Why I Think Recession is Good for Online Business?

By: Yan Susanto     Topics: Blog

Recession not only affects our minds and our lifestyles, it also changes the way business is run. The big corporate fishes are planning for liquidation and bankruptcy. Some are opting for restructuring and those who are a little luckier are getting friendly mergers and acquisition as a much needed breather.

Think of the common men. Cost cutting measures and subsequent job downsizing from companies have left him nowhere. With the cost of goods going through the roof, disposable income has shrunk to an all time low while the cost of living becomes unbearable to many. Overall, living in a world smacked in the middle of recession is not easy.

These aren’t great times but they are times of opportunity.

“In the middle of every difficulty lies opportunity” – Albert Einstein

Internet has opened the door of endless opportunities. It has turned the world into a virtual village where we can access any geographical location with a simple click of the mouse.

Internet has also brought forward many online business ideas like e-commerce, network marketing, affiliate marketing, among others. In fact, seen from a broader perspective, recession sounds like being good for online business.

Let’s take a look at why I think recession is good for online business.

Online Spending is Growing

A drop in disposable income as a result of budget tightening leads to a change in buying frequency and also spending style. When gasoline prices soar, making a car trip to the retail outlets becomes more expensive.

What’s then the option left for budget-conscious consumers? Internet.

First, there is a mélange of choices on offer online with various coupon codes being floated by companies that can let you snatch on crazy rebates. You can easily get a far better deal than the traditional sales channels, thus saving cost.

To add this, online retailing provides the convenience of buying your stuff from anywhere in the world sitting in the cozy quarters of your home and have it delivered to you at the click of a mouse.

According to Business Week, UK consumers spent £4.67bn shopping on the web in December and on Christmas alone Amazon sold 6.3 Million Items in a single day.

Isn’t that figure amazing?

Hence a change in shopping behavior and a shift in the way business is done have certainly opened up a huge market for online business.

In fact, almost everything sells on the net and everyone buys online today.

Online Business is Recession-Proof

The second reason pretty much ties to the first one. As online shopping becomes the norm, this provides a huge opportunity for companies whose businesses are feeling the heat of recession and individuals whose income is shrinking and are in search of alternative sources of income stream to pay the bills.

Now think of it this way. Recession has made companies take stock. They are feeling the pull in wrong places. Managing organizations and entire payment and sales logistics is getting steadily more difficult.

What do the companies do then? Obviously they cut down on costs and move their business online. Online business, most would agree, is the best possible way of cutting down costs in times of recession. Think of advertising costs first; traditional print advertising certainly costs more than internet advertising and for this reason alone, companies are focusing their marketing online. Besides, generating leads via website sign-up requires lesser money and more effective than the traditional cold calling.

Now as more and more companies are turning to internet to do business online, some smart internet marketers see the opportunity that a recession presents and are quick to capitalize on that opportunity.

They simply beat the recession by starting an online business just by showing people “how to start an online business”.

It may sound over-simplistic but therein somewhere lies the truth.

In short, they see that “In the middle of every recession lies an opportunity on the internet“.

What do you see? and most importantly, what do you do?