**NOTE THIS EPISODE WAS RECORDED BEFORE THE FBA CHANGE ANNOUNCED ON 3-17. SEE OUR UPDATE HERE.
In this episode of the Marketplace Blueprint Podcast Robyn talks with e-commerce futurist, John Lawson, about how the coronavirus is affecting online business, online sales, and things that we should be considering as we sell online. What considerations and steps do you need to take in your business?
Risk and Reward
To make money in times like this, you’re going to have to take a lot of risks. It’s very difficult to predict how long the current situation will last and how it will develop in the upcoming weeks. As China comes back online, America is about beginning to lock down social movement, so it’s not getting any better.
Right now it is unclear how much of an impact this will have on the economy and e-commerce specifically.
When looking at potential inventory purchases and cash outlay, you need to take into consideration that your revenue might dip. While we hope this dip is temporary, you will still have escalating bills and unplanned expenses. So you’ve got to take all of these factors into account when you’re doing your risk assessment on how you should buy.
What Steps Should I Take?
Cash- Make sure you are completely clear on how much cash you have. Look at any potential cuts you can make to expenses or staffing.
Inventory- Review your inventory and look at restocking. Know that traditional forecasting is likely not going to work. If you have existing stale inventory, look at what options you have to liquidate or encourage sales.
Pricing- Remember that increasing pricing as little at 10% (without increased costs to you) is illegal in many states. Review your repricing software to avoid any potential legal issues in regard to price gouging.
Focus on saving rather than profiting.
Most of us buy inventory and the inventory itself has value. The best thing you can do in terms of restocking is thinking of making your profit on the buy, not on the sale. Focus on how much you’re saving by buying under the current conditions and selling at your usual price point.
Keep the ship afloat
Make sure that your family and your workers are protected; work to have as much cash as possible. Sometimes that means, cutting back on expenses, reducing employee hours to keep them on board and taking the time to go over your cash flow projections.
Things will return to normal, but you need to adapt and survive until then. Having sufficient cash flow means that you will have the funds to make the inventory purchases needed as this crisis normalizes.
Don’t forget about your customer
Amazon’s mission is “absolute customer satisfaction”, regardless of the situation, so keep an eye on your stock levels and be very mindful of your pricing, especially if you sell necessary goods.
Remember price gouging (raising prices on essential goods in a crisis) is a crime in many states. You can count on many states to be looking to prosecute those breaking this law.
Amazon also wants to be known as a reliable marketplace for goods at affordable prices. Creating negative customer experiences, by raising prices steeply will create negative customer experiences and could put your account in jeopardy.