Recessions are a looming threat for many businesses. But that doesn’t mean you should be all doom and gloom. After all, opportunity presents itself when your competition gets stuck in a scarcity mindset. And one of the best businesses to start during a recession is a nutrition or health & beauty brand.
We’ll explore the why behind the coming recession, why and how nutrition brands can weather this economic storm, and how a third-party logistics provider (3PL) can help you get the upper hand during this economic downturn.
The Coming Recession: What You Should Know
It’s no secret a recession is on the horizon. Many experts predict the first rumblings and disruptions to really hit in late 2023 or early 2024. Whether deep or shallow, most businesses will feel the reverberations on a cross-industry scale.
This recession — caused by a combination of factors, including the end of government stimulus measures, rising interest rates, and increasing inflation — means businesses will need to adjust their “business as usual” disposition.
This means taking a closer look at your costs, identifying areas of inefficiency, and looking for ways to diversify your product offerings. You also want to keep an eye on consumer spending during a recession and adjust your pricing (when and where possible) and marketing strategies accordingly.
During a recession, consumers are more likely to conserve than consume. Businesses in the nutrition and health & beauty industries should be prepared to adapt to these changes. One way to do this is to emphasize the value of your products through custom branding and personalization. Companies like Gainful and Clove excel at this.
Consumers Won’t Part with Health & Beauty — Even in a Recession
While consumers become more cost-conscious during a recession, they won’t part with the necessities. And as a nutrition or health & beauty brand, you fall into the “essential” category for a majority of consumers.
The benefit of starting or scaling a nutrition or health & beauty brand during a recession is that your products provide a sense of normalcy and self-care in uncertain times. Your brand offers comfort in the midst of the chaos.
Nutrition, Health & Beauty: The Best Businesses During a Recession?
As a comfort and care brand, your business boasts a competitive advantage when financial uncertainty presents itself. Why? The difference comes down to “wants” vs. “needs”.
Sure, some health and beauty products fall into the “luxury” category — a line item typically cut from consumer budgets during a recession — but many products under the nutrition and health & beauty space fall under the “essentials” categories for consumers.
For instance, women’s hygiene products like tampons are absolutely essential, but face wash, shampoo and conditioner, and nutraceuticals like vitamins and probiotics are also viewed as essential by many consumers. All of this makes verticals like nutrition, health & beauty some of the best businesses to start during a recession.
How to Survive a Recession in Business
Just because your business offers products and services that can withstand a recession doesn’t mean every individual business in an essential industry will survive. A few tips on how to navigate and scale your business in the midst of a recession include the following:
- Focus on cost-cutting measures. One of the most effective ways to maintain growth during a recession is to focus on cost-cutting measures. This can be achieved by identifying areas where costs can be reduced, such as renegotiating vendor contracts or getting cheaper shipping costs.
- Tap into new customer segments with new products. Another strategy to consider is diversifying your product or service offering. For instance, if you’re a nutraceutical company offering vitamins and supplements, you could consider adding dietary aids, skin care products, energy bars, and energy drinks to your lineup.
- Prioritize customer service. Excellent customer service never goes out of style. By going above and beyond, you create loyal customers who are more likely to continue doing business with you, even during tough economic times. One way to increase customer satisfaction? Consider outsourcing your fulfillment to offer quicker delivery times and seamless returns management.
- Focus on innovation. During a recession, it’s important to keep an eye on new technologies and market trends that can help your business grow. By embracing innovation, you can create new revenue streams, gain a competitive edge, and build brand loyalty.
- Look for partnership opportunities. Collaborating with other businesses can help you to expand your reach, tap into new markets, and increase your revenue. By finding the right partner, you leverage their strengths and resources to grow your business.
- Outsource logistics. The increased flexibility and efficiency of finding the right fulfillment will improve your overall service levels, and serve as the foundation for all of the points mentioned above. Finding the right 3PL will help you cut down delivery costs, better manage inventory, and stay up-to-date on potential supply chain disruptions during a recession.
A recession may slow down the growth of a business, but it doesn’t mean growth is impossible. This brings us to our next point: why a 3PL is important for your business during a recession.
Why Use a 3PL? 3 Reasons Your Nutrition or Beauty Brand Should Outsource Fulfillment
From a high-level overview, a 3PL can help your nutrition brand grow during a recession by taking on the responsibilities of managing your warehouse, shipping, and distribution.
Partnering with a 3PL frees up valuable time and resources for you to focus on growing your business and reaching more customers. Below are three ways a 3PL can help your nutrition or health & beauty brand.
#1 Improved Efficiency
An experienced 3PL provider is able to continually make adjustments and improvements to each step in the supply chain. They’re aware of what’s going on in the industry, and they know how disruption could affect your business since they’ve worked with many other brands in your industry before.
A 3PL will also have the expertise, tools, and technology available to restructure the supply chain and ensure the proper amount of goods arrive when and where you need them. Overall, they know how to manage front-to-back fulfillment in the most efficient manner possible.
#2 Outsourcing Saves You Time (and Money)
Using a 3PL can completely eliminate your need to invest in warehouse space, technology, transportation, and employees to carry out logistics processes. This gives you the mental, physical, and financial freedom to focus on your core competencies.
3PL providers can also make businesses proactively aware of supply chain mistakes and disruptions that could be costly and risky. At Jay Group, our industry forecasting abilities help our clients optimize inventory levels to save on inventory holding costs — a big win when thinking about where to cut costs during a recession.
#3 Increased Customer Satisfaction
Two primary ways a 3PL improves the customer experience is by (1) ensuring efficient and accurate delivery, and (2) allowing you to focus on core activities that increase customer satisfaction (like market research, personalized customer service, and quick response times).
The Growth of the 3PL Industry
Third-party logistics market size is projected to reach upwards of 2,018.22 billion dollars by 2030. Recession or not, the growth of the 3PL industry looks to be near definite, with all data pointing up and to the right.
As a business, you want to look for ways to hitch your wagon to a fast-growing partner. With the bright future ahead for 3PLs, it’s as good a time as any to consider outsourcing your fulfillment.
Your 3PL Should Be Focused On Growth
As the 3PL industry grows, the 3PL you partner with should have a plan in place to scale, just as you do. At Jay Group, we’ve grown to three strategically placed warehouses across the United States in the past few years.
With one-day and even same-day shipping becoming an ecommerce expectation, we can currently reach 78.6% of all consumers via 2-day ground from our existing East Coast and West Coast facilities. Combined, our facilities have 517,000 square feet of space, each one optimized to promote the most efficient warehouse flow possible.
We’re focused on growth, and we’re passionate about helping brands in your vertical excel in turbulent times.
Becoming one of the Best Performing Businesses in a Recession
It’s important to keep in mind that recessions are cyclical, and they do eventually come to an end. While it may be a tough time for businesses, know that it’s not a permanent state and the economy will recover.
By being proactive and preparing your business now, you’ll be in a better position to weather the storm and thrive as one of the best businesses during a recession.