Looking for suggestions

I run a small business that sells unique designs we make in house. Our competition on the other hand sells copyrighted designs from major movie productions and they are making way more then we are because of that. The designs they carry are of course copyright infringed. They already got in trouble once for it so they are sneakily having a paid membership area for those types of designs and people are eating it up.

How can I beat the competition that sells copyrighted designs? Is there any way to really compete with designs that are Frozen or Mickey Mouse related?

Wait for them to go broke from lawsuits I'm guessing.

Build a better looking sales site, with cheaper prices and then rank it higher.

Well, you have quite a few options here!

Option 1: Report Them
Copyright Infringement is illegal, and because it is illegal, you are presented with the opportunity to report them to the companies that they are stealing from. Now, you may be wondering how to do this. Well, it's quite simple, actually. Just purchase their membership, or have someone you know do it, and let them create their illicit design. Once they give you the design, you can clandestinely email the companies the design and tell them where you received it from. You competitor will get slapped with another lawsuit by a litigious company and while they are distracted with that, you can take pilfer their clients.

Option 2: Ignore them
Feeling indolent and passive? ThopHayt already suggested that they will most likely get caught again, so you can remain neutral until they are caught for copyright infringement.

Option 3: Compete With Them
This is the more fun and challenging option. Instead of directly damaging their reputation or ignoring them, you can be more aggressive in your marketing tactics. Showcase your best work on a modern website, submit your work into competitions, set up newspaper ads, improve on your existing designs, do whatever it takes to prove that you are the superior artist. Sure, it'll take longer, but unless you want to actively harm your competitor and come off as a jealous competitor yourself, I recommend option 3.

Zwielicht said:

Well, you have quite a few options here!

Option 1: Report Them
Copyright Infringement is illegal, and because it is illegal, you are presented with the opportunity to report them to the companies that they are stealing from. Now, you may be wondering how to do this. Well, it's quite simple, actually. Just purchase their membership, or have someone you know do it, and let them create their illicit design. Once they give you the design, you can clandestinely email the companies the design and tell them where you received it from. You competitor will get slapped with another lawsuit by a litigious company and while they are distracted with that, you can take pilfer their clients.

Option 2: Ignore them
Feeling indolent and passive? ThopHayt already suggested that they will most likely get caught again, so you can remain neutral until they are caught for copyright infringement.

Option 3: Compete With Them
This is the more fun and challenging option. Instead of directly damaging their reputation or ignoring them, you can be more aggressive in your marketing tactics. Showcase your best work on a modern website, submit your work into competitions, set up newspaper ads, improve on your existing designs, do whatever it takes to prove that you are the superior artist. Sure, it'll take longer, but unless you want to actively harm your competitor and come off as a jealous competitor yourself, I recommend option 3.

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Totally agree. Just do some marketing research and build your own strategy

Threats of legal action are no fun, I wouldn't advise going toe to toe with the same tactics as them as it really sucks when a copyright holder comes after you.

There is nothing stopping you from providing similar quality without the copyright infringement though so I would say go that route. From looking at a lot of designs that use famous people/films and things like this all have a certain look to them which just doesn't look professional.

Bespoke designs very often look much higher quality.

Just hold tight, they will get what they have coming to them soon enough and it won't be pretty. They'll be on here posting about what they should do and lawyering up will be their only option. Keep building your brand and you'll win in the long run.