That is all we ever hear nowadays. Demand falls because of fear from consumers and the demand curve just shifts and shifts left causing much pain to producers. Producers start to find cost of making the products too expensive and supply shifts left. Prices are becoming very volatile to fit the current demand of consumers and price elasticity shows that manufactured goods are most affect as they are rather elastic. Everything is going in a downward spiral and it does not seem to be letting off anytime soon. As both producers as consumers in some ways, we are all affected by this global slowing of the economy. However, all is not lost as both prodcuers and consumers rush to cut cost or increase their productivity in these tough times..
HERE ARE SOME TIPS:
As a consumer,
1) LOOK OUT FOR MAJOR SALES ONLINE AND CHECK OUT ONLINE PRICE COMPARISON WEBSITES. IN SHORT, USE TECHNOLOGY!
-The Great Singapore Sale is a GREAT example of a cost reduction method. This allows us to buy things as cheaper prices for the same products though it is only avaliable during those periods. Don't waste time on shops with no discounts or increased prices like Veblen goods because at this time, producers are lowing prices all over the places and it is just not worth it to buy such products as this time.
However, if you MUST buy luxury products to fufil yourself, then i suggest buying second-hand LV, Prada, Gucci,etc... goods. There are many such shops in shopping centres such as Far East or Ebay.
The internet is a great resource, allowing for all the information to be made avaliable in a few clicks. SO, dont wait and check them out!
As a Producer,
2) CUT OFF THE EXTRAS/ NOT NECESSARILY NEEDED!
At this point of time, companies need to save, save, save to increase their profits by reducing cost. There are always inefficiency and the necessary cut offs must be made. Companies are laying off workers with record numbers all over the world. Unemployment is going sky high but companies have to do this to prevent themselves from going bankrupt. In the office, little things can be saved. For example,fewer lights can be switched on or fewer machines are made to produce goods. Small things like this can make a big difference as they are variable cost which can be saved. I visited a restaurant recently who instead of giving everyone soy sauce each like they use to, they now only produce it when requested and only one teaspoon or so of soy sauce is made available for each table at each point of time. Now, producers are getting quite panicky and using all methods possible. Lay-offs are inevitable and the business owners are not really to be blamed for it. Lets do what we can and hope that we will emerge from this, soon.
Useful Links:
-www.visitsingapore.com/publish/.../special_focus/great_singapore_sale.html
-http://www.greatsingaporesale.com.sg/
-www.singaporesales.com.sg
-www.shopping.aol.com/singapore-products
-www.recession.gather.com
Hopefully these tips would help you tide through these trying times and stay tune for the next post from your very own RECESSION GURU!
Resource:
Conversations with my father who is a businessman.
Conversations with many working people about the economy.
Links provided with tips on how to survive the recession
Amanda Ong 5Z
Manufactured goods are not elastic - demand for them is! The example you gave about the soy sauce was symptomatic of how firms try their very best to reduce costs. I suppose such measures work because custimers understand that they are in a recession - but if we are not in a recession, they will probably lose customers by appearing so stingy!
ReplyDelete