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I’m curious as to how the economy is affecting small dropship retailers. My two stores are fairly young, so they are growing, although not tremendously. I’m sure in a stronger economy, I’d be doing better, but I’ll take what I can get right now.
So does a weak economy help or hurt us small retailers? I guess there are two sides. On one hand, Americans in general have less money to spend on stuff. So depending on what you sell, your customers have less income to buy your goods. So certainly we’re not in great shape in that regard. The price of everything is going up, so manufacturers will have to start raising prices. This causes your costs of goods to rise, and in turn, you may have to raise prices. No body likes this, and your customer will be unhappy. Two strikes. Finally, shipping costs are on the rise which may cause shopping carts to be abandoned once they see how much shipping will cost. Three strikes, ouch.
On the other hand, all retailers are facing these same factors. At least we don’t have large facilities to man, or pay rent on. We don’t have big inventory issues or have to worry about cutting jobs as the brick and mortars do. Secondly, fuel is the main reason that shipping costs are going up. So customers do have to choose between spending money on shipping, or putting gas in the van to drive to the mall. For me personally, I’d still rather order from my computer than run around town. Finally, the economic stimulus checks are coming, so maybe things will jump up soon.
I want to hear from you. What are your thoughts? How is the economy helping or hurting your business?
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April 21st, 2008 at 5:40 pm
I think that online retailers will do better than traditional brick and mortars.
Online merchants also have the ability to make huge improvements to their site – in terms of SEO or traffic or Amazon etc. to make up for a general slowing. A traditional retail store is much more limited.
I think that a recession is an opportunity if you use it to become more efficient and more focused in your business. If you make yourself competitive in a tough environment, you will flourish as we come out of it.
More fortunes are made in tough economic times than any other times.