Downturns happen, and they can be really tough on businesses. But with the right mindset and approach, you can turn a challenging situation into an opportunity.
Just look at Amazon. It’s a giant marketplace, but it always offers plenty of opportunities to make sales and earn profits, even during a financial crisis.
There are several strategies that sellers can use to increase their success rate during a downturn. Today, we’ll cover these key tactics so you can keep selling during a financial crisis.
What is an Economic Downturn?
A financial crisis is also known as a market downturn. It usually happens when the market goes through a hard, dark time that makes financial growth stagnate. Market downturns are marked by the following trends:
- A slowdown in economic activity
- Decreased consumer spending
- Rising unemployment
- Dropdown in stock prices
During a financial downturn, many businesses struggle to make ends meet. In fact, driving growth may seem like an almost utopian goal. That’s why brands must get creative to navigate such trying times.
Is Amazon Recession-Proof?
Some merchants ponder whether Amazon is a recession-proof marketplace. The answer is no. Amazon still participates in the global market, so it can be immune to a financial crisis that affects all businesses.
However, Amazon has proven agile enough to optimize its business during tough times. That’s what makes it resistant to economic downturns.
Amazon was indeed affected by the 2008 financial crisis, for example. Their revenue growth slowed down, and stock prices decreased. However, even when Amazon had some numbers against them, they weathered the storm.
Some reasons for this ‘success’ lie in Amazon’s customer-centric approach to business. Amazon focuses on delivering an exceptional user experience. They also offer competitive prices, and a fast delivery rate.
The marketplace can also leverage its logistics operations to drive efficiency and reduce costs. Amazon’s invested in automation technologies over the years to improve delivery times, and minimize waste.
Amazon displays initiative, creativity, and efficiency to help its sellers navigate recessions. Such factors contribute to Amazon’s ability to navigate through challenging times. It’s also how sellers on Amazon manage to attract and retain customers, even during a downturn.
How to Thrive During a Financial Turndown
While Amazon will certainly help its sellers, that doesn’t mean you should leave it all to the marketplace.
Here are a few tips Amazon sellers can use to thrive during a financial crisis.
Prioritize Customer Service
Almost 90% of customers decide to keep buying from a specific brand, based on their service experience, according to Salesforce.
So, it’s crucial that you mind how you treat customers as they are reviewing or buying your products. That’s how you can avoid leaving money on the table.
Consumers will try to save money during a financial crisis. They’ll only invest in products and services that they really care about. And some customers will invest in brands that care about them.
By providing excellent customer service, you can build an ongoing, valuable relationship with customers. That’s how you steer clear of missing out of financial opportunities
Keep an Eye on Your Data
To keep growing during challenging times, it’s crucial to gather information about what works for your Amazon store.
Invest in analytics tools that can help you track your sales data. This will help you identify how the market, and your business, will fare in the short term.
With such data, you can make the necessary adjustments to keep sales afloat.
Consolidate Your Online Presence
Pick the two platforms in which your sales or industry thrives the most. Then, start creating valuable content for your audience. A strong online and social media presence will help you drive traffic.
Plus, with quality content and offers, you’ll keep users engaged, and also drive conversions.
Optimize Your Product Listings
When you don’t have an Amazon Store, it’s your listings that’ll serve as the storefront for your brand. So, most of your conversions may depend on their visual quality.
Take the time to optimize your listings with high-quality images. Also, create detailed descriptions that catch the user’s attention.
Make sure that you state how your offers can help customers. Also, provide accurate pricing and service details, so users know exactly what they are paying for.
Create a Cost-Saving Strategy
Sit down and check your numbers. This will help you understand where you can cut some costs and how to do it in the most strategic way.
For example, you can find ways to ship your products for a lower cost. You can also cut back in software tools that are not crucial to your performance.
Eliminating unnecessary costs will free you up to reinvest resources in the key elements of your sales strategy. For example, customer service, shipping, and marketing.
What You Should Avoid Doing
Amazon sellers should always know what actions to take during a financial crisis. However, they should also be aware of the pitfalls to avoid.
Here are some of the most common mistakes that you should avoid during a market downturn.
Reducing Your Ads Spending
You should think twice before cutting back on advertisements. Promos and ads enable sellers to reach out, find new leads, and convert them into customers.
But if you can still afford to stick with your current ads budget, we recommend doing so. Rather than cutting, try to optimize.
Target niche audiences to maximize your ROI. Also, tailor some offers to repeat customers that already know about you.
Lowering Prices Without a Clear Goal
Since people spend less money during a downturn, it would make sense to lower your prices. After all, you want to appeal to budget-conscious customers, right?
Not so fast. Such an approach to pricing may hurt your profit margins, and also your changes to survive a financial crisis.
We recommend focusing on offering value. How? Invest in great customer services and high-quality products. And of course, create strategic offers and discounts.
Neglecting Inventory Management
Always keep a close eye on your inventory levels and logistics. This is key to avoid overstocking on low-selling products, or running out of stock on best-selling offers.
Overstocking can tie up your cash flow. In contrast, running out of stock can lead to lost sale opportunities and dissatisfied customers.
It’s easy to get caught up in the day-to-day challenges of a downturn. But it’s important to remember that your customers are still your top priority.
Keep your customer service levels high and be responsive to their needs and concerns. This can help you retain loyal followers, increase the chances of upselling, collect positive reviews, and grow your client base.
Focusing on a Single Revenue Stream
Don’t only focus on selling your current products. That’s choosing to forego potential profits. Try to expand your catalog in creative ways.
For example, you can start a side hustle by reselling used products, or design print-on-demand items.
There are a lot of ways to bring product ideas to life without investing. Doing so will get you a nice additional income stream.
Now you have all the information you need to navigate a financial downturn. The key is to build a strong business foundation now, so you can thrive with ease in the future.
Remember, never make decisions based on fear or panic. Instead, take a thoughtful and strategic approach to the crisis. That’s how great sellers navigate such challenging times.
Antonella Fleitas is a freelance content writer from Argentina. Antonella’s worked with many businesses and educational projects to create fact-based, evergreen content about science, language learning, and culture. Her main goal is to build a strong content foundation for her clients, based on meaningful stories that people can learn from.