Does Recession has an effect for our online business?
Every day brings news of traditional businesses struggling in the recession - banks, auto companies, airlines and retailers are all having a tough time and in some cases going bust. But what of the world of e-commerce?
The online world has lower overheads than the bricks and mortar world, but some sections of it are heavily dependant on advertising, and they are struggling as businesses cut back their advertising budgets across the board. AdBrite, one of the top five online advertising networks, announced that they are laying off 40% of their staff. The UK blog advertising firm Matched.co.uk and the writing site thisisby.us have closed their doors entirely. Basically if your online business depends on advertising revenue for it’s income and you also have staff overheads, you could be vulnerable.
What about online businesses that sell things? There is a consumer slowdown, but the online retailer has an advantage over the traditional retailer due to lower overheads. Provided you can beat the traditional retailer on price and service you should survive. However, some sectors will do better than others. Those selling things such as clothes, chocolates or providing cheap escapism through selling books and DVDs should survive. But if you are selling things such as Star Wars collectors merchandise, old comics or other such fripperies, you might find your sales dry up as consumers cut back or postpone spending on these items. In particular those who make a living selling things on Ebay will see a drop in income as consumers are simply not willing to bid up prices anymore.
What of the “mommy blogger” or the self-employed individual who earns online through writing content and making affiliate sales? They have extremely low overheads, but as the recession bites they will find more and more people turn to the internet to earn a living, so competition should increase exponentially. Only those who provide quality content will survive.
There are two ways that these self-employed individuals earn online - they either run their own blogs and websites, or they provide content to a third party such as Helium or Today.com. Be aware that if you are providing content to a third party, your work is not just having to earn enough through advertising to support you, but the employees of that company too. As noted above, one such company, thisisby.us, has already folded. Cash out regularly to make sure that you are not left having done work that you don’t get paid for should the company go bust. Also set up your own blog or website and start promoting it. With your own site, your content simply has to earn enough to support you. True, you will have to work harder to ensure that your work gets read, but simple SEO techniquess should help with this especially if your work is of high quality. Quality is the key here - if your content is poor you will sink fast.
This is the first recession that is taking place in the context of a mature e-commerce world. Though there are some claims bandied about of how e-commerce is recession-proof, no one is immune to the laws of capitalism. Only the strongest brands and best quality content suppliers will survive.