“In a storm, people don’t buy surfboards. They buy life jackets.”

Unknown

Your sales are down 20%. You blame “The Inflation.” You blame “The Economy.” You tell your team: “Nobody is buying right now.”

You are lying to yourself.

Wallets do not weld shut during a recession. People still spend money. They just stop spending money on stupid things. And they start spending money on safe things.

If your sales dropped, it’s not because people are broke. It’s because your product feels like a “Splurge” instead of an “Essential.”

Must-Have vs. Nice-to-Have

In a bull market, you can sell “Vibes.” “Buy this cream because it smells like lavender and self-love.” That works when money is free.

In a bear market, “Vibes” die. “Utility” wins. You must reframe your entire product.

The Pivot:

• Before (Nice-to-Have): “Our ergonomic chair looks great in your office.”
• After (Must-Have): “Our ergonomic chair prevents the back surgery that costs $15,000.”

You move from “Luxury” to “Insurance.” People cut luxuries. People pay insurance.

People cut luxuries. People pay insurance.

Commodity Hell

If you sell “Products”, you are in trouble. A “Phone Case” is a commodity. You can buy one on Alibaba for $1. If you sell phone cases, you are in a race to the bottom. Someone will always be cheaper.

The only exit is Brand.

Why does Apple sell a phone case for $49? It is the exact same plastic as the$1 Alibaba case. But people line up to buy it.

Because they aren’t buying plastic. They are buying Identity. “I am an Apple person.”

In a recession, commodities get slaughtered because people switch to the cheapest option. Brands survive because people switching feels like a “downgrade” of their identity.

The Action: Stop talking about “Features” (Plastic). Start talking about “Identity” (Who they become when they use it).

When sales dip, the first instinct is panic. “Quick! Run a 30% off sale!”

This is the Death Spiral. You train your customers that your product isn’t worth full price. You slash your margins just when your costs (shipping, goods) are going up. You bleed out.

The Fix: Strategic Bundling. Do not lower the price. Raise the Value.

Instead of: “Buy this protein powder for 20% off.” Do: “Buy 3 tubs, get free shipping, a shaker bottle, and our workout guide.”

You keep the unit price high. You increase the Average Order Value (AOV). You liquidate more inventory. The customer feels like they won. You kept your margin.

The “Lipstick Effect”

In 2008, the world economy collapsed. Do you know what sales went UP? Lipstick.

Why? Because people were broke, but they still wanted to feel good. They couldn’t afford a $2,000 handbag. But they could afford a$30 lipstick. They traded down, not out.

The Lesson: If you sell expensive things (Sofas, Cars, High-End Tech), you need a “Bridge Product.” Launch an accessory line. Launch a cleaning kit. Launch something under $50. Give them a way to buy into your brand without needing a mortgage. These “Affordable Luxuries” keep your cash flow alive while the big purchases stall.

These “Affordable Luxuries” keep your cash flow alive while the big purchases stall.

The Amazon Moat

You cannot beat Amazon on Price. You cannot beat them on Speed. If you try to be “Cheaper and Faster”, you lose. They have robots. You have a garage.

So how do you win? You win on Experience.

Amazon is a vending machine. It is cold. It is efficient. It is boring. You must be the Boutique. You must be warm. You must be human.

How to Beat Amazon:

1. Curation: Amazon has infinite choices (Analysis Paralysis). You have 3 perfect choices.
2. Education: Amazon lists specs. You teach them how to use it.
3. Connection: Amazon sends a brown box. You send a handwritten note.

In a downturn, people crave connection. Amazon cannot give them that. You can.

The Bottom Line

Recessions are not a red light. They are a filter. They filter out the businesses that are “Nice.” They keep the businesses that are “Necessary.”

Go through your website right now. Delete the word “Splurge.” Add the word “Investment.”

Don’t lower your standards. Raise your utility.

In the next chapter, we are going to look at how to run the machine itself: Operations & Growth. How to build systems that work even when you are asleep.

Five things to do this week

1. The “Must-Have” Rewrite: Look at your homepage hero copy. Change it from “Luxury” to “Utility.” Don’t sell the “softness” of the sheets (nice-to-have). Sell the “deep sleep that improves performance” (must-have).
2. Launch a “Bridge Product”: If your main product is $100+, launch something for$40 this week. A care kit? An accessory? Give people a cheaper way to enter your ecosystem.
3. Build a “Recession Bundle”: Stop doing “20% Off.” Do “Buy 3, Get Free Shipping + Gift.” Increase the value, protect the margin.
4. The “Lipstick” Check: What is your version of the $30 lipstick? The small indulgence that people buy when they’re stressed? Find it. Promote it heavily.
5. Audit Your Competitors: Go to your top competitor’s site. Are they running a sale? If yes, they are panicking. Do not copy them. Double down on your brand story and value.