How to keep product margin high?

People with a differentiation strategy are usually the one who generate the more profitable businesses. What is your idea, how is your new project going?

How to keep margin high? You market is facing discounters who sell at manufacturing cost some products which should be sold at retailer cost. This phenomena is particularly observed on OEM products which are referenced by hundred of sellers on market place.

If you take one of those products, let's say as smartwatches, you will find hundred of sellers having similar product sold 6-7 times less, yes, their products performance quit similar with yours. The observed phenomenon is that the cheaper vendors usually get the better rates, which increase his possibility to sell more by attracting new customer.

Keeping margin high when you are facing dozen or hundred of competitors is not easy especially when those competitors are Asian based manufacturers, because they are at the manufacturing level, they are still making profit anyway.

How to go against this and keep margin high? One answer is: originality, differentiation and innovation. If you have an innovative product, which the competition doesn't have yet (hence you are almost alone on the market with this product) then you are facing less price pressure and you can almost decide the price to the market, you can get good profit.

Innovative products contrary to OEM products usually require a higher upfront investment in Product Development at the first stage. However, if you consider the higher margin you can generate afterward when selling the products on the market not facing price pressure, this investment cost is usually quickly covered and the return on investment is always high. This is especially suit for electronics industry, need some electronics prototyping from Shenzhen China? You have found the right place.