Too Cheap to Haggle Over, but also too Important to Ignore

I had a door handle break on my car the other day- what a hassle. I called my dealership and ordered a replacement handle, which they will install. When they told me the price, I didn’t haggle about it. The part was not very expensive, and I don’t know how much a car door handle costs! All I knew was that it needed to get replaced soon.
That same thought process happens to some customers of Linear Technology. They “have built one of the world’s strongest profit fortresses by staying strictly at the fringes, where competition is low and (profit) margins are high.” The “midsize company makes 7,500 arcane, unglamorous products that solve real world problems. Linear makes so-called analog chips that are too cheap for customers to haggle over, but perform chores too important to ignore”.
The result? Linear has increased control over the product pricing. With little competition, they can charge higher prices.
The Lesson: Business owners need a constant awareness their markets and the number of competitors. Whenever possible, consider areas with fewer competitors- which means less pressure to lower prices.
Your Homework: Is there a product niche you can enter that has less competition? Are you already in that type of product niche? If so, can you raise your prices without losing customers?
(Source: “In a Tech Backwater, A Profit Fortress Rises ”, Wall Street Journal, 7/10/07)