The Challenge Rambles and riff raff about all this and that

Why competitive direct sale web prices actually help Partners

The book of good partner care reads: thou shall not have competitive direct prices or thou'll cannibalize your partner.

How true is this? The shallow reading is that is as true as it gets. After all it sounds logical, if you compete directly with your partners, and beat their prices, people will buy directly instead of looking for them.

But we have learnt that things aren't always what they seem. And there's more than meets the eye. Enough for quotations.

Today we know web is first and foremost communication. Its a permanent and always available advert and information site about what you do, sell, provide and what-not. As part of that scheme of things people will go and visit sites (corporate sites, that is) looking for information. And the most important piece of data you can deliver to users is a price.

People think with their pockets. The first thing you look for when shopping is the (always hidden) price tag. If you consider the price is fare for what you are holding in your hands you'll probably go forward and buy it.

Now, what happens when the price is to high? you feel discouraged, go across the street and buy the equivalent from the competition.

The same stands true for web. Or even more so in web, where you have instant access to competition's sites, and don't even have to walk there.

On the other hand if a price seems fair one of two things might happen:
a. People buy that immediately.
b. People try to get an even better price.
(of course I've neglected mentioning c -> people who wont buy, them bastards!)

The worst thing you can do from a web marketing standpoint is to have high prices on display. It'll do nothing but hurt your business back and forth, from potential direct buyers to potential buyers who would of otherwise went to a partner to buy.

The digital camera anecdote.
I was asked to buy a digital camera for a relative of mine. So I went to various "official" web sites looking for specs and prices. Sony had some nice specs and not-so-bad prices. Panasonic had no prices at all, so I couldn't care less about them. After deciding on a model I searched sony's list of partners and bought from them a shiny new camera.

Having owned a panasonic before I was fond of the brand. But since I had little time to get the specs and prices I decided to ignore them.