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There is no denying that the current pandemic is keeping every business owners and employers on their toes. Not to mention that the world is experiencing the worst economic downturn since the great recession of 2008.
So if you are thinking of starting an online business, you might be looking for products that are recession-proof.
Skip forward to this time stamp if you want to get to the list. Otherwise, listen up, because understanding this might really help your business.
Think about the kind of companies that perform well in recessions. Utility companies do well. Tobacco, alcohol, fast food, and soft drinks do well. Consumer staple companies like Kimberly-Clark, Colgate-Palmolive, Procter & Gamble, and Johnson & Johnson do well.
In short, necessities and vices don’t suffer when recessions come. This may sound like bad news since many consumer products sold online are luxuries purchased with discretionary income. But it’s not: and there’s a simple principle at work behind the changes in consumer behavior during a recession.
Cheaper products perform better in a recession.
I know. I know. But it’s worth saying because it helps us understand some important second-order effects.
Think about it: if you sell something inexpensive, such as Hershey’s Kiss chocolates, you might benefit from the economic downturn. A Big Mac is a lot cheaper than dinner night at a fancy sit-down restaurant. Camping is cheaper than a lavish vacation. Repairing a car is cheaper than buying a new one.
That means a recession actually opens up a ton of new business opportunities, if you know where to look. And best of all – many of them are genuinely helpful!
Recession-proof products are those that never go out of style whether the economy is good or bad. And according to Brandon Rollins, necessities and vices tend to do well during a recession.
Here’s the thing: Consumer behavior changes during trying times. Hence, it is important to take demand and cost into consideration when thinking of what products you can sell online.
That said, here are 10 recession-proof products that you might want to try:
In case you have not noticed, people will secure consumer staples during a recession.
Hence, selling these kinds of products could be one of your safest bet if you want to start an online business. The six basic categories of consumer staples are:
A parent will always keep the welfare of his or her children in mind, regardless of current economic status. Not to mention that a baby’s needs will remain constant whether or not there is a pandemic.
This explains why moms and dads would look for ways to purchase baby products like diapers, formula milk, baby clothes, shampoo and soap for baby, and more.
Simply put, baby products are another recession-proof product that you can sell online.
Other than consumer staples, beverages are also important for people. Mind you, there are people who cannot seem to start their day without having their caffeine fix.
Sure, coffee shops might be struggling during a recession. Moreso now that not every cafe and restaurant is allowed to accept dine-in customers. But that does not mean that people have stopped purchasing coffee, tea, or energy drinks.
Aside from food and beverage, clothing is another one of the bare necessities that we cannot let go of. More so during a pandemic or recession.
People would still wear clothes, and they would want to replace their old ones. Not to mention that clothes could come in handy if you want to raise funds for your chosen charity in these trying times.
So if you are selling clothes online, rest assured that you are less likely to be affected by the recession.
Aside from ourselves, family, and friends, we also value our pets. It is not just because we treat our pets as our babies, but because they are living, breathing creatures that deserve love and care.
However, it is possible that the pet grooming station near you is close at the moment. So the next best thing is to groom your pet(s) yourself. This is where an online store for pet care products could come in handy.
The need to take care of our furbabies are less likely to cease despite the recession. So, if you love animals or have a pet of your own, you might want to consider opening an e-commerce pet care store.
According to The NPD Group, the average weekly Netflix usage increased to 72% in the US since the COVID-19 pandemic began. In addition, DVD and Blu-ray Disc sales in regions with a high number of positive COVID-19 cases also skyrocketed.
This is not surprising, as we would want to get entertained, especially now that we are asked to stay home and self-isolate for our health and safety.
This explains why affordable entertainment is in-demand even when the economy is struggling. Hence, entertainment products like movies for rent, video games, and DVDs, is another recession-proof product that you might want to sell.
Do you know what people commonly do when they are stressed? They reach out and munch on something sweet. In fact, during the 2008 recession, Cadbury and Nestle’s sales went up by 30% and 11% respectively.
Hence, you might also want to consider selling artisan candies online.
The best part? Candies are lightweight and easy to ship so it will not be much of an issue when it comes to e-commerce fulfillment.
Aside from people craving for sweet and wanting their caffeine fix, the desire to look good does not wane even during a recession.
However, people would rather focus on using cosmetics rather than get an extreme makeover or update their wardrobe. After all, this is the best people can afford at the moment.
But does it makes sense for people to buy cosmetic products during trying times? Apparently, it does.
There’s is a thing called the lipstick effect. And according to a study, people will opt to buy expensive lipstick during a recession than a fur coat.
Just because we are encouraged to self-isolate due to the current pandemic does not mean we should miss the outdoors.
Sure, you may have travel restraints when it comes to crossing from one state to another. But when the stress of recession takes a toll on you, you can still get away from it all through indoor camping.
Hence, you might want to consider selling camping gear online. This includes tents, sleeping bags, camping stoves, and more.
Unlike camping wherein you tend to purchase new gear, it is the opposite when it comes to automotive parts.
During a recession, when money can be challenging to come by, it only makes sense that you cross out that sports car from your bucket list for now. Instead, you might opt to repair your old, but still functioning, car.
After all, you may not be allowed to be out-of-state at the moment. So might as well as fix that one thing that can help you go around the city.
When you’re a parent, you have to take care of your child no matter what. For that reason, baby products – clothing, diapers, formula, and so on – continue to outperform the market as a whole. This is also true for daycare/childcare services, whose work increases when the economy turns sour and parents return to the workplace. (With the exception of the pandemic-driven 2020 recession, of course!)
If I could sum up the economic outlook of kid products in one statistic, it would be this: spending on children’s nonfiction books grew 66% in 2020.
Food and drink continue to be essentials during economic downturns. You may think that consumers turn to rice, potatoes, and tap water when money is tight, but this isn’t always this case! Many times, luxury food and drink products perform well for a few reasons:
That’s surprisingly good news for business owners who specialize in trendy products like organic flaxseed, hemp, and chia kombucha.
Recessions and pandemic do not discriminate as it can pose a challenge to everyone. Nonetheless, these are not death sentences.
Whether you have been running your business for years now or you are thinking of starting an online business in order to ease the financial burden brought on by an economic downturn, the key is in providing necessary products and services.
Doing so can help you survive the recession, as well as help your local economy stay afloat.