The price of gas is changing how people buy. The higher the price of gas, the more expensive everything else is. This is reducing people’s disposable income dramatically. People are less likely to give into impulse buys; they want to feel they are getting great value for their money. They are less likely to buy something just because it is there and it catches their attention.
People are buying less luxury items, such as jewelry and purchasing necessities instead. Buying over the Internet is also down as the cost of shipping is up. Why buy something that has to be shipped when you can find a similar product at a local shopping mall and don’t have to pay for shipping. Just because an item seems to be a deal online does not mean it is once you include shipping and handling charges.
So how we market product has to change. You have to concentrate on the perceived value of the item, or that it is cheaper to buy from you then the local store even with shipping charges. Some places are even covering the cost of shipping. With fewer dollars available the competition for those dollars is becoming even more intense. I am quite sure that some small businesses and some big ones are not going to be able to survive for very long unless things change.
So the real question is how do we stay in business with a reduction in sales? For us it will be by cutting costs wherever we can. We are offering several different shipping options so people can get the one that fits their budget. We are reducing the amount of packaging that goes with products to reduce shipping cost. We are not purchasing any manufactured products for our inventory. Other then what we already had to put onto the website we are only adding our own handcrafted pieces to the website inventory. That is about all we can do. We don’t have staff to let go, other then ourselves. But until we make more sales we are not paying ourselves. It is going to be hard and our ability to stay in business will depend on how long this goes on for. We will be fine for at least a year. Hopefully things will be better by then.