How Your E-Commerce Business Can Survive Stagflation

February 12, 2021
7 min read
Ecommerce Surviving Stagflation

It seems inevitable. Some 77% of investment fund managers agree it’s coming this year and if you’re involved in retail business you’ve probably seen it affect your bottom line this quarter. The past two years have concocted a sour recipe: pandemic, lockdowns, layoffs, money printing, panic-buying, shortages, more money printing, and a full blown war in Europe. Gas is up, shipping is up, raw materials are up. Then things got wacky and seemed eerily good for some time. Online spending rose to an all time high and you may have profited from it. But the truth is e-commerce saw an artificial boom caused by bored people buying dog toys with government cheese. Fast forward to Q1, 2022, Shopify missed earnings and Amazon is talking about scaling back to cope with their overzealous 2021 expansion.

Slow economic growth and rapid inflation — stagflation, the dreaded word. What does all this mean for your Shopify or Amazon business? Are people still going to impulse purchase your meme hats after spending $70 to fill up their Hyundai? It’s getting tough, but tough times make tough people. Let’s break down a few things you can do now to help your e-commerce business survive (and maybe even thrive) during stagflation.


Let’s start at the most basic cost-cutting level. Every dollar of cost of goods sold impacts your margin. The good news is manufacturers in China and elsewhere have probably over-expanded too with the e-commerce boom of 2021. They’ve been pumping out tons of rubber duckies and cellphone cases to keep up with demand. You may have started out with the most convenient manufacturer you would find on Alibaba several years ago when things were normal. Chances are there are hundreds of manufacturers who would be happy to steal you as a customer. Do some research and get some quotes. You could take a quote back to your current manufacturer to work out a deal.

Shipping prices have started settling too now that jobs at ports are filling up again. The shipping container disaster is fading and unemployment is down to 3.6% as people get back to work so they can afford the basic cost of living. Try shopping around for a new shipping agent or even calling FedEx or DHL yourself. You may be surprised how much you can save on shipping today.

Focus on Branding

With everyone jumping on the e-commerce bandwagon, digital ads have become highly competitive. Advertising on Instagram, YouTube, and Tik Tok isn’t as straightforward as it used to be a few years ago. Branding will be the biggest differentiator in e-commerce marketing this year. A trustworthy, recognizable brand is worth a lot more than a click. Create a story around your product. Creativity has no direct monetary value and its ROI is difficult to calculate. However, you can write a thousand words about your company for free and take a picture too. With PPC campaigns, the only thing keeping them afloat is money. Branding is the gift that keeps on giving. Make your product feel good and your customers will thank you.

Expand Your Product Line

It might feel counterintuitive to expand anything when people are buying less and costs are rising. But think about how little it costs to add a new SKU to your product line. Get a few samples with your logo slapped on them, put them on your Shopify store or make a listing on Amazon, and see what happens. Focus on essential goods, things that people will always be willing to spend money on. Shampoo, toothbrushes, socks, etc. Go through your daily routine. You’ll be surprised how many little things you have in your life that you couldn’t live without.

Keep Calm and Carry On

The economy is fluid. You can affect it as much as it can affect you. You might not be able to control a government’s decision or a viruses’ mutation, but you can control your reaction to it. Be smart and tighten up where you need to. But keep your eyes open because when every chicken is running around without a head, there is a lot of overlooked opportunity you can peck at.

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