Ken Burke, founder and CEO of The EntrepreneurNOW! Network, is a speaker, serial entrepreneur, mentor, and author.
Ken founded MarketLive, a market-leading, enterprise class eCommerce software platform used by major merchants generating $2b in online sales through the platform.
He sold MarketLive to Vista Equity Partners in 2016. Ken authored the book, “Intelligent Selling: The Art and Science of Selling Online,” as well as hundreds of industry articles.
He earned his MBA in Entrepreneurship from the USC Marshall School of Business, which later awarded him the honor of Entrepreneur of the Year.
Business strategy during recession for Amazon & E-commerce
The economy is in the midst of its longest recession in a century. In this volatile time, it’s important that you have a strategy to stay viable as an Amazon and e-commerce business owner. Let’s take a look at some ways that you can keep your business moving forward during these uncertain times!
Ken Burke’s 2001 Dot.com Crash experience
Ken Burke was a serial entrepreneur with a background in technology. He started out selling computer hardware before moving onto software development, building his first company from the ground up. At the height of the dot com crash his company survived. What happened on the other side of the recession was much better: in 2003-06, they had their best season ever.
Europe and UK may face long-term recession or stagnation
The current recession is not simply a one-off event. It’s the beginning of a long period of stagnation, or even decline, for Europe and UK as well. The reason is simple: Gas is not only in short supply now, it will be for the foreseeable future because shale gas production has peaked out in US and no country outside of US has made any significant progress towards developing shale gas reserves.
Germany was the engine of European economy due to its large manufacturing sector which depended on cheap energy (gas) to be competitive globally. Germany’s industry accounted for 36% share of total industrial output globally in 2015, making it largest exporter among all European countries.
But that can’t continue as German manufacturing industry depends on cheap energy and Russia controls almost all gas supplies into Europe through Nord Stream pipeline and other pipelines through Eastern Europe. Nowadays gas prices have increased significantly due to sanctions imposed upon Russian Federation following annexation Crimea from Ukraine. Sadly there is little prospect of that changing. Even if Russia makes peace soon, its supplies will have been permanently damaged, or shut down.
Luckily there is an alternative, giant market of consumers which should be thriving…
How to play in Amazon USA, the most robust market
The medium-term economic future for the USA is much brighter than for Europe. The US has become self-sufficient in oil and natural gas. North America also has some of the healthiest demographics in any developed continent, with a combined population of over 500 million people. It has a continent-sized market in North America with NAFTA 2.0 with Mexico and Canada expected to boost trade even further (and hopefully end tariffs).
America is also retooling its factories at record speed, which is helping to generate jobs and investment at home rather than overseas as well as keep import costs low while boosting exports – all good news for eCommerce players like Amazon!
Taking over your market
The period towards the end of a recession can be a period where you get to take over the market. The main reason for this is because of the economy in general and how people react to it. When there is an economic downturn, many companies will either merge or go under completely because they cannot afford to stay in business anymore. This means that there is more room for new competitors who have been able to survive during this time and are looking for ways to make money back into their company’s pockets again.
What does this mean? It means that you have an opportunity! All those small businesses who have gone out of business will leave your competitor’s field open for you! You still need some sort of plan though before jumping on top of someone else’s territory; otherwise, it would be very difficult for anyone else besides yourself with all those empty stores around them waiting for someone like yourself who has been through bad times before (and knows how not only survive but thrive).
Watch your Cash like a hawk
The biggest mistake you can make is not having a plan. If you do, then the planning will take care of itself; if you don’t have a plan, then “planning” won’t happen and your company might go out of business.
So here’s what I recommend: project forward 6 months, assume that things are going to be worse than they are now, and start preparing for it now.
The best way to prepare for bad times is by cutting costs. This doesn’t mean laying off people or closing branches—those are last resorts—but rather it means being realistic about how much money needs to stay in the company so that it can survive through tough times. Don’t be afraid to cut losing products or services either; those things were probably losing money anyway and keeping them around just because they were profitable once upon a time might cost more than their value later on down the road when things get better again (and even if they don’t).
Cut early, Cut hard, Cut once
Do not wait until you are in trouble to cut costs, do it early. You can survive a month without paying employees and with no marketing but you cannot survive for more than that period of time.
Cut everything that is not essential to your survival. If it’s something that you’re spending money on, then someone else will be happy to benefit from this cost cutting exercise as well!
Cut costs in a smart way so that you can maintain your business and keep going even during tougher times – this could be by reducing salaries for the time being or even laying off staff (this might sound harsh but sometimes it’s necessary).
The upsides of a recession
In a recession, it is wise to cut down on costs. The first step towards that goal is finding out where the money is going. To do this, you will need a detailed report of your expenses for the last three months. You can get one by visiting this link:
This report will help you identify which areas are spending too much money and which are not consuming enough resources. Then make sure that those who are underutilizing their budgets receive an extra allocation from your budget!
If there is any excess capacity in service or goods production then these units should be closed down immediately so as not to incur losses from them later on when demand increases again after recession ends!
Above all be strategic
Above all, be strategic. Make sure you’re spending your cash wisely and don’t get carried away with business growth. Be careful with the cash flow because you never know what will happen in a recession. If there’s one thing we can learn from the past recessions, it’s that we need to be prepared for any situation that comes our way.
Don’t panic when things aren’t going smoothly and don’t overspend because money isn’t always available as easily as it was before. The best thing you can do is cut costs where necessary – even if it means downsizing or restructuring how your business works internally so it becomes more efficient and cost effective without losing value in quality or service delivery.”
The main takeaway from these lessons is to be strategic. When things get tough, you need to have a plan in place that will allow you to adapt and thrive. This is not the time for knee-jerk reactions or panic measures. Instead, take a step back and think about what changes could be made now that would help your company survive later on down the road
- [02:22:00] The Recession
- [04:42:00] When To Cut Your Loses
- [06:21:00] Surviving The Process
- [09:46:00] Playing in the US Market
- [11:34:00] Applying The Strategy
- [15:08:00] The Cycle of Recession
- [16:13:00] The One Affected The Most : Small Businesses
- [17:48:00] Covid And The Boom of Ecommerce
- [20:49:00] The Upside of Making Tough Decisions
- [25:41:00] Conclusion