As you said, “depends on what and where you’re selling” and I’d add it also depends on the general tone of your communications and relationship building methods with customers. We guarantee all our products and use a flat rate shipping model, so no games there.

We’re talking about a very low tech product here, it just is what it is, and there isn’t really any kind of “FUD lever” available. In this particular case, the product was indeed priced for liquidation so we felt pretty sure that was what was going on (we know the product / supplier very well).

Don’t you find it interesting that the relationship we have developed with customers is such that they would even take the time to engage in this kind of “I would really rather buy it from you” query?

That reason (on sale or a liquidation item) may be perfectly true, but it sounds like pure FUD. It may depend on what and where you’re selling, but any such response back to me like that would leave a *really* sour taste in my mouth.
It may simply be that the alternate retailer is a more efficient and streamlined operation and can hence shave their margins even thinner.

eg The company I deal with most who tends to be more $$ than others, focus on other aspects. Quality of the end product – they “stand behind it” vs selling any old functionally equivalent junk that has the lifespan of 2-3 months.
The other trick they play is that postage is included in their pricing. Some online stores charge around 2-3 times the shipping of others – make their margins there I guess. So you “save” on the item, but get more $$ on the total package.

So how would I choose to deal with this situation? (So as not to be negative entire :-) )
I’d do similar to your start: Great price. And then choose to focus on the Value Add that I offer to the customer. Some/Much/All of that value add may not be valuable to them. Which I’d regard as a useful learning experience in it’s own right.

Dissing the competition subtly or not just doesn’t come off well IMHO. Better to demonstrate the intangible (or tangible!) values you do add.

Thoughts?
Cheers!
- Steve