A Survival Guide for eCommerce Businesses in 2020
It’s pretty clear at this point that a recession is on its way. Businesses are being forced to close and a lot of them won’t survive the downtime. Layoffs are well underway. There’s not a single market in the United States or around the world that isn’t being affected by this heinous new strand of the coronavirus. If you haven’t prepared your business for this type of emergency, now is the time. Fortunately for eCommerce businesses, we’re uniquely positioned to not only avoid a lot of the devastation but possibly even thrive throughout this ordeal.
What is Covid-19?
This might seem like a silly question, but if we consider that the general public response has been to stockpile toilet paper, I think you can humor me while I address some of the idiocy we’ve been witnessing.
Covid-19 is a new strain of the coronavirus. It is not the common cold. I know some genius found out the common cold is also a type of coronavirus and decided to tell everyone the government is trying to steal your chickens or whatever… but this is not the same thing. Covid-19 is more infectious than the flu, is a novel virus with no vaccine, has a long incubation period, and causes severe respiratory symptoms that can lead to pneumonia and kidney failure.
The symptoms of Covid-19 are cough, fever, and shortness of breath. Not everyone who has it is going to show symptoms and not everyone showing symptoms will show these symptoms. Many confirmed cases don’t involve fever at all. Some have been experiencing chills, fatigue, and other flu-like symptoms. For everyone under 40, it’s a lot like a cold or flu and has a comparable fatality rate.
For those over 40, the death rate starts to climb from around .2% to more than 20%. The elderly are at high risk, which is why countries around the world are closing businesses, banning events and gatherings, and enforcing quarantines. These precautions, though necessary, are going to have a huge impact on the economy and we should all be getting ready yesterday.
Panic at the Costco
As recently as November 2019, USA Today was predicting a non-stop stock market climb up to election day, but on March 9th, 12th, and 16th, we experienced the three worst point drops in US history. The imminent recession, the looming plague, and the oil war that’s driving crude prices down to their lowest point since the early 2000s are triggering everyone’s flight response.
In preparation for martial law, quarantine, and job loss, many families are “panic-shopping” (hence the toilet paper shortage). The CDC recommends maintaining a one-month supply of food and essentials, but it seems to be human nature to lose your ever-loving mind and sell off all your stocks to buy enough hand sanitizer to last several years because we’re all still touching our faces.
The CDC has also recommended that we avoid crowds of more than 50 persons, which is getting mixed responses. While we shut down events, worship, and even school, we’re still flocking to the grocery store in droves. The psychological element of Covid-19 is so unpredictable and severe at this point, I’m hesitant to dismiss any fearful predictions about the coming months, no matter how unlikely.
Covid-19’s Effect on Your Business
Due to the international nature of eCommerce and the large reliance on China, we were one of the first industries to take a hit from Covid-19. The impact so far has been a bit scary, if I’m honest. At least once a day I think, “Will I still have a job in this recession?” But it looks like eCommerce might come out ahead in the end just by being the incredible network of convenience it always has been.
The most obvious issue for online retailers right now is restocking inventory. A lot of us have been cut off from our suppliers completely. Manufacturing plants have been sitting idle due to worker illness or quarantine in major epicenters of trade. Now that China is coming back online and Europe has become the focal point of the corona outbreak, the issue in reestablishing supplies is in transportation from factories to Chinese ports, which is expected to continue being an issue for the next several months.
But don’t fret, eCommerce entrepreneur. While your inventory may be shriveled, your audience is certainly growing. Quarantine, martial law, fear, and the shutting down of local businesses means people are staying home. Even 27% of the panic shoppers reported they would be avoiding shopping centers, and that figure climbs to more than 70% when the outbreak hits the respondents’ areas. That means you’re going to have an entire planet of consumers sitting at home glued to their electronic devices.
How to Take Advantage of Other People’s Misfortune
This year is going to be one for the record books, but you can keep yourself and your family afloat if you have -or can make- a decent online storefront.
1. Diversify Your Suppliers
Step one is your inventory. There’s never been a better time to diversify your manufacturers and distributors. Have a backup, even if you don’t need it right now. If your products or materials don’t allow for such diversification, stockpile enough to get you through if something happens to your facilities or supply lines.
2. Diversify Your Top Sellers
Make sure your revenue isn’t dependent on too few products. Take a look at your top three sellers. If those products were suddenly unavailable for several months, would your business survive? If not, you need to introduce new products or promote some existing products that are acquired through different suppliers, preferably in a different country if you purchase internationally. Not only will this protect you in case of an emergency, but it can significantly improve your bottom line in the meantime.
3. Optimize Your Storefront
The competition is about to get pretty tough. Existing online retailers are going to buckle down and get serious for this recession and a lot of brick-and-mortar retailers are going to be forced to open up shop in your domain. Get your storefront looking good and converting well. Usability, clarity, and good copy are going to be your best friends here.
4. Maintain Fair Pricing
For the love of dog, do not price-gouge. It might make you a quick buck during the panic phase, but it makes you look like a total POS and any customer you gain will not stick with you because you suck. Maintain fair pricing for what you’re selling. If you catch a break on shipping prices because of oil being so low, pass the savings on to your customer base. It’s a recession. You’re not the only one hurting. Be a decent person and your business will be rewarded. (Shoutout to HEB for donating $3 million to community support during this crisis.)
5. Record Your Processes
If you’re the only one who can do your job, what happens if you can no longer do it? Anything you do repeatedly needs to be written down in the event you fall ill. Write it as if you’re writing instructions for a stranger to stand in for you. Write down each process separately and make the instructions as easy to follow as possible.
6. Keep Your Employees
As much as is possible, avoid losing employees to layoffs and illness. Modify your policies to allow valued employees to stay home when they’re ill without being punished. Discuss pay cuts, scheduling, and other alternatives to corporate downsizing. This will allow you to bounce back faster and will save your employees from being jobless in the coming economy.
Live Happily Ever After
Okay, let’s be real. This year is going to be hard for everyone. If the effects are still lingering when the holiday season comes around, we’re in for a rough 2021, too. You can help your business survive by getting online or by optimizing your existing online presence. Take a break from social media and check the CDC’s recommendations for staying healthy, while you’re at it. And for f*ck’s sake, stop buying toilet paper. Good luck, everyone.