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BizReport : Ecommerce archives : June 28, 2018

Poll finds digital sales improving SMB revenue lines

New data out from Manta and Insureon underlines the importance of the digital space for small businesses. Among the findings is this: 43% of small businesses are seeing "significant" revenue growth because of online sales channels.

by Kristina Knight

Kristina: What trends does this data underline?

Jeff Somers, President, Insureon: According to our joint poll with Manta, online sales drive a significant portion of small businesses' revenues. Forty-three percent of business owners who sell products online have experienced significant revenue growth, while 81 percent believe that online sales are integral to their businesses' success. As reported by the U.S. Department of Commerce, online sales account for 9.5 percent of all retail sales in the first quarter of 2018. That number was just 3.5 percent in the first quarter of 2008 - a six percent increase within the last ten years.

This data points to the fact that the future of retail is online. However, the move to online sales is not without risk. For example, let's say a business sells a chair on its website. If the chair breaks, causing an injury, the customer could sue. While these types of occurrences are not common, they can trigger expensive lawsuits. Product liability insurance or general liability insurance can protect small businesses from the hefty cost of a product liability lawsuit, whether it results from products purchased online or offline.

Kristina: What can small businesses do to ensure they're not being hidden because of the changes in net neutrality?

Jeff: To stay competitive, it's imperative that small business owners stay informed on how the repeal of net neutrality regulations could impact their online sales. Some experts are saying that the repeal could lead internet service providers to charge more for faster bandwidth, in turn slowing down site traffic for businesses unwilling or unable to pay the extra fees. Small companies should start thinking now about how a lack of paid prioritization could affect their site load times, and if the slower speed might have a negative impact on sales.

One way small businesses can circumvent the slowdown is by also selling their products on major third-party marketplaces, like Amazon Marketplace, eBay and Etsy. This allows small business owners to reach a wider audience and avoid paying potential data and content prioritization fees.

Selling on large third-party sites is something many business owners are already doing. According to our recent data, nearly a quarter (24 percent) of small businesses currently sell their products on Amazon Marketplace, while 22 percent use eBay for online sales.

Kristina: What most surprised you about the results?

Jeff: The most surprising finding that came out of our joint poll with Manta was the positive sentiment small businesses seem to share about Amazon's impact on their sales. While 32 percent of small business owners believe that Amazon and other online retailers have had a negative impact on their companies, the remaining 68 percent believe the impact has been positive. I was surprised by this finding since it runs contrary to some existing assumptions that Amazon is threatening the success of small businesses.

Tags: ecommerce, ecommerce tips, ecommerce trends, Insureon, M:Commerce trends, mobile commerce, mobile marketing

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