20/03/09 - Online Businesses Are More Profitable

The results of the survey, conducted In November 2008 by Sweeney Research for the Sensis Quarterly Business Index on behalf of Netregistry and Nett Magazine, showed that online business promises to be far more resilient and should see substantial growth through 2009.

What the survey reveals about online business as characterised by Netregistry customers versus the wider small business community?

• Online business owners are more confident about their business prospects in 2009. 46% versus 13% - 3.5 times.
• Online businesses are more likely to be planning expansion in 2009. 57% compared to 39%
• Online business performance indicators are higher. In all key areas – including sales, profitability, capital expenditure and employment.
• Online businesses are twice as likely to export. 28% compared to 15%
• Online businesses are more profitable.
  • Twice as likely as the average SME to be earning between 51k-100k
  • As likely as the average SME to be earning between 101k-500k
  • As likely as the average SME to be earning between 501k-1m
  • Three times as likely as the average SME to be earning over 20m

With significant year-on-year growth in online sales in 2008, particularly in the final quarter leading up to Christmas*, online business seems to be defying all the economic trends, as Bloch explains. “As budgets tighten and families stay home more, they are turning to the internet to find bargains. With fewer overheads, online stores often deliver more competitive prices than some major high street stores and consumers have been discovering the convenience of shopping without leaving the house.”

Netregistry expects to see a rise in the launch of online stores in 2009, with traditional retailers tapping into the online revenue stream and new businesses taking advantage of the low cost of internet business.

* The Interactive Advertising Bureau announced a 27% growth in online sales in 2008 in a report compiled by PricewaterhouseCoopers, published on Feb 9 2009. The 4th quarter also demonstrated 22% growth over the same period in 07, despite the downturn.

 

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