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  1. #1
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    From over here in Southeast Asia, is it 'really that bad in the west??
    Dear fellow ABWers,

    Thank you in advance for taking the time to read my post )

    Living way over here just a 'few miles away' across the lake in Southeast Asia from everybody back home in the west (originally from the Bay Area)...., regarding the economic situation that I see on T.V. and read both on the net and papers virtually everyday, where for example, people are hanging foreclosure signs like Xmas wreaths on their doors, gas station attendants changing the signs of prices faster than an old Charlie Chaplin movie - are these things ubiquitous througout the whole country??

    My point being I guess is.....has any affilaite marketers felt a noticeable and significant drop in their business because of this?? Is it worth starting/creating more websites for various niches, or should I wait to see what transpires over the next year (eg; see who makes it to the Whitehouse, before pressing forward).

    Your opinions and perspectives regarding this discouraging situation, would be much appreciated indeed.

    Thanks again for listening )

    Mark

  2. #2
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    Foreclosures are rampant. But that doesn't mean people will stop shopping for things they need, so focus on core products that help people through bad economic times (I said that a few times to people at PodCamp NYC yesterday ). People will repair instead of purchase some things new, they will buy used on eBay and Amazon, they will look for discounts.

    But even in a bad economy people want to purchase things that make them feel good or in control (electronics, games, toys, art).

    And you aren't building sites just for immediate purchasing, you are building for your future and for sustainable sales. What you build today might not show returns for a few months regardless, so focus on what you think will sell over the long haul.
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  3. #3
    Moderator BurgerBoy's Avatar
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    They had on TV yesterday that one out of every 538 homes in the U.S were in foreclosure right now.

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  4. #4
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    Hi again Loxly...long time, no talk eh?? ..ha ha.. )

    Absolutely true what you say and that is one thing that I will, always key in on.... - is long term. I know scores of marketers have made good money promoting the latest fad, trend, gadget and have come away smelling like roses. However, I typically try to focus on the stuff that has and will be there for years to come - the essentials if you will.

    I once read about a marketer who is now a millionaire who sold socks! So go figure eh? I will never be in this arena for the quick and easy, although it has worked for many.

    Thanks again for your support!!

    Best ,
    Mark

  5. #5
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    [Moderator Warning: If this thread turns political, it will be shut down.]

    No, it's nowhere near as bad as the media makes it seem. Either that, or I'm pretty isolated.

    We went out to eat for dinner last night. We went early (before 6pm), but there was still a wait. People are still going out to eat in droves. (That's one of the most discretionary forms of spending, since it's usually much cheaper to cook your own meals.)

    Every gas station I drive by looks like they're doing about the same amount of business as they did 10 years ago when gas was at historically low prices. I haven't talked to a single person who has changed their driving habits or transportation methods based on the high gas prices. There are no lines at the gas stations (like there were in the 80s).

    I don't know anyone who was affected by the subprime mess. I know I've strongly discouraged people from using Adjustable Rate Mortgages or getting in over their head, ever since the similar problems that happened in the 80s (when I did know one person who was affected).

    Unemployment is still at record lows. I don't know anyone who is unemployed and unable to find a job.

    I know several people who have made major purchases recently (cars, big vacations, etc.).

    There are new office buildings and houses being constructed all over the place.

    The stores and malls I drive by always seem to be packed. Online sales continue to grow. People are still buying stuff.

    The media is focusing on the bad, but every "informal indicator" I look at says that it's just a minor speed bump on the highway. There will always be ups and downs in economic cycles.

    Personally, I think we'll hear far less about "how bad things are" after November 4th.
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  6. #6
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    Hi there Michael,

    Thanks a bunch for replying and your response brought back many memories when living back in the west.....meaning.....you're so right about being able to gauge 'discretionary' economy, as an example......simply by seeing how many people go out to eat. As we all know, how cost effective it is to eat at home. However, it is inherent for both North Americans and Europeans alike to eat out, no matter at what cost - it's in our genes....I cannot think of anybody who says they love to do dishes!

    But......when you mention how the media has probably blown all of this out of proportion, (in so many words), that it could very well be the case. Please know that I'm bot sitting here being gullible as ever and sucking in everything that I read and see, however, when it comes to me in Tsunami style magnitude, one can only wonder if there is any validity to the whole issue/s.

    As Loxly mentioned earlier....people buy to make themselves feel good and I certainly know dozens of people, especially after breaking up with somebody,where they go crazy with their credit cards to help numb the pain.

    Thank you so much indeed Michael, for giving me some insight, as all I've got way over here is in fact the media, as I'm not 'living' the experience myself and from what you and Loxly have pointed out, it's nice to know that there is a ray of light, if not more.

    Have to admit though...I''m waiting with baited breath to see what transpires on Nov. 4th - am I allowed to say 'healthcare reform' on this post??? )

    Thanks so much for your perspective!

    Regards,
    Mark

  7. #7
    Affiliate Manager Alan Hamilton's Avatar
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    Fuel prices are soaring, foreclosures are rampant, job and cost cutting is on the rise, and yes, consumer confidence ratings are down right now. But like every other adjustment / recessionary period we have experienced in the past and will experience in the future, it will settle out and then rebound.

    IMO, a slow economy does not mean we stick our heads in the sand or take a sleeping pill that wears off when the upsurge begins. Focus right now on products that people "need" versus "want" is probably sound wisdom. In the interim, you can always view it as an opportunity to plan new sites and products that will prosper when it turns around.

    We have always had these cycles, as all free economies do, and we will have them in the future, so the current downturn is not the end but an adjustment that will inspire a new cycle of growth. :-) Best of luck with your planning.
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  8. #8
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    IMHO, I think e-commerce will still grow as there is still room to grow but in terms of the economy, it is taking a beating or slow down.

    Every morning, I take my daily dose of company performance and last week, lots of companies announced their Quarterly Earnings. Most financial companies reported a loss in terms of billions (What's new ???) while lots are reporting a flat or declining growth YOY. Only company soaring right now... Apple, Google. Amazingly Ford reported a profit in Qtr1 08 - I think it has to do with the Jaguar sale to Tata of India + new markets.

    I echo what Loxly said, most people will not be going out to buy investment houses or beach condos, but rather focusing on growing their existing home equity by either putting in a new kitchen, etc. (Currently, inventory of new homes is at all time high since 1981). As opposed to going to Starbucks, they are going to JOE's coffee store. Going for subsitute goods as they are cheaper.

    Also, goods that are a "necessities" should not take a beating, it will be a commodity that you need no matter what such as things like food, gas (hey, they have to drive to work). Durable goods will see decline.


    Edit: Just found link for Durable goods growth/decline
    http://ap.google.com/article/ALeqM5j...WS7zAD9088BVG0
    Last edited by Eric Ewe; April 26th, 2008 at 11:35 AM. Reason: Found durable goods link

  9. #9
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    Dear Alan,

    Spoken like a true realist Alan - and I mean that in the utmost complimentary way!

    Yes indeed!...Focus on what people need, not want.... and take advantage of this time to plan for the future, as we all know, it's not going to last indefinitely. I guess I was looking for some reassurance, since I'm not presently living there.

    Sounds like basic common sense, but it really holds so true eh? I at times feel like I'm on a deserted island way over here, so hearing these posts from all of you, really makes me very thankful and lucky to receive such insightful replies.

    I have to say though...I'm seriously having Costco, Trader Joe's and TGIF burger withdrawals.

    Very grateful for your time to respond.

    Mark

  10. #10
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    Interesting you mentioned Starbucks, I am used to long lines there and yesterday I walked into a Starbucks in Brooklyn and there was no wait at all. Same at an upscale sandwich shop. There were people sitting in the park unwrapping sandwiches that they had brought from home instead.
    Deborah Carney
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  11. #11
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    Regarding the whole Starbucks scenario....

    In addition to myself having Costco, Trader Joe's and TGIF burger withdrawals....I forgot to include - 'Peet's Coffee' - for Pete's Sake!

    Are there still line-ups at Pete's for any of you west coast people?

    Seeing people unwrapping their own homemade sandwiches at the park, rather than going to Subway, may be food for thought?

    Mark

  12. #12
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    Quote Originally Posted by loxly
    Interesting you mentioned Starbucks, I am used to long lines there and yesterday I walked into a Starbucks in Brooklyn and there was no wait at all. Same at an upscale sandwich shop. There were people sitting in the park unwrapping sandwiches that they had brought from home instead.
    I was reading somewhere and it looks like Starbucks is taking a beating on wall street and companies that does books, magazines, etc via starbucks stores are concerned too. If starbucks takes a vertical nose dive, there goes those companies too.

    There is proven data that supports the "subsitute goods" theory where superior products will decline as inferior products will increase during hard times.
    Superior goods = Starbucks
    Inferior goods = Joe's Coffee

    (Superior good v Inferior goods - not necessarily quality of the products as Joe's might be as good as Starbucks, but rather they have not done the marketing/branding, etc and the price is much lower for the inferior goods)

  13. #13
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    Very interesting point Eric....

    Is 'inferior' really have to do with 'quality'?...or, is it that they just haven't spent the money on marketing to give them the worldwide recognition as the bigger names?

    If I had a choice of going to Walmart to buy some gift-cards, or otherwise, possibly paying a visit to Jack and Diane's store, or Tommy and Gina's further down the road, I'd probably opt for the latter two, to experience more of a personalized service, yet not ever thinking I was buying an 'inferior' product, merely due to the smaller size of their store, or less than well-known name.

    However, I don't wish to wander off the initial topic of whether we or I, should adjust my marketing strategies due to the weakening dollar - albeit, those Europeans must be just lapping it up right now, especially those Brits with such a powerful pound.

    Thanks Eric for your thoughts,
    Mark

    Mark

  14. #14
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    Quote Originally Posted by AffilMarx
    Very interesting point Eric....

    Is 'inferior' really have to do with 'quality'?...or, is it that they just haven't spent the money on marketing to give them the worldwide recognition as the bigger names?

    If I had a choice of going to Walmart to buy some gift-cards, or otherwise, possibly paying a visit to Jack and Diane's store, or Tommy and Gina's further down the road, I'd probably opt for the latter two, to experience more of a personalized service, yet not ever thinking I was buying an 'inferior' product, merely due to the smaller size of their store, or less than well-known name.
    OT:
    Generally, it more of a perception of the public and what the public will bear for a product (price wise). I have tasted coffee that are 5 times better than starbucks at a fraction of the cost of a starbucks coffee. Starbucks paid millions to brand their company/product but their product is not more superior than Joe's coffee.

    High end retailers will have a tough time moving crowds through the store in a soft economy.

    I would look at the Chinese market as lots of companies are setting up shop there. 1 Billion people.
    The Euro is strong so it might not be too late to get in on the action in Europe. Lots of companies like LS are setting up networks there.

    My 2 cents to all, hope for the best but plan for the worst.
    (I stole it from the phrase "plan to fail").
    Not to be a wet blanket or ic. I put in 200% in my job and life but just have a backup plan if sh*t hits the fan.

  15. #15
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    To Loxly, Burger Boy, Alan, Michael and Eric,

    I am extremely grateful indeed to all of you, for taking the time to respond to my initial inquiry and giving me your opinions and perspectives, which will all be heeded in one way or another.

    It's really nice to be able to get a more down to earth and non-glossed-over view of what's really going on over there and I will proceed accordingly and will however though, tread lightly in some regards.

    The theory of pursuing the 'needing', more than 'wanting' seems to hold so true. Thank you again everybody - I'm very thankful for your input!!

    Kindest regards,
    Mark

  16. #16
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    Shame about Starbucks. But with a full gallon of gasoline approaching the cost of a "grande" coffee, I guess a few folks are re-thinking their splurges and saving that for the gas tank. So, I think I'll continue to brew my own coffee at home for less than two-bits a cup. Then maybe Mrs. Beachy and I can get a mortgage on the new house we contracted to have built last week.

    Business is still good and people may alter their travel plans this summer, but they WILL travel. Travel distances will probably be shorter because of increasing fuel prices, but that will be good for me.

    The greed of the mortgage industry is as much to blame for the current rash of foreclosures as anyone. The mortgage brokers frequently led people to believe they could afford more house than they really were able to afford. Lots of other twists in there, too, but I don't want to get on the ol' .
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  17. #17
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by MichaelColey
    Unemployment is still at record lows. I don't know anyone who is unemployed and unable to find a job.
    Huh? U.S. Department of Labor statistics show March, 2008's 5.1 unemployment rate the highest since September, 2005, and up from last March's 4.4.

    Quote Originally Posted by MichaelColey
    Every gas station I drive by looks like they're doing about the same amount of business as they did 10 years ago when gas was at historically low prices. I haven't talked to a single person who has changed their driving habits or transportation methods based on the high gas prices. There are no lines at the gas stations (like there were in the 80s).
    My pool guy lives about 65 miles from this area, where most of his customers are. He now can only afford to drive home on weekends, and during the week stays with his mother at her retirement home. Gas station lines were due to shortages and rationing (even/odd day sales). There is no shortage of $4.00/gal. gasoline.

    Quote Originally Posted by MichaelColey
    I don't know anyone who was affected by the subprime mess. I know I've strongly discouraged people from using Adjustable Rate Mortgages or getting in over their head, ever since the similar problems that happened in the 80s (when I did know one person who was affected).
    I personally do not know any one either, but I see significantly increased numbers of "For Sale" signs in our lower middle class neighborhood, and as reported last month in the LA Times:

    Home foreclosures hit new highs and the amount of equity in homes reached new lows as the housing crisis escalated across the country in 2007, new figures showed Thursday.

    Nationwide, nearly 6% of all mortgages were delinquent at the end of the fourth quarter and just over 2% were in foreclosure, the Mortgage Bankers Assn. reported.

    The number of foreclosures was at the highest level since the association began keeping records in the 1970s.
    Quote Originally Posted by MichaelColey
    There are new office buildings and houses being constructed all over the place..
    The commercial real estate market lags behind the residential market by 12-18 months. Commercial downturns are now starting. As stated on the McGraw-Hill Construction website in Robert Murray's Monthly Report:
    Projects that are now reaching the construction start stage had financing arranged prior to the start of the credit crunch last summer. The credit crunch has since widened in scope, dampening the volume of commercial property transactions, and there are more instances where developers are putting projects on hold until the financial markets stabilize. In addition, state governments have come under greater fiscal stress, which may lead to the deferral of construction projects in coming months.”
    Overall, media reports have barely touched on the growing economic problems that we are facing.
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  18. #18
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    Quote Originally Posted by loxly
    Foreclosures are rampant. But that doesn't mean people will stop shopping for things they need, so focus on core products that help people through bad economic times (I said that a few times to people at PodCamp NYC yesterday ). People will repair instead of purchase some things new, they will buy used on eBay and Amazon, they will look for discounts.

    But even in a bad economy people want to purchase things that make them feel good or in control (electronics, games, toys, art).

    And you aren't building sites just for immediate purchasing, you are building for your future and for sustainable sales. What you build today might not show returns for a few months regardless, so focus on what you think will sell over the long haul.
    That is a beautiful post, full of common sense, practical advice and encouragement.

  19. #19
    Moderator MichaelColey's Avatar
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    Quote Originally Posted by AffiliateHound
    Huh? U.S. Department of Labor statistics show March, 2008's 5.1 unemployment rate the highest since September, 2005, and up from last March's 4.4.
    Back that graph up a bit (for instance, all the way back to 1948) and look at the big picture. It might have been better if I had called it "historically low" rather than "record low". From 1974 through 1996, it never even got down below 5%. The last 10 years or so, it's averaged around 5%. Economists vary on this, but most agree that unemployment rates around 5% are optimal. Much less than this and it creates inflation.
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  20. #20
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by MichaelColey
    Back that graph up a bit (for instance, all the way back to 1948) and look at the big picture. It might have been better if I had called it "historically low" rather than "record low". From 1974 through 1996, it never even got down below 5%. The last 10 years or so, it's averaged around 5%. Economists vary on this, but most agree that unemployment rates around 5% are optimal. Much less than this and it creates inflation.
    The relation of unemployemnt and inflation is only true in the short run. In the long run, this correlation (the Phillips curve) has been proven to have no efffect. Inflation is only directly correlated to the money supply.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  21. #21
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    "Personally, I think we'll hear far less about "how bad things are" after November 4th."

    I agree, things will be a lot better after that What's happening is now is a little more than a minor bump on the economic highway but there will always be people out there shopping.

  22. #22
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by Trust
    "Personally, I think we'll hear far less about "how bad things are" after November 4th."

    I agree, things will be a lot better after that
    The real answer to that is too political for here.
    Since June 10, 2012 a vegan aarf but still writing the Hound Dawg Sports Blog
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  23. #23
    Affiliate Manager Alan Hamilton's Avatar
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    Quote Originally Posted by Eric Ewe
    Superior goods = Starbucks
    Inferior goods = Joe's Coffee
    LOL. As quality goes, Starbucks is one of the most inferior products on the market, but they have done an excellent job of branding, which I think is what you mean when you refer to inferior and superior. Add enough sugar and syrup flavoring coupled with a catchy logo cup and you can make battery acid palatable!
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  24. #24
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    Young sales Pup!
    I remember as a young sales pup back before the 00 melt down, a guy saying what does it mean if you have 10% unemployment? Various answers were given and he said no young sales pups 10% unemployment means that 90% are working focus you thoughts and energy there, quite an epiphany.

    I live in Cambodia my sandwich went from .50 to $1 in 3 months and I am afraid to eat in the park, lest I get typhoid. Gas has been over $5 a gallon for a while now. I have to go 500 KM to Bangkok to get to a coffee shop that burns their beans and doesn’t have enough commonsense to keep it quiet. The west is looking pretty good to me right around now!

  25. #25
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    Don't know anyone personally that has been affected. Most of the people I know are in a better position today than they were a few years ago. I've read that a lot of the foreclosures were speculative buyers and people that got in over there heads buying more than they should have. Partly because of shady lending practices that would let people actually buy more than they could really afford.

    Gas sucks, but only because the price has doubled in a very short amount of time. The actual cost isn't that terrible and I haven't seen people riding around much less because of it.

    Consumer spending will be down for a bit, especially as the value of homes keep dropping. (which it isn't doing in all markets) People will always be buying houses though so new wealth will be added continuously. Most of the noise is just hype caused by the media outlets in my opinion.

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