Try this where you live.
Find every way water is sold near you and work out the price per litre. Not the price on the label, because those are different amounts. Price per litre, so the comparison is honest.
In Sulaymaniyah it looks roughly like this. An eighteen-litre dispenser bottle works out at about eighty-three dinars a litre. A pack of small plastic cups, around two hundred and thirty. A standard bottle of water, a thousand. A local premium glass bottle, four to six thousand. And a bottle of imported premium water, sixteen thousand dinars a litre.
Same substance. Roughly one hundred and ninety times the price, top to bottom.
Nobody is being cheated. Everybody in that range has customers who are satisfied. So what exactly is the person at the top paying for?
Not the water. They are paying for the glass, the weight of it in the hand, the label, the restaurant it arrives in, and what carrying it says about them. They are paying for position, which is the place the product occupies in their mind before they taste anything.
Position is not quality
This is where people get it wrong. They assume the expensive one must be better, and that if they improve their own product enough the price will follow.
Sometimes. But position is not only quality, it is the whole frame. Who it is for. Where it is sold. What it sits beside. What it costs, because price is itself a signal. A bottle of water priced at a thousand dinars and a bottle priced at sixteen thousand are not competing, they are in different categories in the customer's head, and the customer put them there.
Look at Liquid Death. It is water in a tall black can that looks nothing like a water bottle, sold to people at concerts and skateparks, priced well above ordinary water. The product is the least interesting thing about it. Everything that makes it work is position.
What this means for your business
Most small businesses compete on price because it is the only lever they can see. It is also the one lever your competitor can always match, immediately, and the one that costs you money every time you pull it.
The water range tells you something more useful: the same thing can occupy many different positions, and the position is largely a decision. Not entirely, because you have to deliver whatever the position promises. But largely.
So before you lower your price again, ask a different question. Not how do I become the cheapest, but who is my version for, and what does it need to be so that those people would be glad to pay more.
One of those questions has a floor. The other does not.