Different niches have different levels of competition. Some niches link SEO and link building have an insane amount of competition. If I had to put a number to all of the SEOs and SEO companies out there, it would come to around 30,000-40,000! For that reason, normally, there is an insane amount of competition in this market.
However, an interesting thing to notice about SEO companies etc. is that most of the players compete on price. And by competing on price, they force themselves to work on minimal profit margins. Sometimes I am amazed at how cheap directory and article submissions can be (with regards to the links built, not with regards to the actual benefit given).
The main reason why companies compete on price is because, well, that is their only option. Had they created a brand and positioned it in the right way, they would not have been working with a 5-10% profit margin.
Branding is all about creating a sense of “importance” in the customer’s mind.
A price competitor would say: If you hire me, I will get your work done at the minimal price!
A well-known brand name would indirectly say: We work hard for you, but in order for that to happen, you need to pay us a premium.
Branding is always about holding a unique position in customer’s mind, which can then be used to charge a premium.
I have always found differentiation to be a much better approach than simply competing on price, which is can be a very self-defeating feat. In the end, you come out of the business tired, broke and exhausted.
Remember, branding takes time to put into place. Expect to invest a year or two in branding your business/website after which you will reap the rewards!