We’re all thinking it – so I’m just going to say it – the 2020 coronavirus related economic downturn has store owners on edge.
Thoughts of having to close the doors and bankruptcy might have crossed your mind, as it has mine.
But I wanted to write to all our customers today to give some much needed positive mindset adjustments to this situation. It’s a very difficult time, yes, but in a time when a lot of things are not in our control, there are quite a lot of things that are in our control.
In short: There’s opportunity in chaos.
The best thing you can do right now is to step back and prepare.
I don’t think its too far fetched at this point to say that we’re entering a bear market and a new global recession. The store owners that prepare themselves and their business for the coming downturn period and are consciously aware of it are the ones that will survive.
Commit to being present and knowing the facts, know what is happening in your industry.
There’s opportunity in the chaos if you have your eyes open and are attuned to it.
This Is Temporary – It’s Happened Before
Many news stations are spewing a constant diatribe of “end-of-the-world” articles, so you’d be forgiven for thinking that this is never going to end.
But it’s temporary, and we’ve seen this type of economic downturn caused by external events before. Sure, we haven’t experienced this version of events, but we know these things are not permanent and we will overcome it as a species and move on with our lives.
Cast your mind back to the last “big event” – the 2008 global financial meltdown.
In the wake of the 2008 housing disaster and the global recession that followed, many businesses were born and grew off the back of it.
The pattern of what happens after a global recession is usually a long period of rebuilding and entrepreneurship and growth. Once the initial storm has passed I’m confident that we’ll see this again.
And guess what? With entrepreneurship comes new stores and retailers and businesses.
I guarantee you, there are people out there right now sitting in self-isolation that are coming up with new retail business ideas. They’re going through courses, reading, learning and starting their businesses right now as you read this.
They see the opportunity to use the time wisely and build something.
On the flip side, those people will need things to sell. It’s an amazing time to be you.
They’re going to need your products on their shelves, so make sure you’re ready for the rush.
On a wholesale level, you are well-positioned as customers of Wholesale Suite to deliver wholesale to those smaller players who are just starting out.
There is opportunity in chaos.
- Prepare your mind, accept the situation and take ownership of what you have control over
- Realize that this is a temporary situation and that we will overcome it
- Know that there are people out there right now taking the first steps to build a new business
- You are well-positioned to give guidance to the new stores that will be born out of this
Have A Plan
The best advice I can give you as a store owner is to have a plan.
Instead of watching the news or reading about how there is a man in the next city that has coronavirus *gasp* refocus your energies into your business.
I suggest creating a plan that includes “triggers” and “actions”.
I found this idea from a video of Noah Kagan’s about winners and losers in the wake of this virus and the situation it’s creating and applied it to our niche as store owners.
The idea is that you define what your triggers are where you will take some sort of pre-determined action.
- What happens if you lose 20% of your weekly revenue? If you lose 40%? What about 60%?
Define the actions you would take at each of those points.
- Can you focus on retail for a while and boost that up instead?
- How about introducing new revenue streams to your business?
- Can you make a digital product? Vouchers or perhaps a course?
- What happens if 20% of your wholesale customers go bankrupt? What happens if 50% of them go bankrupt?
Define the action you could take at those points.
- Could you go back to actively recruiting wholesale customers?
- Can you do assistance packages and payment plans to help those people stay in business?
- Can you create a better experience for the ones who remain?
This is what some people call a “rainy day plan”. It’s about putting into perspective the things that are still in your control.
Have A Plan For Right Now Too
What can you do for your wholesale customers right now?
They’re hurting, probably more than you are because they are the ones with the retail storefronts, the buildings, the store fixtures and more.
Mark from Chunky who’s in our Store Owner Tips group has offered all his wholesale customers $500 of stock, delivered immediately but not payable until 2022. I think this is an excellent way to keep good graces and is a very generous thing to do.
Another in the group, Bryden from Queen Bee Beeswax Wraps heard that some retail stores are seeing a small bump so he quickly put in place a 20% off retail deal. He’s also looking at switching in some other revenue streams to make up for slower than normal sales; he’s selling the fabric he would normally use in the wraps on eBay and doing some honey production runs instead. It’s creative thinking at it’s best.
Dani from Petz Plaza (also a Store Owner Tips member) recommended offering customers vouchers that can be sent via email. Especially for shops where parcel deliveries are not possible at the moment (for example in Italy all parcel deliveries have been temporarily halted).
I like this idea because people will still be having birthdays, weddings, and various occasions they’ll need presents for. While it’s not a good time for deliveries (and for that matter birthday parties) digital WooCommerce gift cards are a great easy option and something store owners should consider making an offer to their audience for.
Lize from Botonopia who is also in the group kicked off the discussion with many great ideas that she’d brainstormed. I particularly liked her idea of offering drop-shipping services.
This is an easy additional revenue stream that has a short time to implement. It can also provide a lot of value for retail store owners with a more basic web presence. This is the kind of thing that you can promote to blog owners and content sites and other non-traditional wholesale customers as a way for them to expand their revenue while securing or bolstering your own.
The main point is, communicate with your customers (be the retail customers or wholesale customers or both!). Let them know you’re still around, that you’re doing your best to get deliveries out, give them a deal for purchasing ahead and do your best to reassure them that this is only a temporary situation.
Have A Plan To Welcome Back Customers
While you might be experiencing a quiet period, because we know that this is temporary, we know that eventually, the customers will return.
And when they do, it’s your job to get as many orders in and kick start the engine again.
You don’t need to profit lots at this point. The idea is to get people back to you to order again. The quicker they order, the quicker they’ll be selling and the more they’ll come back again and again as they see that things aren’t all doom and gloom.
It’s come up a few times already, so if you’re able to and have the margins to play with, try incentivizing people to order. There’s nothing quite like a temporary discount to stimulate orders.
Remember, it doesn’t have to be permanent, and it’s not a measure put in place to make a profit, you’re aiming to get people ordering again. So even if you don’t normally do it, maybe you can make an exception in this extenuating circumstance.
With that said, I know not every business has the luxury of large margins to be able to discount even further from the wholesale level, so if you’re not comfortable discounting, why not try a different approach?
Some ideas include:
- Giving bonus items unexpectedly
- Giving those who order free samples (that are actually sellable)
- Create better/longer payment terms
- Do ordering incentives/discounts but only when orders hit a certain size so you know you’re making a positive net margin
- Give discounts on shipping instead of discounts on your products. Shipping services will be looking to get people using their services again too so pass on any savings you manage to secure
- Focus on clearance items (things you want to shift anyway)
- If you do light manufacturing/assembly, can you sell parts of your products separately via different channels for a short time (just like Bryden is doing with his fabric and honey)
- Use buy one, get one style offers instead of straight discounts to ensure still make a good profit underneath but you are seen to be incentivizing customers
- Give a bonus if they re-order quickly within a certain amount of time after their first order
- Create store fixtures and marketing materials that you can give away with orders
- Create digital advertising materials that you can give to your wholesale customers to use to promote your products
Let’s Get Through This Together
Facing this kind of adversity alone is hard. You might have thoughts circling around in your head and can’t see the way out.
I highly encourage you to join our Store Owner Tips community on Facebook.
There are thousands of other store owners, just like you, going through this just like you are. Let’s support each other and give each other positive constructive ideas to weather the storm.