This is a common issue, especially for new business owners. There are a couple reasons why your competitors' prices may be much lower than what you have calculated that you need to charge.
First, many business owners don't pay enough attention to their pricing strategy. It's possible that your competitors are not covering their costs; if this is the case, they won't be your competitors for long.
Another consideration is that no two business owners will have the same costs of production even if they are producing exactly the same product. Both fixed and variable costs vary from business to business. The business with the most advantageous situation will be able to offer the lower price.
What strategies can you apply if you find yourself competing with lower prices? First, review your costs and make sure that you haven't miscalculated anything. Then examine your costs to see if there is any way to reduce your expenses. Review your marketing plan and make sure that you are taking advantage of any market niches that exist. Focus the attention of your potential customers on the unique aspects of your product; seek to differentiate yourself from the competition. Focus on quality, customer service, reliability, and any other attributes that will help the customer understand why your prices are higher.
Never apologize for your price, and don't cut your prices without giving careful thought to what the consequences will be for your overall profitability.
