Buying Your First Online Business? Crisis Creates Opportunity by Website Properties

Two men extending arms across a desk shaking hands. Laptop, calculator, pens, clip board on top of desk with a blurred window as background.

With the current news cycle featuring a constant stream of economic – and existential – doom and gloom due to the unprecedented scale of the Coronavirus pandemic, the idea of entering the world of online business might be farthest from your mind.

But the fact of the matter is that there has probably never been a better time to explore starting or buying an online business.

Crisis Creates Opportunity: Though we are likely only seeing the very tip of this current crisis, an astute buyer can begin to read the ‘signal’ that is starting to emerge from the Coronavirus ‘noise’ out there.

Among other things, it seems as though governments are moving quickly to inject previously unimaginable amounts of stimulus into their economies. Not only that, but this money is being spread across a broad swath of the economy: from individual consumers to major companies. Along with this, it seems as though borrowing rates are likely to drop to historic levels as the government encourages financial institutions to stimulate spending and job creation. Inexpensive borrowing rates combined with an influx of cash across consumer categories means that this can be a better time than ever for a well-positioned foray into the eCommerce landscape.

Pandemics Shift Perspectives: Any person forced to spend their days isolated at home – and let’s face it, that’s most of us – has probably noticed the sheer amount of delivery trucks that continue to course through our streets, delivering goods to ourselves and our neighbors. Though people may be shopping online more than ever right now out of sheer necessity, it’s likely that exposure to the online shopping experience will create a lasting impression on consumers previously uninitiated to it.

Even as the cause for this shift to online spending will eventually fade, those customer habits will undoubtedly hold steady for a significant portion of the spending public. The result? A huge segment of the consumer population will discover online shopping, and those that already bought consistently online will have discovered new product segments, services, and experiences on which to spend their money. This kind of growth expected across the entire industry means that interested buyers can explore multiple businesses across product categories knowing that growth is likely to be quite broad.

New Markets Will Emerge: To those that shop online quite a bit, it can seem surprising to note that eCommerce represented just 16% of US consumer spending in 2019 (US Dept. of Commerce). The fact of the matter is that among people that shop online, they tend to stick to categories they’ve developed a level of comfort with (apparel, household staples, groceries), which limits their overall spending. Despite strong growth in online shopping, for many, online shopping is seen as a riskier or sub-par experience compared to traditional brick-and-mortar options.

As this crisis extends week after week, it is likely that many consumers will begin to increase their online spending habits across categories that are not immediately tied to the pandemic. While groceries have seen an enormous spike in online sales for obvious reasons, other markets like apparel, and home supply/renovation are beginning to see sales increases online as people become more accustomed to eCommerce being their ‘new normal’.

Some Things Will Never Change: With a huge portion of the world living in a way that we haven’t seen since wartime; it’s tempting to try and expose opportunities unique to this particular situation and this particular time. Anyone watching the news has heard the stories of Amazon sellers who are left stuck with thousands of essential supplies like hand sanitizers and masks after their businesses were shut down for price gouging. Though certain businesses and products on the periphery of this crisis might see unprecedented growth, the fact of the matter is that chasing trends in the interest of short-term gain is unlikely to yield positive economic results in the long-run.

For an individual looking to get into their first online business, the ‘value’ presented by this current crisis will be attached to the larger shifts in consumer shopping habits mentioned above. Despite being forced into the experience of online shopping due to this crisis, it is more than likely that many consumers will take this ‘crash course’ in shifting their consumer spendingand shopping habits and turn it into their everyday approach once the major effects on daily life begin to ease.

Ultimately, solid businesses in strong markets with proven track records of sales will still – and always – be the best bet for those looking to get into eCommerce. Though it may be tempting to get caught-up in fast-moving markets tied – even tangentially – to the pandemic, the smart investor knows that this is going to come to an end and that strong fundamentals will win the day. When it comes to this crisis, the true gains are to be had in long-term shifts in consumer habits as people are increasingly exposed to the experience of online shopping. The crisis has triggered an unprecedented and broad adoption of eCommerce as the primary method for consumer spending, and though eventually people will return to traditional brick and mortar for some items, the eCommerce genie is out of the bottle, and can never be put back in.