5 Ways Small Vendors Have an Advantage in this Economy

These are tough times in the world. Global events are being felt at home too. For small vendors, this might seem like a reason to pack up and go home… Or should they? As small businesses they actually have some advantages that could help them weather the worst of this economy.

(Photo by ROMAN ODINTSOV: https://www.pexels.com/photo/close-up-of-a-person-doing-pottery-8063880/)

I’m publishing this just hours before Trump’s deadline to destroy the civilization of Iran. The straight of Hormuz is closed, and everything from my family’s food bill to the gas in our car is rising alarmingly. And I just learned that the world’s oil shortage hasn’t even started yet because of how long it takes tankers to travel – that’s right, we are still a couple of weeks away from really being impacted by the shortage – think of it as the long pause before the storm.

As ominous as it all sounds, there is good reason for small vendors to keep doing what they have been doing in these troubled times. This is because they are small, which makes them resilient and agile – there is no board of directors demanding profits or else. Small businesses also operate on much smaller budgets, so a slow-down in sales is not as catastrophic. Finally, they already know about belt-tightening because the volatile past two years have been a learning experience.

Yet even if the impact is not as dire for small vendors, there is also the possibility that they might actually do better than expected. Here are five reasons why I think that may be the case, with some real-life examples:

1: Small Vendors are Local

When federal and state economies shrink, business reverts to being more local. Local is where small businesses thrive. If the cost of fuel makes travel to more distant stores expensive, people will look to vendors who bring the goods to them. They usually do this at local vendor fairs where small vendors are.

Example: I’ve interviewed many vendors who come to local fairs near where I live. In the process, I also meet many of their customers. Almost every time they mention how much they appreciate that the vendors are coming to them, that it’s so convenient that they are in their neighborhoods, and that they prefer buying from them rather than the big stores just a parking lot away.

2: Person to Person Sales Builds Trust

When government and corporations make the people feel like they are not providing, people begin to distrust them. They start asking how their representatives in a faraway capital or on a TV screen would even know about their unique needs. Instead, they turn to people they can meet face-to-face. Local vendors who appear regularly at vendor fairs become the familiar face they trust to provide those goods and services.

Example: Allan Mansoor, who is an author I interviewed for the current newsletter, said that meeting customers in person is key: “It is refreshing to talk with people in person in a lighthearted manner about something that resonates in many households.” Allan draws on the common experience of a toilet seat left up that any customer with children can all relate to. This then creates that bond that facilitates the sale.

3: Buyers Want Products and Services they Understand

During an economic downturn, solutions and remedies from government and large corporations tend to be complex and intended to meet broad, general needs. When people are struggling to pay the mortgage, those don’t seem to meet their needs. However, a simply-produced and easy to understand product from a local vendor, who is usually available to explain it, is what they would rather spend their hard-earned money on.

Example: One of the artists I met last year, who makes picture frames with sea shells, said that her art just doesn’t show well on a website or cell phone screen. While the pictures are high resolution, she has more success when she meets her customers. It is when she explains how it’s created that they begin to appreciate the work and effort involved.

4: Availability and Speed

Products and Services provided by government and large corporations tend to take longer to materialize. They need to work through bureaucracies, regulations, logistics, and adjusted pricing before they can deliver. All those impediments are simply not there when people buy from their local vendor. Local vendors typically don’t have those restrictions inherent in large volume production, because they operate with small volumes.

Example: I spoke with a vendor last year who sells salsas using a secret family recipe – honestly the salsas are delicious and should sell themselves. Now he only has a very small product line and you’d think that makes it hard to compete with larger brand-name salsas in stores. However, in addition to selling at local vendor fairs, he also delivers them in quantity to small restaurants who appreciate the authenticity and unique flavor. What they also appreciate is that because he is local, he delivers the orders, sometimes changed at the last minute, within hours. That is a response time and flexibility they don’t receive from bigger distributors.

5: Bartering and Price Negotiation is Always Possible

Ever try to try and barter your services for a jar of peanut butter at the grocery store? How about trying to negotiate a lower price for a Tupperware set? That likely won’t work. However, when you are at a local vendor fair, that often possible. While it’s not ideal for the vendor of course, the fact is that because of the setting it is an option, especially if what you’re bartering with is of value to them.

Example: I met a ceramic artist recently who mentioned that her home is filled with art from other artists that she meets at the vendor fairs. She said that this was one of the things she loved about being a small artist in an artist community – she would never be able to acquire original art from a gallery or auction house that way. Now doing this regularly isn’t the way to prosperity from one’s art, but it does bring joy and community, which can also lead to more sales over time.

Conclusion

I know that the current economic reality is dire for many people, especially for small vendors. I also expect the reality of the ongoing war in Iran to have even more ramifications in the near future. My reason for writing this article is not to diminish those at all. It will be tough, and as a small business owner myself, I’m also feeling the pinch.

That said, being small has advantages and that is what I’m emphasizing here. As you go out to sell your products and services, think about those advantages. That optimism will show and that too will drive more people to your booth. When they do, be willing to make deals with your buyers. There is no better advertisement than a good experience.

Oh, and one more thing to look forward to: we’re headed into late spring. This is a time when people leave their homes and look forward to attending local fairs. Flowers are in bloom, the weather is better, and tax season is over. Maybe people might be looking to spend that refund!