The decision tree
- 1
Is the drop sustained past 24 hours?
If no, do nothing. If yes, continue.
- 2
Is the new price above their break-even?
Estimate their landed cost. If they're at break-even, they can't last more than 2 weeks. If they have margin to spare, you have a real fight.
- 3
Are they targeting all your SKUs or one?
One SKU = a tactic. All SKUs = an attack on your store. Different responses.
- 4
Can you survive 30 days of compressed margin?
If yes, match. If no, exit the SKU temporarily and pivot.
Match and fight
- — Single SKU attack
- — Competitor near break-even
- — You have cost advantage
- — Cash to absorb losses
Exit and pivot
- + Multi-SKU coordinated attack
- + Competitor has cost advantage
- + Margin already <15%
- + Bundle/private label option ready
What to do during the war
- Freeze the affected SKU prices (don't keep dropping)
- Raise prices on untouched SKUs by 3–5%
- Bundle the targeted SKUs as 2-pack/4-pack listings
- Document the competitor's pattern for future reference
