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B2B: How to Play a Slowing Economy

Here's something investors haven't thought about for a long time: how to survive a recession. Well, reader Tom Bock from Medford, Oregon has a solution: B2B e-commerce stocks. Tom's reasoning: B2B cuts costs, so will face increasing demand. Thanks, Tom, for this interesting Guest Perspective. Read more...

One area of the B2B e-commerce sector I haven't heard discussed yet, is its inherent ability to profit from an adverse economy, should one occur.

The recent fear of rising interest rates, and any resulting slower economic growth, are of relevant concern to most individuals and businesses. It is during such times that companies begin to take a hard look on how they can increase their bottom-line, by both increasing sales and saving costs. It would be fortunate for the B2B industry to be developing during such a period, as its products and services would be in higher than 'normal' demand. (I highlight 'normal', since B2B is already growing at a fantastic rate).

At this point in their history, higher interest rates, slower economic growth, even recession, would actually be good for the new B2B industry. It would further fuel their growth. This is an industry that 'generates' cost savings; an industry that creates better economic efficiencies. B2B companies have products and services that are, and will be, highly sought after, in good times and bad.

Once the B2B model is fully deployed, years into the future, I would expect B2B companies to react in-sync with the rest of the market. At that time, they and the cost efficient models they create will be an integral part of the business landscape, and will then rise and fall with the rest of the economy. For the next several years, however, they will fly ever-higher if the rest of the economy levels off or dips due to higher interest rates or other forces.