Up until recently, the online businesses I work with don’t seem to have been affected that badly by the economic downturn. Whilst the high streets became more and more full of empty shops, most of my clients seem to have chugged along OK, maybe not growing quite as fast as they had been, but growing nonetheless. However, this summer has been really slow for a lot of my clients, and I’m wondering whether the recession has properly started to bite.
Hot Dry Winds of Recession
What are your options when your business starts to feel the hot dry winds of recession rattling the windows? Should you go the route of austerity, as our government has done, and cut back on spending, or is there another way you can strategically go for growth?
One of my clients, a purveyor of high-end toiletries, decided to go the austerity route and slim down their product range. Rather than stocking a vast amount of different lines, they decided to focus on the most profitable lines, selling off the excess stock in a summer sale. This strategy saved them storage costs and simplified their logistics, but more importantly, it meant my client was forced to take a long hard look at his business for the first time in years. Through this process of trying to protect his business he realised that it was possible for him to change from being a moderately successful seller of general products to everyone, to being a really successful purveyor of certain products to specific market niches. Tough times can sometimes trigger these epiphanies.
Sheltering from the Storm
If reshaping your business doesn’t appeal, then what options are out there for growing your business? One client decided to pursue growth starting to sell via Amazon and eBay, in addition to their existing online store. Both Amazon’s Seller Central and eBay’s Shops allow merchants essentially to set up a market stall within a vast shopping mall and benefit from the vast numbers of visitors that those two sites have going through their doors every day. Selling in either of these places isn’t a walk in the park though. As you expect, they take a significant commission from each sale (up to 15% for certain products on Amazon). And to make it worth your while you really need to figure out how to get your products automatically importing into Amazon and eBay in bulk. This means solving the technical problem of extracting product details out of your existing system and translating them into a format that Amazon and eBay can understand. I was able to set up some Excel macros for my client, but it took a few goes to get it all working smoothly.
Of course, the slowdown in sales this summer could just be a result of people using their PCs to check up on Team GB’s progress rather than spending time shopping online. Maybe things will return back to normal in the run up to another profitable Christmas. We’ll see. Either way, the ideas above are a good way of increasing profits and keeping your business sheltered from the storm.