Most Small Distribution/Wholesale Businesses Slow To Embrace Internet

Northfield, IL (September 14, 2007) -A recent nationwide sampling of small businesses in the food and beverage industry indicated that 11.2% of the respondents  generated more than 25% of their firm’s overall revenue from company owned websites in 2006, according to a Small Business Research Board (SBRB) report issued today.            

While the overall group of food industry participants said that a tasty percentage of their total business is coming from those eCommerce transactions, the study co-sponsored by Business Today Magazine also indicated that 45.2% of the respondents do not have websites.  The contrast demonstrates the divide that exists between those that are strategically embracing the Internet and those that are not currently making a commitment.

The sampling also showed that even though a portion of revenue was coming from their own websites, there has been no growth during the past five years. 

Of the total group of industry participants, 11.2% said that more than 25% of their revenue was derived from the Internet five years ago.

Similarly, of the 54.8% of the respondents that do have websites, half are selling  products or services from those sites.   Of this breakout group, 20.5% said they did more than 25% of their revenue from captive Internet sites last year as opposed to five years ago when 20.6% said they more than 25% of sales were generated by eCommerce.

Of the group, 14.7% with websites said they generated more than 75% of their 2006 revenue from their websites as compared to 8.8% five years previous.

Nearly 97% of the food and beverage industry owners and managers participating in the sampling said their Internet sales would remain the same or increase during the next 12 to 24 months.   Of those, 29% are looking for an increase, which is close to the national average of 29.2% for all small businesses polled.

Owners and managers of more than 550 small businesses representing numerous industries responded to the nationwide SBRB / Business Today study.  

The SBRB / Business Today report provides specific detail by size of business, by industry, by region (and in some instances by state) the various experiences each segment has had with the Internet and their commitment to offer products and services through eCommerce transactions.

The study, for instance, breaks out information by size of business and industry  on the number of firms with websites, the number of websites they have, the percentage of their product line available on their sites and percentage of business revenue derived from eCommerce.   

Of the industries studied, manufacturers led all business categories in their commitment to the Internet with 67.2% indicating they have at least one website.    Transportation companies as a segment followed, with 63% indicating they have websites.  Small retailers were next with 62.5% saying they have websites. 

Nationally, 42.7% of the respondents said they did not have a website while 47.3% said they had one website.  Another 9.1% said they had between two and ten websites and .9% said they had more than ten websites. 

Additionally, 56.1% of the small businesses with websites said they sell products and services on a company-owned site.

The SBRB / Business Today Small Business eCommerce Study is believed to be among the most comprehensive efforts recently undertaken to understand eCommerce and the reality of its impact on small businesses.   The resulting information thus provides both a snapshot on current attitudes and realizations among small business owners as well as establishes benchmarks.

Among the questions asked were:

• How many websites does your company own?
• What percentage of your product line can be purchased on your Internet site?
• How much of your sales were transacted on your Internet site(s) last year?
• Over the next 12 to 24 months do you expect your Internet sales to increase, decrease or remain the same?

Poll participants also were asked to provide information on the percentage of products and services that could be purchased on their websites five years ago as well as the correlating percentage of sales that were derived.   This data contributed to helping establish trends and historical benchmarks.

The study provides data for the all participants and also delineates data pertaining to only those businesses which have Internet sites. 

Data is included for such industries as manufacturing, construction and contracting, retail, food and beverage, distribution and wholesaling, transportation and automotive.

Business Today Magazine is dedicated to serving the information needs of owners and managers of small businesses.  The primary goals of the quarterly publication based in Buffalo Grove, Il.  are to inform and educate its readers by providing timely, useful information that will help readers both contend with the daily demands of running their businesses as well as provide insight on achieving long term growth.

The Small Business Research Board ascertains and reports the opinions of small business owners and managers on a wide variety of topics related to their own businesses as well as national and international issues that may impact their operations.   The SBRB conducts these studies for the benefit of small business owners and managers.   The SBRB also provides opportunities for third parties to gain real time insight into the attitudes of small businesses nationwide through the independently conducted research. 

The latest information about the Small Business Research Board can be found at www.biznus.net

Small Business Research Board / Business Today eCommerce Selected Results
© 2008 Small Business Research Board

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NOTE TO EDITORS:  This article is the tenth in a series on the study of small business, the Internet and eCommerce by the Small Business Research Board.   Previous releases detailed overall findings of a nationwide poll of small businesses in which nearly 97% of the respondents expect revenue generated from web-based sales to stay the same or increase during the next one to two years  --  with 29.2% of those expecting revenue to increase.  Additional releases break out the results by  size of business, geographic region, several states (New York and California) and by industry.

In addition to this release on food and beverage businesses, there will be additional releases for such industries as automotive and transportation.

*  some totals may not equal 100% as a result of rounding.

For more information about this poll, copies of the complete study and the results of previous studies or other matters related to the Small Business Research Board,  please contact Raymond D. Minkus, (847) 441-4192.