Is there going to be a recession in 2022, and how will dropshipping be affected in general if there is a dropdown?
The numbers of inflation, crypto market dropdown, and stock market dropdown cause a lot of panic: a lot of businesses are shutting down their doors and people starting to save more and spend less.
If you are already in business or just started your way – it means that you need to be prepared, because nobody clearly knows what happens when a recession would start.
Hopefully, dropshipping is a booming industry. With so many people shopping online, it’s no reason that the whole industry just stops one day. However, the factor of the recession may limit its growth.
Read on to know how your business can leverage future changes to take your e-commerce strategy to the next level!
As I see it, some niches could die off. The reason is very simple: people now are going to start thinking about where to spend their money, how much to spend, maybe to save it… Maybe it is not necessary to get this kind of watch or go on another vacation. People start thinking twice before purchasing anything. And that’s an important point.
Now dropshippers need to start focusing on the right products with the right angles. During these times it could be the products useful for people at home, or goods that could help at work, or must-have for the kids.
Healthcare products – anything related to health is super important. People are always going to be thinking about their health.
Entertainment products – when the recession is going on, people will be thinking twice before spending money in bars, malls, or going out with friends, or buddies. Instead of that, they prefer to stay at home to save money. And what do they need to do? They must have some entertainment at home.
Home appliances – cleaning stuff, anything related to taking care of the house, things that could help to improve it, or refresh… Because people will start saving on the cleaning services and doing them by themselves.
Being in the industry, we can predict that the average order value will drop. And that is why you must have a lot of ideas and brainstorm about what kind of offers going to work well for a product during the hard economic time. People who were spending on average $100+ in 1 order before are going to spend only $50-60 because they would try to save their money.
Please note, that it is not enough to have only a good product, you need to work on the added value of goods that you sell. Think about promo, related stuff to sell, and more efficient advertisements that catch your customers’ attention from the social media news feed.
Another good option to use in your store is “Buy now, pay later”. That’s the perfect solution during hard times. It will improve dramatically your results and your revenue. You can use Klarna if you work on the European market, or AfterPay for the American market. There’s even Shopify already prepared the same option “Buy now — pay later”.
Learn how to use the option “Buy now — pay later” even when you have delayed shipping from your’s store. The video provides more examples and covers the subject in depth.