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How Will Today's Economic Issues Affect Your EBiz?

If you already have your EBiz up and running, this could be a surprisingly good Holiday Season for you. If you don't, you should probably get started now.

Gas prices are still rising at the pumps. More than a million people have been tragically victimized by one of the worst natural disasters the US has ever faced. There will be changes in our economy this Fall that probably would have happened to some extent anyway, but will definitely be magnified by the fact that Hurricane Katrina has caused such destruction, and has also severely affected our petroleum refining and product importing industries along the Gulf Coast.

What effect does all this have on your EBiz, and ECommerce in general?

Before I get into that, I have to be very clear about something. I am profoundly saddened to see the terrible tragedy that has hit our neighbors along the Gulf Coast, only a few hundred miles from our own homes here in Florida. The thoughts and prayers of everyone here at Worldwide Brands go out to the unthinkable number of people who have lost their homes, and far worse in some cases, members of their families. We all sincerely hope for the best for all of you.

I say that because I don't want this Newsletter to sound like this tragedy is in any way some kind of benefit to anybody. It isn't.

We, as Entrepreneurs, though, have to look toward some kind of strategy to maintain and even to try to grow our livelihoods during any kind of disaster, especially one that affects the US economy the way this one will.

In the next few months, gas prices will likely continue to rise, although hopefully at a slower pace. Insurance rates will climb, and possibly interest rates. Heating oil, electricity and natural gas will cost more this coming winter.

Believe it or not, those negative things could very well mean an unusually busy Holiday Season for ECommerce.

Think about the fact that already people are cutting down on the number of average miles they drive. This Holiday Season, which is already beginning in the retail industry, will undoubtedly see fewer people who are willing to spend gas money to drive all over town buying presents. Physical retail stores at your local mall will probably see a decline in business. Those who already shop online, though, will do so at an accelerated rate this year, and many of those who don't shop online will start to do so.

By the time the Holiday Shopping Season really gets rolling, most people are going to be feeling even more economic pressure as the reality of fuel and insurance price hikes sink into their monthly budgets. This means that this year, most people will have less Disposable Income (the money left over after you pay your bills) to shop with. They will also be less inclined to spend outrageous amounts of gas money to make repeated trips to the malls and other physical stores.

As that reality sinks in for the physical retail stores in the malls, they are likely to cut down on the amount of product they'll be buying from their wholesale suppliers. When they have fewer walk-in customers, they don't want to tie up as much money in putting products in their own store warehouses.

That in turn means that wholesalers, who are already stocking up for the Holiday Season, will begin to worry about having too much product left over at the end of the year.

So, it becomes likely that wholesalers will begin to offer reduced price deals on existing inventory.

Do you see where this is going? A Holiday Shopping Season in an economic trend like this one points to Online Shopping as the most cost-effective way to go for the consumer. At the same time, wholesale prices on existing inventory from legitimate wholesale suppliers are likely to drop to some extent.

This should actually be a very good year for home-based EBiz.

None of us likes the fact that the economy is not the way we'd like it to be right now. I'm not saying that anyone should be happy about the way this trend is going, and will go for the next few months or more.

However, when you're in business, you need to look at the big picture as it affects your business, and this is what it looks like to me for this Holiday Shopping Season.

Keep in mind, also, that because people will have less Disposable Income this year, they will not be spending as much money on expensive products. Probably the best place for an EBiz to be this Season is selling products that are middle-of-the-road when it comes to cost.

So, to take the best possible stance for your EBiz in a tight economy, keep these things in mind:

With rising gas prices and other fuel prices, fewer people are likely to drive around shopping at physical stores, and many will shift to buying much more product Online.

Many people who have never bought online before will begin to do so.

This means that physical stores will reduce their inventories, and wholesalers will begin to worry about having leftover product at the end of their year.

To bail themselves out of costs already expended on existing warehouse stock, many wholesalers will begin offering special deals on their products. Talk to your wholesale suppliers, and keep an eye out for those specials as they come up later in the Season!

With less Disposable Income this Holiday Season, people will be looking for nice, but less expensive products to buy as gifts. Keep that clearly in mind when choosing what you'll sell!

Yes, shipping prices will go up, because the major shipping carriers (UPS, FedEx) have to pay for gas too. However, it still saves people more money to buy online and pay slightly higher shipping costs rather than paying however many dollars per gallon gas will rise to in the coming months, in order to shop at the malls.

These are the reasons I'm saying that if you already have an EBiz, this could be a very good Holiday Season for you, and if you don't have one yet, this is a good time to get started.

Nobody likes an economic trend like this one, and we all hope things get better soon. They always do, somehow, given time. However, you can turn a nice profit in this trend if you pay attention to it's effects.

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