Recession Effects on Making Money Online

Are you or your business feeling the effects of the recession? More and more people are losing their jobs so many of them are looking for other ways to generate an income. One of these ways is to make some money online. But there is good and bad news if you want to follow a scenario to make money online.

Good and Bad News

Let’s start with the good news for existing online businesses. If more and more people are looking for ways to make money online with a business the more they will make use of existing information, products and services.

This is of course good news for existing online entrepreneurs or bloggers, because they may see an increase of visitors and thus a increase of potential income. This is a simple mathematical calculation: more visitors equals an increase of revenue.

But the increase of people that are trying to make an income from the internet is also bad news for existing online businesses. For instance there is a big change that a new online entrepreneur will offer the same information, products or services as an existing business. The result is that this effect the profit margin of the existing businesses, because they have to cut prices or spend money to extend their product base to stay ahead of the newcomers.

The cutting of prices is by existing entrepreneurs is of course good news for new online entrepreneurs, because they can hire freelancers or buy products and service cheaper than before the recession, thus setting up a new online business becomes cheaper for new entrepreneurs.

The increase of people that want to make money online is also bad news for new entrepreneurs, because it becomes harder and harder to get and setup a visitor base. And we’ve already seen that without visitors you can’t create an income from the internet.

But there is also bad news for both old and new businesses; there will probably an increase in people who are trying to scam other people. (During every recession there is an increase in online scams.) Which in turn will reflect badly on the whole online industry and it will cost businesses money to implement (new) technology to prevent scam or fraud.

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