Home Business Selling a non-essential product at a time when people are tightening their financial belts.

Selling a non-essential product at a time when people are tightening their financial belts.

by uma
gawdo

 

Many small businesses who sell non-essential goods are looking at the looming global price rises and increase in minimum wage costs with a great deal of fear and trepidation this spring.

And for many, it looks like while they may have clung on with their fingernails during the pandemic, lasting out 2022 will be quite another story.

Even small businesses who managed to pivot rapidly during the pandemic are looking at the future with concern.

“We diversified in 2020.” Said Female Entrepreneur Jo Smedley, who runs one of the many small businesses who are watching the increasing costs. 

“Knowing how much our customers were struggling financially in lockdown we kept our prices static throughout the pandemic, but we’re going to be forced to increase prices this year to cope with the rising minimum wage costs, and increasing costs our suppliers are passing on to us.”

“When everyone is tightening their belts and suffering financially, I worry that all non-essential businesses will find themselves hit really hard this time around.”

Jo Smedley told us her business launched during the recession.  “We were one of the first murder mystery firms to set up on-line back in 2007.  Taking advantage of the recession to grow our business as people started entertaining at home, instead of spending their money going out.”

“But this time around it’s very different.  Many of our customers have lost their jobs during the pandemic, then been hit by rising fuel and food prices.  It’s all very well reducing that “eat out” spending, but for many people they can’t afford to entertain ‘in’ now either.”

Murder mystery games won’t be the only small business worrying about the future, with florists, and gift suppliers all watching their business outgoings with trepidation.

“The key will be in collaboration this year.”  Said Jo Smedley.  “The customers are out there, but the challenge is finding the right people who want to buy your product.  If small businesses can work together, then we can get through this together. ”

Jo Smedley’s firm Red Herring Games has always worked in partnership with other small businesses, creating cross promotion for goods and services as the opportunities arise.

“Sometimes you just need to think outside the box.”  Said Jo Smedley.  “It’s never about what you know, and it’s always about who you know in business.  You can be the best in your field, but if no one knows about you, you won’t sell anything.  Just like a pro-footballer never wins a match by himself, small business owners need to find a supporting team to create that win.”

Jo’s top tips for small business cross promotion:

Find someone selling goods or services that parallel your own.  If you sell food, find someone who sells drink.  You both have similar clients.  If you’re selling candles, find someone else who sells bath bombs.  Because of GDPR you can’t swap customer lists, but you can certainly help each other reach those lists.

Have a coffee together either face to face or via zoom and share ideas and connections.  Many small businesses are selling on different market sites, or at different markets, or on shelves in craft stores, or through retailers you might not have a direct contact for.  By sharing information you can avoid costly mistakes, and also find some real gems that will help you find stockists as well as customers.

Avoid discounts.  Think about upsells instead.  Discounts cost you far more than you think.  So unless your supplier is discounting and you can pass that cost saving on, don’t discount.  If someone is interested in your product or service, they’ll probably buy it.  All you’ve done by discounting is cheapen your product and lost yourself some money.

Think about creating great offers that each other’s businesses can share with their customers.  Some business owners are happy to earn a commission on sales, others are happy just to have a quid pro quo, you send to your list, I’ll send to mine.

Use Email, Social Media and mail order flyers to reach new customers.  We often send out other businesses flyers with our mail order.  It doesn’t cost us any extra to do so we’re happy to add them in.

Consider creating a banded pack deal together or creating a drop ship arrangement with similar providers, so that you can sell their products on your site and vice versa.  Again this creates a win:win for both parties. 

www.gawdo.com

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