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Is Your Business Ready for a Recession?

Is Your Business Ready for a Recession?

We have heard repeatedly for the past few years that there could be a recession in the next six months, yet it hasn’t panned out. With unemployment extremely low at 3.4%, even amidst the many tech and banking layoffs in the news, there are still plenty of job openings. The biggest indicator of all, however – consumers are not cutting back on spending for essential or nonessential goods and services.

Economists believe that if the Fed continues hiking interest rates to lower inflation, eventually this will cause consumers to cut back on spending, leading to a drop in sales and eventually layoffs. As a business owner, you know that the economy can be unpredictable and with a potential recession looming, those who are unprepared may struggle to survive. 

But with the right preparation, your eCommerce business can weather any economic storm that comes your way. Are you prepared?

Analyze Demand for Your Products

To ensure your business is recession-ready, you must analyze the demand for your products. It is important to re-examine customer needs, especially during a recession when customers tend to be more cautious with their spending. By understanding these changes, you can adjust your products or services accordingly.

Another crucial aspect to focus on is inventory management. Knowing what products you have in stock, how much of each product you have, and the rate at which these products are selling is essential during a recession. 

By keeping an eye on your inventory, you can adjust your orders and avoid having excess stock that may not move, freeing up cash and storage space for products that are more likely to sell during a recession. Removing slow-selling products from your inventory is also important, as they can tie up your cash and valuable storage space. To learn more about the importance of inventory management practices, visit our recent blog.

Analyze Efficiency

In addition to analyzing demand for your products, you must analyze efficiency. During a recession, it is essential to do more with less. Reevaluating your business processes and cutting ineffective products and processes can streamline your operations, reduce costs, and increase efficiency.

Your retailers and marketplaces should also be analyzed during a recession—where do you sell the most product and which do you have the best relationships. Your retailers and marketplaces are focused on the customer’s journey from start to finish, including accurate inventory records, minimal errors in shipping, and timely shipping. 

By focusing on these areas, you can provide a better customer experience, which can lead to increased sales and customer loyalty for both you and your retailers.

Keep an Eye on Cash-Flow

Keeping an eye on your cash flow during a recession is crucial. Knowing what products are moving and which ones are not will allow you to avoid sinking cash into products that will not sell. Monitoring your accounts receivable and accounts payable will ensure that you are getting paid on time and paying your bills on time.

A recession can be challenging for businesses, but with the right preparation, you can ensure that your business is ready for whatever is ahead. Now is not the time to panic but to focus on the areas that can make your business stronger in the long run. 

 

Simplify with OPAL’s 4-in-1 Software Solution
EDI | Order Management | Warehouse Management | Shipping

OPAL is the innovative solution to simplify your small to mid-sized to enterprise business fulfillment needs in today’s rapidly transforming retail world.  

As your business looks to be proactive and ready for whatever 2023 holds, OPAL is here to help your team develop the right strategies through automation and process improvement to be prepared for the year ahead.

To learn more about how your eCommerce business can thrive this year, click here!

3 Trends Here to Stay

3 Trends Here to Stay

The past few years have been full of twists and turns for eCommerce, but there are three trends that began in 2022 and seem to be strengthening as we progress through 2023.

M-Commerce


It’s so new, many are unaware of the new term and have not realized that a large portion of the past year’s sales were actually segmented as m-commerce, also known as mobile commerce.  According to Investopedia, it involves using wireless handheld devices like cellphones and tablets to conduct commercial transactions online, including the purchase and sale of products, online banking, and paying bills. 

With one in five smartphone users spending more than 4.5 hours on average on their phones each day, this segment of eCommerce is expected to continue to grow at rapid rates.  In 2021 during the pandemic, m-commerce accumulated more than 54% of all eCommerce sales worldwide and according to Statista, the US reported 72.9% of purchases were made on mobile devices.  

Optimizing your e-shop and online advertising strategy for mobile has never been more important as consumers shift more habits and shopping to mobile opportunities.

Marketplaces


As the popularity of shopping at the top eCommerce marketplaces like Amazon, Walmart, and Etsy has increased, it has become more critical than ever for suppliers and small business to understand how to successfully meet the requirements of these marketplaces to continue to supply products to their consumers.

It is estimated that marketplaces were approximately 63% of the $4.27 trillion in global eCommerce sales in 2020, when it was still a relatively new concept outside of your typical Amazon and Etsy.  As other major retailers joined in to develop the infrastructure to manage and grow their eCommerce marketplace, it is estimated that even with the inflation and consumer spending potentially slowing that 2023 will have an estimated $5.7 trillion in total for eCommerce and the marketplace will be a large portion of this.

Developing consistent processes to regulate inventory across multiple platforms and shipping processes that are up to the consumer standards will continue to increase trust with each of your marketplaces.

Automation


This comes as no surprise as consumers are living more of their lives online and expect products faster and faster, it has never been more critical for success than now to have efficient processes in place to reduce errors across your inventory, fulfillment and shipping. According to Hubspot, 76% of companies today are using some form of automation, while Automizy reports that it’s closer to 85%.

Automation allows your business operations to flow smoothly with drastically fewer errors than if it was conducted manually and allows your eCommerce business to process more orders per day with the same number of people on your team.

Improving processes increases your vendor ranking, which will increase your visibility to consumers because retailers and marketplaces want to know that their suppliers can keep up with the ever-increasing expectations of consumers today.

Simplify with OPAL’s 4-in-1 Software Solution
EDI | Order Management | Warehouse Management | Shipping

OPAL is the innovative solution to simplify your small to mid-sized to enterprise business fulfillment needs in today’s rapidly transforming retail world.

As your business looks to be proactive to improve processes in 2023, OPAL is here to partner with you and have you ready for your next season of growth.

To learn more about how your eCommerce business can thrive this new year, click here!