So, about 3 years ago I invented a product that helps to cool computers. I did a kickstarter in early 2016 and it was a big success. At the same time as I started the kickstarter I made my shopify store.
The first 8 months were slow then between Thanksgiving and Christmas things just took off. I hired more people, increased production (We make everything in our shop) and life was good.
Fast forward to the summer of 2018. One day I'm checking out the Amazon listing and a suggested product popped up that looked identical to our product. I mean it looked identical in every way, even the wording of the listing is identical. I ordered one and sure enough, It is an exact copy down to the minute detail but it's a junky, Chinese knockoff. Poor machining, poor materials, wrapped in paper and sold in a cheap box. It's priced at around 2/3 the price of ours.
We take pride in our product, it's well engineered, well machined, made with high quality materials and our feedback reflects that. I contacted Amazon about it and they basically laughed at me.
My first reaction is to drop prices to match theirs but my feeling is, that will just start a price war which we won't win.
Interesting. I would suggest to keep quality of your products high while checking all options if you can lower your price (outsourced some process, find better/cheaper material, cut down manufacturing time and all). In my mind, customers/visitors will always look at RoI for their expenditure. How much they paid and what did they get in return. If that chinese look-alike product does its job for the function of the product, you are in tough luck. Otherwise, I am hoping you would be able to convince your customers that what you pay what you get.
I am advising against my own business model though where my companty allows customers to negotiate/bargain with the sellers online and sellers and buyers can agree on price. I believe that working with existing traffic (website visitors) is fat cost effective than buying more traffic and having dismal conversion rate
There's not much you can do about it. Chinese copyright and trademark law is different than that of the U.S.
AliExpress is also filled with fake brand stuff, not much you can do about it.
I'd focus on building a strong brand that people trust and where they know only qualified resellers offer your products. You can even make informative videos on how your product is so much better than any knock-off, put the products side-by-side.
Warning to all dropshippers: don't sell knock-offs. Obviously that's still infringement in the U.S. and Europe and you're guaranteed to get into trouble.