Balogun Market vs. Online Vendors: The Price Wars

There is a brewing debate that keeps surfacing between online vendors and their customers

There is a brewing debate that keeps surfacing between online vendors and their customers, especially in comparison with traditional market traders like those at Balogun or Eko Market. The conflict? Pricing.

Imagine this: A product costs N100 at Balogun Market, but an online vendor sells it for N200. Why? Simple—logistics, packaging, and other overheads, plus the vendor’s profit margin. But buyers, knowing the Balogun price, argue that N200 is too high. This clash between buyer expectations and vendor costs is an ongoing dilemma in the business landscape. So, how do you navigate this pricing conflict?

Know Your Competitor: The Local Market

As a small business, whether you like it or not, your competition is not just other online vendors—it is also the traditional open markets. Places like Balogun Market are your direct competitors, especially if you are targeting the middle-class or lower-income market. Ignoring the existence of these markets is a rookie mistake that could sink your business. Sure, motivational speakers love to say things like, “If they cannot pay you, they are not your customers,” but let us be honest—unless you are in the luxury market, that advice does not apply to you.

The fact is, Balogun Market will always have a foothold in the economy, and they will always be able to offer products at lower prices. Their overhead is different from yours. No fancy packaging, no extensive delivery networks. They are selling straight to the customer with minimal middlemen. This means their prices are always going to be hard to compete with if you do not have a clear pricing strategy in place.

Understand Your Market: Price Sensitivity

Many of your customers are price-sensitive, and that is not a bad thing—it is just reality. They are willing to endure a bit of inconvenience, like heading down to Balogun Market or Eko Market, to save money. And why not? A N100 difference might not seem like a lot, but for customers who buy in bulk or who live on tight budgets, it adds up. You have to speak their language, meet them where they are, and show them why your product is worth the extra cost. This is part of branding, and it is where many small businesses fail.

One effective way to stand out is to communicate your value. Do not just sell a product; sell the convenience of delivery, the quality of your packaging, or the time saved by ordering online instead of going to the market. The point is not to ignore your price-sensitive audience but to address their concerns head-on.

Price Smart, Not High

One of the best examples of a smart pricing strategy is Chicken Republic and their famous N1000 rice and chicken meal. Why did this work? Because they recognized that local eateries—bukkas—are their direct competitors. By pricing their meal competitively, they appealed to a broad market without alienating their core customers. They adopted the strategy of lower margins with higher sales. This approach is often more sustainable for small businesses than having higher margins with fewer sales.

You should consider volume versus margin. Yes, it is tempting to price higher to cover your costs, but will that price alienate too many customers? Often, selling more at a lower margin is more profitable than selling fewer products at a higher price.

Build Trust, Then Raise Prices

Another key point is that trust sells better than any Instagram ad ever will. If customers know they can trust you to deliver on quality and reliability, they will pay a little more for the peace of mind. This is where consistency comes in. Once your customers know you will always deliver exactly what you promised, that is when you can start slowly increasing prices. But this comes after you have built a foundation of trust and reliability.

Do not be quick to dismiss customers who say they cannot afford your product right now. Instead, take the long view. Those same customers may come back when they are in a better financial position, or they might refer others to you. It is all about playing the long game.

At the end of the day, you cannot ignore the Balogun Markets of the world. They are part of your competition whether you like it or not. But instead of seeing this as a negative, use it to your advantage. Compete smartly—not just by trying to outprice them, but by offering something more.