Competition is a fact of life and business. But when you’re starting a new business—or strategizing for an existing one—competition can be intimidating, and it will affect every aspect of your planning, from pricing to promotion.

Operating in a highly competitive market, where your products might be a commodity, is naturally going to be different from selling in a less crowded space. And that’s what we’re tackling in today’s Ask Shopify.

Answer:

Finding customers is always going to be critical when you’re launching a business. There are numerous ways to do it, from social media marketing to SEO to selling at pop-ups, and which ones work best will ultimately depend on your products, your customers, and you.

What makes this question different, though, is how to approach the problem specifically when there’s a lot of competition for products like yours.

When your target customers have so many options, how do you convince them to choose you?

It’s easy to daydream that someday, you’ll have a moment of inspiration and dream up a product that is so unique it’ll have zero competition. However, even the most innovative new products will eventually face competition as others enter the market. There’s really no use holding out for that perfect, competition-free product. Instead, if you have a business idea you’re passionate about, there are ways to succeed even in a crowded market.

In fact, when we spoke to Gregory Macdonald, a Merchant Success Manager here at Shopify and founder of Bathorium, a luxury bath products business, he credited the competitive bath bomb market with helping him refine and launch a great product, which has grown into a successful line.

Research your competitors and their products

Bathorium started after one truly transformative bath in Italy. Gregory was staying at an AirBnB, and the assortment of bath products his host had stacked on shelves by her master bath caught his eye. She offered to draw him a bath, and the assortment of oils, salts, and other products she used came together to create an unparalleled experience.

He came back to North America excited to bring a similar bathing experience to the market here. But as someone who enjoyed a good bath himself, he knew the bath products market was a saturated one.

Instead of letting that discourage him, he dove right into competitive research.

“I went to the Bay, The Detox Market and Holt Renfrew and spent hundreds of dollars every kind of bath soak and bomb out there. All of it was just salt and oil and would just sit at the bottom of the tub undissolved. There was no wow factor and I had used everything; bath beads, powders, bombs, and nothing gave me an experience like I had in Italy."

That’s when Gregory knew that a product that could recreate his Italian experience would truly stand out in the North American market—even though they’d be up against a wide range of established direct competitors.

Build a competitive advantage

Using your competitor’s products helps you understand not only what they offer, but where there are gaps, and how your product can fill those gaps. Once you’re armed with that crucial information, you can leverage it to test and iterate your product until it truly fills a gap in the market, no matter how competitive that market is.

That’s exactly what Gregory did next to create a product that would stand out.

“I'm a huge bather, so I know what I like and don’t like. When we were testing products that became the test: When I use Bathorium products, where does it fall on the spectrum of things I like?”

The product creation process included a lot of trial and error, especially when it came to building their product formulas.

“Our first bath bomb was called the Aussie Bomb and it had Australian red clay in it, which is an amazing clay and it’s awesome for your skin. I didn't know the quantity to use, so I used half a cup in this trial recipe for four bath bombs.”

“When we tested our products, we had our formula sheets where we noted smell, look, cloudiness, all the factors. So this one was a beautiful deep red, it was great. We drained the tub and went back into the kitchen to make another batch. As we're making our next batch, we went to fill up the tub and test again, and it was streaky red, exactly how you’d imagine blood would look. It looked like a murder bath.”

Step one: Make sure your products don’t remind people of a horror movie (unless that’s the effect you’re going for).

While the testing process helped Gregory ensure there were no unintended side effects, and reduce the amount of red clay in the recipe, it also helped pinpoint a formula that delivered on the Italian bath experience he wanted to bring to market.

“Testing like that was a big advantage when we launched, because we had a product that we were really confident in and we were really proud to showcase.”

Even if you don’t have the flexibility to create a competitive edge with your products, like Gregory, you can still conduct a competitive analysis of the market to find gaps in messaging, retail distribution, or target audiences.

Get your product in customers’ hands

You’ve got a product, and you’re confident it fills a gap in the market. Now it’s time to get it in your customers’ hands. That’s one thing Gregory notes was crucial for them, because you can be confident that your product is better than anything out there, but when you’re a new business, you can’t just tell people that. You have to show them.

“When I knew I had a different product than what was out there, the challenge became how do I tell people that? How do I share that message with people who may be loyal to a brand or other bath products? We're competing against everything from Etsy to Pinterest to big box retailers to indie retailers.”

“For the first three years, and even still today, we gift heavily. We're constantly sponsoring events and giving out free product saying, “Try our product.” We have a really great return customer rate. When you use Bathorium, we’re confident you'll love it and likely come back.”

This strategy works once you’re truly confident that you’ve got a product that stands out in the marketplace, so the time you invest in competitive research and product testing is the cornerstone of this strategy. Once you’re there, you can focus on finding opportunities to hook new customers and win loyal fans for your brand by relying on the strength of the product.

Use competition to inform and inspire

When you’re taking your first steps into a competitive market, seeing all of the polished, established brands in your space can be intimidating. Gregory shared that you should never compare your step one to someone else’s step 100.

“I talk to entrepreneurs all the time, and they look at Bathorium's current packaging and they say ‘This is beautiful, this is what I want now. I can't start because I don't have $20,000 to get perfect packaging.’ But our first round of packaging was shrink wrap and a label that I printed out of a regular office printer. It wasn't cute.”

“You don't need to launch with this brand that's going to go right into retail stores. Get the word out there, establish your brand and deliver a great product—the rest will come. You just have to be confident in the product.”

If you’ve got a good understanding of the competition’s products and you’ve invested time into refining your product to fill a gap in the market, you’re ready to start selling. The rest will come.