We sold fewer units, yet the customer made more profit
We sold fewer units and the customer earned more.
In the mobile phone accessories category, prices fell by 40% over six months. The client wanted to follow the market down. We worked out what that would mean and suggested an alternative.
The challenge
Over the course of two quarters, retailers offering visually similar products at a price 40% lower entered the category. Some retailers selling a similar range lowered their prices and maintained sales volumes whilst operating on a margin close to zero.
Our client wanted to do the same, as they had noticed their market share falling. The problem was that, given their cost structure – production in Poland, quality control and a two-year warranty – matching the competition’s prices would have meant selling below the cost of production.
About the client
A manufacturer of mobile phone accessories; domestically produced; mid-range segment; own brand with recognition within the category.
Allegro accounted for the majority of retail sales.
What we’ve done
The decisions that determined the outcome.
We worked out how much it would cost to follow the market
The initial discussion centred on the table, not the strategy. By lowering prices to the competitors’ level whilst maintaining volume, the client would earn 62% less per year than in the previous year, with the same number of parcels dispatched and the same warehouse workload.
The convincing argument was this: with an average price of 45 zł and a margin of 14%, the profit per unit was 6.30 zł, whilst the cost was 38.70 zł. A fall of 40% meant a price of 27 zł, that is to say A loss of 11.70 zł on every item sold. No less profit, no less loss.
We have stopped selling individual items
Rather than competing on the price of an individual product, we have restructured our range to consist of bundles: a case, a screen protector and a cable, all tailored to a specific phone model. The bundle has no direct equivalent amongst our competitors, so price comparisons are no longer automatic.
The average basket value has increased by 61%, and shoppers who have selected a bundle are less likely to return to the results page and less likely to compare products.
The list price of none of the items has fallen. The set is cheaper than the sum of its parts, so the average price per item has fallen from 45 zł to 42.50 zł; this is a bundle discount, not a price list reduction.
We have moved our communications
A two-year warranty, same-day dispatch from a Polish warehouse, and customer service in Polish. Each of these features already existed, but none were visible in the product listing; they were tucked away in the „seller information" tab, which nobody ever opens.
Including them in the photos, the title and the first screen of the description cost nothing apart from the work involved in creating the content.
Course
Key stages.
- January 2026 Calculation of the reduction scenario Calculation of the annual result as prices fall to the competitive level. Decision not to reduce prices.
- February, March 2026 The most difficult period A fall in market share and trading volume, whilst prices remained unchanged. Staying the course despite internal pressure.
- March, April 2026 Restructuring the product range into sets Packages tailored to specific mobile phone models, new product sheets, and a new pricing structure for packages.
- May 2026 Warranty and dispatch information Include information about the warranty and delivery times in the photos, in the titles and on the first screen of the description.
- June, September 2026 Stabilisation Volume was lower than the previous year, whilst the margin and profit were significantly higher. The decision was taken to maintain the strategy.
Results
Volume and gross profit, monthly.
The divergence between the two ranges began in April, when the sets were added to the range. Sales volumes never returned to their initial level, nor was that the aim.
Nine months without a price reduction.
| Credits | January 2026 | September 2026 | Change |
|---|---|---|---|
| Unit margin | 14% | 23% | +9 percentage points. |
| Average basket value | 68 zł | 110 zł | +61% |
| Units sold per month | approx. 9,200 | approx. 7,500 | −18% |
| Number of parcels processed | approx. 6,100 | approx. 2,900 | −52% |
| Items per pack | 1,5 | 2,6 | +73% |
| Monthly turnover | approx. 415,000 PLN | approx. 319,000 PLN | −23% |
| Monthly gross profit | approx. 58,000 PLN | approx. 73,000 zł | +26% |
| Changes to list prices | , | 0 | , |
How we did it.
The debate over price cuts was settled by figures showing that following the market down would not result in a lower profit, but rather a loss of 11.70 zł per item. Then, for eight weeks, the figures were worse, and that was the most difficult phase of the project. The bundles removed the product from direct price comparison and raised the average basket value from 68 to 110 zł, whilst the number of parcels halved. Turnover fell by 23%, profit rose by 26%, and that was exactly as it was meant to be.
Repeatability
Why do we think it wasn’t a coincidence?.
A scenario for a rate cut has been factored in by the end of the year
Pricing decisions are made on the annual results sheet, not on the share chart for the last month. The same table applies to every category under pressure.
A set rather than a single item
A product with no direct equivalent is excluded from the automatic price comparison. This is the cheapest way to exit an auction available on the marketplace.
The strengths you already have, but which aren’t obvious
Warranties, delivery times and customer service in Polish are usually there, tucked away in a tab that nobody ever opens. It costs nothing to include them in the photos and the title.
What this case does not prove: This strategy requires a tangible advantage that can be demonstrated. With a product that lacks any distinguishing features in terms of quality, warranty or logistics, there is nothing to communicate, and attempts to defend margins will result in a loss of both volume and profit.
The competition has slashed its prices, and you’re wondering whether to follow suit?
We’ll work out what your annual result would look like in both scenarios and identify the advantages you already have today that the buyer doesn’t see. Without assuming from the outset that a price reduction is a mistake.
Let’s work out both scenarios
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