In order to keep track of demand, it takes much more that analyzing consumer demand, particularly online. Online, customers come from all over and their spending behavior can be difficult to predict. In general, there are 4 components of demand that come from four different areas of the market. Understanding these components, consumer, business, government and foreign demand, can help you to watch for the larger forces at work that affect your market niche as a way for you to predict future demand.

The one area where businesses track well is consumer demand. They do this by examining sales, by how the national and local economies are going, as well as how well their competition is doing. As you probably know, consumer demand is down, particularly in the powerhouse of consumer demand, the U.S,. but globally as well. In the U.S., the unemployment level is bordering on double digits and it’s that loss of jobs that impacts consumer demand. With people losing their jobs and homes, as well as many other possessions, they simply do not have the wherewithal to make any unnecessary purchases. But all of this does not mean there is no consumer demand, it merely means the market has shifted due to the current state of the economy. It also shows how a market can be influenced by other components besides consumer demand.

A business can create demand due to the need for suppliers. Suppliers provide businesses with the necessary components for that business to create products. Businesses also create jobs. Jobs enable people to go out and make purchases. Businesses sell things to each other as well. Failing businesses enable smart entrepreneurs the opportunity to service any leftover demand and in doing so, get a bigger picture of demand in a market. As an online entrepreneur, the possibility of being in a position to take advantage of this has never been greater.

In an economic downturn like what we are experiencing now, the U.S. government has intervened in an attempt to stabilize the market and create demand for goods and services. With this action, the market has begun to stabilize, and demand for goods and services is beginning to increase. The downside to an action such as a stimulus is that it is the taxpayer that usually winds up footing the bill. (On a personal note, it’s this that has the Republicans all uptight. It’s interesting to note that neither the Republicans nor the Democrats, here in the U.S., raised much of a fuss when it was a Republican administration spending money like a drunken sailor. But that’s just me).

Foreign demand is simply the exports a country sends out minus the imports a country receives. A country can create demand in another country by clamoring for goods and services that are not manufactured in said country. All of this is dependent on how different countries relate to one another and the currency rate between two countries, so demand can rise or fall as things change back and forth.

As online marketers, it’s important to be aware of these components, particularly in this economy. As online marketers, it’s important for us to be cognizant of these market forces. Online marketers are in a unique position in any economy in that they can offer immediate gratification with digital products, however knowing that any market can shift due to any combination of these market forces is an important aspect to running any (online or off) business.