In business, some things you can control: your market, products, offers, messaging, design and branding, and more.
Most of our time as business owners is spent working on and thinking about these things. And usually, if you get them right, you’ll see increased sales and revenue.
And then there are the forces that we cannot control. The way you change, adapt, and react to these larger macroeconomic forces is no less important to your success.
Today, I want to take some time to talk about the three “macroeconomic” forces that I’m concerned about in 2020 – and why you should be too.
#1 The China Trade War
In 2018, President Trump began implementing tariffs on products and goods imported from China.
With China as the world’s largest exporter, and the U.S. the world’s largest importer, this has created massive problems for businesses that rely on Chinese supply chains.
And no matter what your political affiliation or stance on the issue, there’s no denying that this has created a lot of uncertainty about sourcing products from China.
Will this “Phase One” deal help? What will happen with the tariffs? Will the market shift significantly over the next 12 months?
Many businesses are already shifting their supply chains to other countries, or even back to the US, because with all the uncertainty it just doesn’t make sense to rely on China right now.
If you sell physical products, you’ve probably already been feeling the impacts of this in different ways.
I’ve also been getting a lot of questions from our students about what to do – and I’ve even had some students asking if it’s worth it to try to sell physical products, considering the trade war issues.
I have some alternatives I’ll be sharing at the end of this post, but first, let’s dive into the SECOND economic trend that’s stressing me out in 2020, and it’s…
#2 Amazon Taking Everyone’s Lunch
Amazon is taking over the world…or at least it feels that way.
Amazon sells more than 353 MILLION products…
And 55% of consumers begin their online shopping search on Amazon.
Alexa, the Kindle, and Amazon Prime have entered our lives in ways that it’s hard to imagine living without…
Which all adds up to the fact that Amazon has immense power – that it doesn’t always use for good.
There are 103 million Amazon Prime members in the US (almost ⅓ of the population!).
And there’s no question that Amazon has been a good opportunity for small businesses to reach more customers.
According to Amazon, it pays for small businesses to sell their products on Amazon.
Because as soon as Amazon figures out that you’re making any money at all, well…guess what?
Amazon is going to go and create their own branded version of your product, sell it for half the price, and put you out of business.
When you sell on Amazon, you’re building on quicksand.
And it’s not just small businesses, either.
Amazon is in the process of putting FedEx out of business.
Not only is it developing its own shipping solutions like Amazon Air, sidewalk delivery robots, and drones, but in December 2019 Amazon blocked third-party sellers from using FedEx to ship Prime packages, over concerns about performance and delivery time amid the crucial holiday shopping season.
FedEx, a $65.5 billion company, lost over $25 billion in market value after this happened.
In early January 2020, Amazon lifted the ban and FedEx’s stock rose again – demonstrating just how much power Amazon has over the market.
And its tentacles are spreading into many different industries, threatening companies like Costco, Etsy, Blue Apron (meal prep), and of course brick and mortar bookstores like Barnes and Noble.
And if it can knock those big companies out…imagine what it could do to your business.
Want to learn how to insulate your business in this year of uncertainty?
#3 Facebook Uncertainty
The third big trend that I’m worried about in 2020 is the uncertainty surrounding Facebook.
When I joined Facebook in college, I was 19 or 20 and it was brand new and cool.
Yet today, people under 30 are just NOT using Facebook. Over Thanksgiving I ran into a young man in a restaurant who was laughing at his parents for using Facebook. He was 28.
If your market is under 30…they may not be on Facebook at all – which means you need to find another lead gen and advertising solution.
Advertising on Facebook has also gotten a lot harder and more expensive. Arbitrary account shutdowns and ads being disapproved are happening more and more frequently. And once your ad account takes a hit it can be hard to recover.
The cost of ads has also skyrocketed in recent years – between the release of my best selling books ASK in 2015 and CHOOSE in 2019 the costs of lead generation on Facebook have more than doubled, and in some cases tripled.
Not only that, but 2020 is an election year in the US and Facebook has clearly stated that they will not limit ad spending for political campaigns, which means that you will be competing for attention against endlessly deep pockets.
All of this to say – if you’re relying on Facebook to advertise your business (both with organic reach and paid traffic), NOW is the time to find another solution.
So with all of this uncertainty
how do you insulate your business from the storm of changes and trends shaking the world in 2020?
Well, you find the smart people who have found a better way. And I’ve recently discovered a better way, by avoiding sourcing in China and selling on alternative channels (NOT Amazon) that are incredibly profitable, driving traffic that avoids relying on the whims of Facebook ads.
If you want to hear more about how to safeguard your business from these 3 stressful trends in 2020…