lowered my price; and i was the only one (no staff) working in that pharmacy 9am-9pm; Monday to Sunday (gosh i was longing for the Sun!) On top of that the profits was seriously low! I made like probably RM 1- RM 5 maks per item (sold only 5-6 items a day coz i was new and no one knows i exist) and it could barely cover my rent. After 8 months i closed down. The rest is a history.

But my point is; when you compete because of 'price' its always a race to the bottom! Sooner or later; you will be out of business unless you have a 'deep' pocket rich parents (lucky you!).

For the rest of us; we have got to find a way to survive so don't get into this trap!

So What To Do?

Instead of that; why not create better value for your customers? Ask your self; besides 'price' whats the other reason people will purchase from you? I'm sure there is something!

Our Story

Like for SoapLab; we have many competitors that sells at much cheaper price.

When i first started i just couldn't compete with them and was always wondering why and how they could sell so cheap. Then it turns out that in chemical/ cosmetic industry; you can always 'dilute' your ingredients with cheap fillers to sell at cheaper price. I could have done that too but it just didn't feel right. I believe in karma and im so afraid that if i do anything wrong; my kids will suffer the consequences.

I really had difficulty to sell 'premium' ingredients at 'premium' price. But after sometime i discovered that there are people like me around too. Someone who believes in being ethical. Someone who only wants safe and effective things and not harm others; and someone who wants to leave this world a better place through only using sustainable and biodegradable things.

Everything in SoapLab is tested by us before sourcing it from our supplier. Every ingredient we purchase we made sure that it was 'helping to improve' the farmers life who grew them and not the middle man who is 'ripping' them off and make money.

Im so proud to run SoapLab and im so in love with all the clients we have. Almost everyone of our clients are like us. We somehow attracted the same staff too! Its like a big family.

In return; i decided to provide more value to my clients by educating them on the right things and right formulation so that their business can grow too via our website www.soaplabmalaysia.com, our youtube channel, and FB page.

Its a perfect symbiosis what we have and i just love it! Recently; our clients who have been with us for years have expended their business so well that they have asked us to make the product readymade for them so that they can focus on selling and now we have that too! Its just perfect.

So the moral of the story: (sorry for the ranting i just got so excited :-D)) Cheap is not the only way to sell your products. Figure it out and find out why would anyone purchase from you? Look within yourself and think like why would you 'buy' this product from you?  (Go to the beach if you need the me time) write it down and really 'niche' it down. There will be someone else like you around; and you just got to look for that person and replicate that success

Do it! And i wish you luck. Trust me guys; If i can do it: You can too:-). If you need any help; do leave a comment below; or if you want to reach our customer service to guide you on how to start a DIY business, click here

Good Luck!

Love; Nisha

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