As an eCommerce store owner, you may have actually seen a spike in your sales.
But as we slog through an inevitable economic downturn, recession proofing your business is key.
For now and for the long term.
Today I’ll be going through my top tips to recession proof your business, whether you’re going on the defense or the offense. If you’re looking for a side-hustle to supplement your main business, check these opportunities out.
- The 30-5 Plan to Cut Unnecessary Costs
A 35 plan assumes an immediate 30% dip in your revenue while still making a 5% profit.
To defend yourself against the revenue dip, go aggressive on cutting back all bills and any unnecessary costs as soon as possible, including:
- Subscriptions: Pause or stop any monthly recurring subscriptions that aren’t essential for your business.
- Service providers: Stop working with service providers that you don’t need or negotiate a decrease in the scope of work to lesser costs if you’re on a contractual obligation.
- Contractors: If you have employees on the payroll, you might need to consider lay-offs in exchange for contractors. If you work with too many contractors, consider pausing or decreasing their workload.
- Rent: Negotiate a decrease in rent, deferred payment, or both. Once settled, modify one these universal templates and with your agreement and send it to your landlord.
Some of these may be hard to decide on but it is crucial that you reach your 30-5 plan. Alongside this, you need to be more aggressive in marketing and promotions. During times like these, it is essential that you come out ahead.
- Get creative with excess inventory
People on lockdown in their homes are browsing more than ever and many still want to buy things.
If you have excess inventory that you’re worried about, put it on sale on free platforms so that your products get exposure and higher ranks.
A great example of this is Hauldrop, where products are advertised and upvoted by a large community.
It’s super simple to get your product listed and with a fast growing community, you can get good exposure for free.
- Keep cash flow in your business
During a recession, it’s essential that you have cash money in the bank so that you can sustain and gain to make it through.
As the lockdown drags on, people will start moving to essential spending only. It’s essential that you grab every opportunity you can get to ensure your long term viability.
Your customers don’t want your business to shut down. They want to help you. So provide them with ways to receive your products or services, even if they are tight on money.
The best way that you can do this is to create short term deals, gift cards, extended free trials, and local pick-up or curb-side delivery options.
If you’re like most eCommerce business owners and you have your store on Shopify, you can check their Covid-19 response to get help on gift cards, loans, trial extensions, and delivery options.
- Take advantage of FUD Advertising
As businesses pull back on advertising dollars, online ads are getting cheaper as there are less bidders. That means cheaper acquisition costs through the paid channels you use to drive sales.
FUD stands for Fear, Uncertainty, Doubt. There is alot of fear and uncertainty now – funding is getting pulled, stocks in stores are getting low and people are buying whatever is available.
It sounds manipulative, but this is a perfect opportunity to spend on paid ads as shop shelves empty.
By taking advantage of FUD advertising, you are making the best of the current situation and while it may seem wrong sometimes you need to do whatever you can to save your business.
Here’s a landing page from a Facebook Ad that Kettle & Fire is running, which uses scarcity to collect emails so that people can stock up on ‘emergency kits.’
With these advertisements being cheap it really helps to get your products the exposure that they need. Get right on this because FUD advertising only works during the FUD.
- Experiment with Marketplaces
The best time to list your products on marketplaces you haven’t is now.
Most of the marketplaces below have been around for a while but most are free and some only have small costs. Here are some examples of marketplaces to experiment with:
- Facebook marketplace
Some platforms are no longer accepting new products due to the large load they are receiving, so go put them up while you still can. This ensures that you are getting good exposure on your products on multiple platforms for all the people browsing at home.
- Give video a chance
Many people are at home making it the perfect time to put out videos, find people that have done reviews for your products or people that want to do reviews. This will help to get people talking about your products.
Video advertising can be really effective, and with the current state of the economy, it might be the perfect chance for you to get some videos promoting your business for only a fraction of the cost.
There are so many platforms out there, but try to focus on platforms with higher daily viewers, such as:
Another thing to consider is that these people are probably also struggling to make money so you can get great deals with them.
This is a small example – there are thousands out there so go and find some that stand out to you.
- Connect with groups and communities to increase exposure
There are groups for every single type of business. All you need to do is find the ones that are relevant to your business and ask them to work together.
Many of these groups can be found on large platforms like Facebook, but if you look for specific ones, they often have their own website/platform.
A great place to do this is A better lemonade stand, where after joining you can find people with similar interests and work together, helping each other to succeed.
With multiple platforms and different kinds of members here, you can find both customers and people with business interests, making it the perfect place to expand your business.
- Use sale influencers to promote your business
Sale influencers are often much more effective than media influencers. This is because even though someone has millions of followers, it doesn’t mean that their followers will purchase the products they use or promote.
Sales influencers have real clients so all you need to do is reach out to some and come to a deal to start selling. Examples of this include;
- Realtor: if you’re selling properties
- Online shops: that are selling similar products
- Online services: that are providing similar services
This list goes on and on so it is up to you to find the right sales influencer for your business.
- Keep your Email list updated
Make sure you stay on top of your email list, keep your onboarding updated, and switch to free email marketing services to help you cut costs.
Don’t be afraid to try a few different onboarding emails to see which works best for your business.
With people in isolation they want to connect more than ever, so send interesting emails personalized to your customer base. Try to do this at least weekly to keep them active and interested in your products.
- Use Referrals to increase sales
Every customer that has purchased from you is a potential seller. If you give them rewards for referrals they will be motivated to sell more of your products. This could either be a percentage of the profit or more free products.
Businesses to business companies with referrals have up to 70% conversion rate and close time on sales. Most people during this pandemic need money so keep this in mind, if you can provide a great enough reward people will gladly work with you.
- Create payment plans for your customers
Now is a perfect time to start offering payment plans, with people having less money to spend monthly payments are a great way to keep on selling your products. Consider offering up to 0% interest rates.
A great example of this is Klarna; here you can purchase a large variety of products from different brands and pay up in interest-free installments or even pay 30 days after purchase.
This is a great way to keep your customers purchasing your products even if they cannot currently afford them due to the global pandemic.