To Web, or Not to Web?

Interland, a top Web hosting firm for small- and mid-sized businesses, recently completed its inaugural e-commerce study. In the nationwide survey of small businesses with Web sites, the company reveals several interesting trends in e-commerce, as well as general online developments.

The study shows that 78 percent of small businesses think their company benefits from having a website. More than half of those surveyed said having a website lends credibility to their small business. One-third of small businesses said their website is their most powerful market tool in their arsenal.

Additionally, 28 percent of small businesses said they rely heavily on their websites for sales purposes. Twenty-one percent said their website provides them with a critical building block for developing products they sell. Nineteen percent of small businesses said their website helps them reduce other marketing costs.

Still, small businesses remain wary of the Web. A study from Verizon Communications, completed at the end of 2002, indicated that nearly 70 percent of U.S. small businesses don’t have a website.

Now, smaller companies are realizing that operating a website is just one of many ways to reach out to customers. Small- and mid-sized businesses already on the Internet are finding it to be an effective business tool. More than half, 56 percent of those Interland surveyed, are able to attribute some portion of their annual sales to their online Web presence.

Sixteen percent of small businesses surveyed credit their website for producing between 11- to 50-percent of their annual sales. Ten percent said their websites produce 50- to 99-percent of their sales. Seven percent of the small businesses surveyed only sell goods and services online, accounting for 100-percent of their sales revenues.

Many of the small businesses surveyed expect seasonal sales surges over the holidays. Twenty-two percent of the small businesses surveyed said more than half of their annual sales would happen over the holidays. Eleven percent said 26- to 50-percent of their annual sales would take place online between November and December.

Of those small businesses that sell products or services online, they either sell a little or a lot of items. For example, 45 percent of small businesses sell five or fewer products online, while 40 percent sell more than 20 products through their websites.

However, these trends will likely shift over the next couple of years. Interland reveals that 26 percent of the small businesses that currently don’t sell products online plan to add e-commerce capabilities to their websites within the next two years.

E-commerce capabilities aside, the greatest common denominator for small businesses and the Internet is e-mail. Sixty-eight percent of small- and mid-sized businesses surveyed use e-mail on a regular basis to communicate with customers.

Interland’s survey of small- and mid-sized businesses with websites was completed in Sept. 2003. Verizon’s study was completed in Dec. 2002.