Tips for beating out the competition?

The product I’m selling is relatively niche but has a few thousand in sales per month. I’m mostly using this as a learning experience and maybe we’ll go from there. currently it retails on Amazon for 9.99. It can be sourced for 89 cents on the dollar, but fba fees eat up another $6 or so of “potential” profit. I seem to be the first of these sellers to realize that this product now qualifies for the loosened “small and light” guidelines and by enrolling this I’ve increased my margin by $1.30 per unit. I should be profiting $3 per unit after product cost, shipping, and Amazon fees. I will be selling on my own listing, however I did get on two other competitor’s listings just to spy on things like shipping class. If I want to rank quickly would I be better off lowering my price 2 or 3 dollars and fight for sales by being the cheapest or am I better off matching my competitors and spending my that money on PPC?