How Small Businesses Are Engaging In E-Commerce

Currently, e-commerce has brought in close to $42 Billion in retail sales and will only steadily increase as more and more consumers turn to the Internet for their purchasing needs. However, the integration between e-commerce and small business seems to be slow coming.

E-Commerce Retail Sales in Billions:

3Q 2009 – $36.5/4.0%

3Q 2010 – $41.5/4.2%

Small Business and Internet Integration

A recent survey from Discover Credit Cards found that although small businesses are beginning to embrace e-commerce, less than half of small businesses surveyed have a website.

Small Businesses with Websites

2007 – 33%, 2009 – 45%

Small Businesses and their Websites

A major reason why small business owners don’t have a website or participate in 3-commerce is simply because they feel they do not need one.

Reasons for not having a website

  • 41 % - Business currently does not need one.
  • 19% - Cost
  • 16% - Lack of time
  • 10% - Other
  • 9% - Too complex
  • 4% - Business will never need one
  • 1% - Not sure

Many corner markets, dry cleaners, bakeries, and other mom-and-pop operations have enough neighborhood foot traffic that they really don’t need the Internet to turn a profit. Their Internet penetration is limited to an online Yellow Pages listing. However, 13% of new small businesses do plan on connecting their business to the Internet.

Small Business Website Functions

How small businesses use their websites could also explain their lack of penetration in e-commerce.

  • General Information – 80%
  • Customer Service – 45%
  • Capture Leads – 35%
  • E-Commerce – 30%
  • Reservations/Appointments – 15%
  • Posting a Blog – 13%

Small Business and Annual Sales Size

Barlow Research found that the average number of small businesses that have a website is around 45%. However, this same study also found that the larger the annual revenue for a small business, the more likely that business was to participate in e-commerce.

  • 69% - $1,000,000 - $2,490,000
  • 67% - $2,500,000-$4,900,000
  • 49% - $500,000 - $999,000
  • 45% - $100,000 - $499,000

Small Business and E-Commerce Investments

Only a small number of respondents planned on increasing their budgets to make their small business web-enabled or e-commerce ready.

  • 17% Put money towards their website
  • 15% Put money towards email marketing
  • 13% out money towards social media marketing

Small businesses seem more apt to partake in social media marketing that to invest money into creating a website for e-commerce or marketing. While many feel that the next wave of commerce will come in the form of mobile commerce or “m-commerce,” it is still too soon to tell if small businesses will embrace this new form of commerce.

Mobile Commerce

Currently only a small percentage of online retailers participate in mobile commerce.

  • 37% of smartphone users have purchased an item via m-commerce
  • 8.8% of retailers using m-commerce


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