Note: Here are some timely tips for entrepreneurs on surviving economic rough patches from a guest blogger who knows from experience, Aaron Rome of Wholesale Gem Shop, a worldwide wholesale jewelry supplier.
How Small Business Stays Successful in a Down Economy
By Aaron Rome
Wholesale Sterling Silver Gemstone Jewelry
Your business can survive an economic downturn. And, I can support that claim. We are not sliding into financial Armageddon. I know that from my own business experience because people are still buying wholesale jewelry.
I’m a realist. Like everyone else, I feel some anxiety about the state of our world economy. (Certainly, I share in the disdain for those who irresponsibly pushed world credit and financial markets to this edge.) But I temper those feelings with a practical optimistic outlook. I know that, with the right strategies, our businesses can come out of this even stronger.
Is My Business Doomed By a Bad Economy? The answer is a qualified, “No, not if I make smart business decisions.”
In the past year, my wholesale business has declined 11%; over the past four months, it has dropped 23%. While this is a concern, to be honest, I am only shocked it’s not worse! If I could not make my mortgage payments and was forced to choose between food and gas, then, sure, wholesale silver jewelry would not be high on my shopping list.
I don’t know the motivations and root causes; but I do know there are still a lot of people buying jewelry. I have approximately 2000 customers worldwide. And the feedback I am getting overall is that retail jewelry sales have fallen, though not as dramatically as some expected. Some sectors are even reporting growth: For example, some of my customers who sell at home jewelry parties and small craft shows report that business is booming. At the same time, more traditional outlets (retail stores, mall kiosks) are seeing declining sales.
My theory is that purchase decisions, even during rough economic times, come down to buyers searching for value.
How Can I Sustain or Even Grow My Business in This Economic Climate?
Whether your business is your primary livelihood or a means of supplementary income, you want to not only survive this economic stretch, but to emerge stronger. Expect tough times to last at least six months to a year.
Save and Avoid Over-Leveraging: Savings can be cash or merchandise inventory. Be wary of over-leveraging yourself; too much debt could wipe you out if sales revenues slip too far. If you have some inventory built up, then you can spend less over the next six months working off your existing stock. Overall sales may be lower, but so will your expenses, netting a better cash flow.
Keep Cash On Hand and Inventory at Minimum: Make smaller and more frequent orders from your vendors. I now offer free shipping on orders over US $59.00 ($150 on international orders). This allows me to keep more cash on hand and hold my inventory to a minimum level.
Focus on No- and Low-Price Points: Don’t stop marketing your business; but take advantage of no-cost wholesaler services, such as directory listings. No-cost promotional features of my wholesale jewelry supply business include customizable catalogs, a virtual web site and picture downloads.
Stock up on products with low price points. I find that jewelry items retailing in the range of $10-$30 sell best during tough times. If you look through my wholesale jewelry site (at above link), you will find a lot of wholesale dangle earrings for $7; post earrings for $4.79; studs that cost only $1/ pair; and gem-chip bracelets at competitive low prices.
Keep Marketing and Test What Works Best: We know many will go out of business in the coming year. Survivors will be those that adapted to a new economic climate. So it is imperative that you be creative – try new stuff! – and keep refining your marketing to develop new business. Unless you have 100% market share in your region or sector, there’s always new business to grab, including from competitors.
An example of the need to keep experimenting: I do all my advertising online. My wholesale jewelry business currently appears on page 2 of Google search results for my keywords. Problem is that I used to be on page 1 of search results. Something dropped my keyword rankings; and that lower visibility is costing me a lot of business. So I am always trying new ways to get my ranking back up. (See Editor Note below for SEO Tips to improve search rankings.) If I get back to page #1 in searches on my business keywords, I will gain a lot of market share … even if overall business is slower in the wholesale silver jewelry market. Most of those new ways to regain my page 1 ranking cost me nothing beyond my time and creative tests.
As a (still) successful wholesale supplier of silver jewelry, my final advice is to keep trying new marketing strategies. Even if only one or two of your efforts is successful, you will be in good shape to weather the down times. (AR)
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Editor: For tips on Search Engine Optimization – those low and no-cost tips to make your business more visible to search engines or to rank higher on search results pages — see these Top Ten Wholesale News articles: Gain Visibility in Buyer/Seller Markets With SEO and Beyond the Basics in SEO .
