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Overcome energy crisis through online trade ?
This advantage offers the eCommerce
Overcome energy crisis through online trade? – Is that possible? Whether eCommerce is the solution to the crisis, what an energy crisis is in the first place and what led to it, we explain to you in this video.
Overcoming the energy crisis through online trading - Is it possible?
The energy crisis – whether imminent or already prevalent – is on everyone’s lips. It affects private individuals as well as companies – thus also online trade? In the following video, we get to the bottom of this question, provide a little clarity on the subject of what the crisis is all about and whether online retail can make its contribution to overcoming this crisis.
eCommerce agency eBakery
If you’ve been thinking about expanding your retail business with an online store or selling on marketplaces since the beginning of the pandemic, now is the best time to do it. As an experienced eCommerce and online marketing agency, we at eBakery are happy to advise you on this. Whether an online store is an option for you, which marketing strategy you should use or whether a multichannel strategy should be the means of choice for your business, we clarify in a consultation.
For this purpose, we have linked you to our page in the upper right corner, where you can learn more about us and our services, as well as book an appointment directly. We are looking forward to your project.
What is an energy crisis?
But now back to reality – the energy crisis. What is it anyway?
Generally speaking, it is a term used in business. That is, in a figurative sense, it means an economic crisis related to energy-producing raw materials. So this can be e.g. oil, gas or electricity. Either there is a shortage of these raw materials and/or prices are far above the general inflation level.
Overcome energy crisis through online trade - The causes
In the current case of Germany, both gas reserves and electricity prices are affected.
One could fill a separate video with the reasons for this state of affairs – however, a decisive event is the war between Ukraine and Russia, which has been ongoing since February 2022, and the sanctions imposed as a result. These led, among other things, to the flow rate of the Nordstream pipeline from Russia to Germany being throttled first to 40% and then to 20% in July.
Is there already a crisis in Germany?
In Germany, a crisis can already be identified by the fact that Germany’s largest gas importer has asked for government support due to liquidity problems. In addition, the wholesale price of electricity has more than quadrupled within a year. These are conditions that have already driven one or the other company into insolvency. Thus the mirror reports that in a study it came out that still in February only 23% of the enterprises indicated to have fear for your existence. In the meantime, the figure has risen to 34%. The consequences are cutbacks and outsourcing abroad.
Overcoming the energy crisis through online trade - advantages of eCommerce
It will be difficult for individual companies to change the prevailing situation on their own.
Ultimately, therefore, it is a matter of finding measures to curb one’s energy consumption or, in terms of the overall balance, to reduce one’s costs in general. One approach that online retailers are already implementing is to eliminate the brick-and-mortar store. Its showroom is the product video. This costs a one-time production fee and can then be used in your own store or for advertising campaigns. As a result, you save on ongoing rent, furnishing, cleaning, energy and personnel costs that the store tenant has to pay each month.
The monthly subscription fee of a Shopify store, for example. is a joke compared to the fixed costs of an offline retailer.
In addition to this, one could fall back on a construct that has become more and more established in the pandemic – the remote office. Of course, this does not apply to warehouse employees, but rather to the human resources and accounting departments. The advantage here, too, is the elimination of the costs just mentioned. These apply to the office to the same extent as to the retail store.
What is fulfillment?
Another option offered by online retail that does not exist in offline retail is the use of fulfillment.
What that is, by the way, you can see in our video linked above right. As a quick example, consider Amazon FBA.
You send your products to the Amazon Fulfiller, they store them and take care of the entire fulfillment process – storage, delivery, returns and everything else.
Prices will certainly rise here as well, since the crisis is not bypassing the fulfillment industry. Nevertheless, perhaps the future could be one of minimizing the number of existing bearings and maximizing efficiency. This means retailers are increasingly relying on fulfillment services. This saves them employee training time and costs, as well as storage costs. These can then be offered more favorably by the Fulfiller, the more rely on it.
Is outsourcing a solution?
A final thought on this, which would be possible but not laudable – is the thought that was already expressed at the beginning – outsourcing. So to obtain its stock not in Germany, but abroad. However, this would lead to the loss of jobs, a weakening of the German economy, which overall would further aggravate the prevailing situation. It also remains to be seen how the price increase will develop in other countries.
Overcoming the energy crisis through online trading - Summary
So what can we say about this overall?
Online retailers have a clear advantage in terms of the energy crisis if they approach it the right way.
This means for individuals, moving into eCommerce can be a profitable and saving move.
Nevertheless, it must be clearly stated that online retailing will not solve all problems. This is clearly a matter for the federal government.
The measures that can be taken, whether the expansion of renewable energies, rationing of raw materials or something else entirely, would go beyond the scope of this paper. But we would be interested in your opinion on the subject.
Are you already affected by this as an offline or online retailer? What measures have you taken in the short term as well as the long term?
Do you have any tips for the community in this regard? And what government action do you hope to see. Write it to us in the comments. If you need help building your online business, feel free to contact us.
Do you have questions or need an individual offer? Do not hesitate to contact us.
Haben Sie Fragen oder brauchen ein individuelles Angebot? Zögern Sie nicht, uns zu kontaktieren.
