A product’s reselling profit is generally fixed in the event of competition. Pursuing maximum profit without a bottom line will ruin your business; this is not the way an honest business should operate. Being greedy is just as bad as cheating, as your customers will not believe you if you have sold them bad products once.
Lower-priced products don’t guarantee the same quality as higher-priced products. Generally, when the price is reduced, the product material is replaced with lower-quality alternatives to ensure the seller's profit. In the meantime, lower-priced products can leave a larger profit margin for sellers when they reduce quality to a standard without a bottom line.
You can find many lower-priced products on the B2B e-commerce website. They simply take advantage of buyers' greed to push prices very low; the truth is that these low-priced products are subpar, often malfunctioning within a few months or having a very short lifespan of just one year. The repetitive replacement of the product results in higher costs. For example, if one product you purchased for USD 0.5 lasts for half a year, you will need two in total to last a whole year. But what if the same product costs USD 1 and lasts many years? What is your choice? This is the phenomenon in which many buyers are willing to pay a very low price for products costing USD 0.5, even though the product actually costs USD 1 and will last many years, making it a better value. This is also why big brands are not using B2B: once they do, they will need to combat a price war, either by sacrificing quality to lower prices or by actually incurring a deficit, which is not a long-term plan.
If big companies are not using B2B e-commerce websites, are they actually making higher profits? Actually no. Take Leeka Corp as an example: they have a rule that sets the maximum product profit at 20% of the cost, including tax. The corporation has well considered its market; if its profit is high, that means its buyers’ profit is low, or it is actually selling at a high price. Therefore, when their buyers purchase fewer products, the factory produces fewer products, resulting in lower annual revenue. So, it’s not a thing, as you think big companies have higher profits.
How do higher-priced products compete with lower-priced products? The answer is time. In a short period, buyers may opt for lower-priced products. Still, once they discover that the product is subpar, wastes their time, and causes significant trouble, they should consider better-quality alternatives. Additionally, many buyers will choose higher-priced products first; they're smart and will not take a roundabout route to choose the lower-priced product first. So when they actually prefer the higher-priced products, they find value in them. The higher-priced products are actually worth it. Take the example mentioned earlier: the product costs half the price, but it is actually far more expensive, as it has a shorter life span than the higher-priced products. Therefore, this type of customer will continue to buy higher-priced products. In the long run, you will find that lower-priced product sellers are continuously losing customers and finding new ones, while the higher-priced product seller is constantly gaining new customers and old customers continue to buy from them. The advantage is that the old customers have larger businesses, while the new customers have smaller enterprises. You will see in the long term why sellers of the higher-priced product are winning. That's why many big brands are not low-price sellers.
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