Stop Shopping, Start Stacking

Jeff Bezos has uttered some words you might not expect — at least not from someone who made his billions as the founder of Amazon, one of the world’s largest retailers. Just before the first of the year, Bezos advised folks to forego unnecessary large purchases, such as a new TV or a car, citing the possibility of a recession this year. 

            Bezos also advised small businesses to put off large capital purchases. Why? If a recession sets in, having “dry powder,” as Bezos put it, could go a long way. Basically, if the economy contracts, having more money in your pocket could prove crucial. Credit card bills or other financing payments, on the other hand, could be untenable if folks lose their job, see hours reduced, or if business revenues decline.

            At the time, Bezos deferred when asked whether the United States was in a recession. Technically, recessions are often declared after the Gross Domestic Product (GDP) contracts for two straight financial quarters. Bezos did say that things were slowing down and did not look great. Yet despite plenty of effort, the wax and wane of the economy often befuddles economists, policymakers, and business leaders.

            That said, when economies do contract, it’s sometimes possible to find great deals. Across the United States, housing prices have moderated in the face of higher interest rates. Property prices can also decline during a recession.

            Automobiles have been selling for record prices amid supply chain shortages. For some time, dealers have had leverage with consumers willing to pay above suggested retail prices for vehicles. During economic contractions, car dealerships often offer discounts to prop up slumping demand. The same goes for retailers, including Amazon. Of course, every major purchasing decision should always be carefully considered, recession or not, but when a billionaire retailer says it’s a good idea to slow down?  That might be advice worth taking. 

Sincerely,

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