Here’s the hard truth about capitalism: eventually, your product becomes boring. You started as a category creator. Now you’re one of twelve open tabs in someone’s browser, sitting between their inbox and a YouTube rabbit hole. And unless you’re building a rocket or a religion, you’re probably in a commoditized market-whether you admit it or not.
Commoditization is the business equivalent of entropy: left alone, every differentiated product eventually decays into a “good enough” option. And the default move in a commoditized space? Cut prices. Fight dirty. Claim you’re cheaper, faster, better.
The good news? You don’t have to win a price war to win the market.
You just need to stop acting like cheapness is a strategy.
“There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper.”
– John Ruskin
(Also known as the original warning label for Amazon Basics.)
What Commoditization Really Means
It’s not just about pricing. It’s about perception. When customers believe the value between options is roughly the same, price becomes the default differentiator. Not because they’re cheap-but because you’ve given them no reason to think otherwise.
And that’s on you.
If you don’t educate the market on how to measure quality, they’ll measure cost. This is why founders who lean on price end up playing a dangerous game they didn’t intend to start-and definitely can’t finish.
Pricing alone doesn’t scale. Differentiation does.
Table: Race to the Bottom vs. Rise to Differentiation
| Move | Race to the Bottom | Rise to Differentiation |
| Pricing strategy | Discount and desperation | Tiered, value-based, and transparent |
| Brand messaging | “We’re cheaper than X” | “Here’s why we’re worth more” |
| Customer support | Ticket system abyss | Fast, thoughtful, product-aware |
| Feature set | Copy-paste from competitor | Solve a niche, painful problem deeply |
| Marketing voice | Generic and defensive | Confident, clear, and specific |
How to Escape the Commodity Trap
1. Lean into the niche.
Generalist positioning is a death sentence in saturated markets. Niche players get remembered. A well-defined niche makes your product feel expensive-even when it’s not. It implies mastery, not mediocrity. People don’t want “kind of good at everything.” They want “exactly what I need.”
2. Package your outcomes.
Customers don’t actually want your product. They want what it does for them. They’re buying the result, not the feature list. Don’t sell CRM software-sell peace of mind that deals aren’t slipping through the cracks. Don’t sell bookkeeping-sell sleeping better during tax season.
3. Create comparison friction.
Make it harder to stack your product side-by-side with the cheaper guy. Bundles, custom onboarding, integrated services, or a killer post-purchase experience can break the direct line of comparison. When value is layered, price becomes harder to isolate-and easier to justify.
4. Build a brand, not a spec sheet.
Commodities don’t have stories. Brands do. A strong brand shifts the customer’s mindset from “how much?” to “how do I get in?” Story, identity, trust-these are irrational moats in an overly rational market. Use them.
5. Say no. Loudly.
Refuse to compete on terms that drain your margins, your sanity, or your soul. Stand for something. Because if you don’t define the terms of value, your customers will-and they’ll almost always pick “cheaper.”
FAQ
Q: What if my market really only cares about price?
A: Then you’ve either trained them to care only about price-or you’re targeting the wrong segment entirely. Either way, it’s time to change the conversation or change your customer base.
Q: How do I justify a higher price when competitors undercut me?
A: Easy. Show your work. Demonstrate how the cheaper alternative costs more over time-through inferior support, hidden complexity, or lack of durability. Buyers don’t mind paying more when they know they’re getting more. But they do need to be shown. Make it unmistakable.
Q: But I can’t afford to lose customers.
A: Then you definitely can’t afford to commoditize yourself. Volume won’t save you if your margins are dying by a thousand discounts.
A Joke (That’s Too Real)
Founder: “We’re cheaper, faster, and better!”
Customer: “Great. We’ll use you to negotiate a better rate with the vendor we actually like.”
An Open Question
If your product disappeared today, what would your best customers actually miss?
Would they grieve the price? Or something deeper-like the way you made them feel supported, smart, confident?
If the answer is, “Well, we were affordable,” then you were never really in business. You were just on sale.
Final Word: Win With Clarity, Not Cost
The companies that survive commoditization aren’t the cheapest. They’re the clearest. They remove doubt. They help customers feel good about spending more-not ashamed about spending less. They anchor value so well that even the most frugal buyer hesitates to switch.
You don’t need to be the only option.
Just the only one that feels like a decision-not a default.
