Tuesday, December 30, 2008
E-Commerce Is Recession Proof
Most businesses would not think that customers being cheap would be a good thing for business. In most cases this is true. However, typically during a recession, people don’t stop spending, they spend smarter. This is beneficial for e-commerce websites because people believe that they get better deals online and are more likely than ever to make purchases online. This is for a few reasons.
Customers can compare prices online (make sure your prices are competitive).
They can save gas (this is actually a factor in this day and age).
Online transaction security has greatly improved recently, increasing customer trust.
Some customers feel that buying online helps save the environment.
Buying online is simply more convenient for most customers.
Product imaging has improved greatly. Customers can now view hi-res product images and videos in seconds online.
Product reviews are now prevalent online. Customers are more likely to buy a product if they can read reviews about it.
Low Overhead Costs
Cutting overhead costs is one of the first thing many businesses do to survive a recession. E-Commerce websites enjoy some of the lowest overhead costs of any business operating today. For small e-commerce businesses you are looking at very low overhead costs each month. Typically the only bills you HAVE to pay as an e-commerce merchant are:
Your internet bill - it’s fairly hard to run an online business without an internet connection.
Your electricity bill - same as above.
Your hosting bill - your e-commerce website probably needs to be online to get sales.
Any monthly fees your payment processor may charge
For many e-commerce merchants that’s it!
So don’t worry too much about cutting overhead costs. You are already enjoying some of the lowest operating costs of any business model in existence.
E-Commerce Is Recession Proof
Most businesses would not think that customers being cheap would be a good thing for business. In most cases this is true. However, typically during a recession, people don’t stop spending, they spend smarter. This is beneficial for e-commerce websites because people believe that they get better deals online and are more likely than ever to make purchases online. This is for a few reasons.
Customers can compare prices online (make sure your prices are competitive).
They can save gas (this is actually a factor in this day and age).
Online transaction security has greatly improved recently, increasing customer trust.
Some customers feel that buying online helps save the environment.
Buying online is simply more convenient for most customers.
Product imaging has improved greatly. Customers can now view hi-res product images and videos in seconds online.
Product reviews are now prevalent online. Customers are more likely to buy a product if they can read reviews about it.
Low Overhead Costs
Cutting overhead costs is one of the first thing many businesses do to survive a recession. E-Commerce websites enjoy some of the lowest overhead costs of any business operating today. For small e-commerce businesses you are looking at very low overhead costs each month. Typically the only bills you HAVE to pay as an e-commerce merchant are:
Your internet bill - it’s fairly hard to run an online business without an internet connection.
Your electricity bill - same as above.
Your hosting bill - your e-commerce website probably needs to be online to get sales.
Any monthly fees your payment processor may charge
For many e-commerce merchants that’s it!
So don’t worry too much about cutting overhead costs. You are already enjoying some of the lowest operating costs of any business model in existence.
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