Advice for my business

Hi everyone,

I am running a succesful online business for over 1.5 years now and ranking top1 for the main keywords on google, yahoo and bing. When I was just starting, it was extremly easy to rank my website because there was almost no competition so I set my prices very high and was getting mass customers because no other websites were offering the same products I was. Now after the time goes by, more and more websites are created offering the same product, their prices 120%+ lower than mine.
However, my website is very user friendly and have members area and many other features to make things easier for the customers, which no other website offering now.

The product is same as on every other website and the result would be the same if customer ordered from my site or from other one with much lower price.

The point is, other sites employ 3rd world country residents who will work for pennies, while I employ people from US/EU.

When a customer asks me, why our prices are so high compared to other sites. I answer, you can buy a toyota which will get you from point a to b or you can buy a lambo which will give you the same result, but you will ride with a comfort.

I am still getting decent amount of orders from my website and I believe people are buying because they see the price is higher, so the website might be better than the others.

Now, my questions is: Should I lower my prices to make them a little bit higher from other sites but not to match them completely. Currently my prices are higher from 80% to 150% of other sites.
I wonder if I would get more orders, but at the same time my employees might stop working for lower price.

Thanks,

You will need to lower your prices a little. I have been in the exact same situation for some years back. I was in a niche where I could set the prices as I like but today it is over swamped by other companies that are prostituting themself to the market and have such low fees that they need to operate with hidden fees. The only choice you have is to supply with any add on service that the competition don't have or to lower your price a little and differ your product from the competition.

To start competing with the lowest price of your competitors will just ruine your business on long term unless you have very deep pockets.

It's about the perception of value.

There are plenty of people that sell a product for more money than someone else. They get away with it because they think the extra money is buying them more value. Put it this way, Apple sell an iPhone for over £500 while Alcatel sell a similar phone for £150. Apple continue to sell their product because they've marketed it in a way that basically says "you buy from Apple you're buying a quality, stylish, device". Alcatel promote their product as basically doing everything an iPhone does but for far less money.

If your site isn't giving the impression that you're a quality business, selling quality goods with quality service, you will get people wondering why you're charging more.

Well well, it's not always that way it works!

this is all math. you lower price, and you need to sell 10 products instead of 8(i.e.). Lowering the price, you need to be sure that more people gonna come.