A survey of online small businesses reveals the majority of e-commerce entities have been impacted by the down economy, according to Web hosting company Midphase.
Web hosting company Midphase
announced the results of a survey of 3,000 of their customers, revealing nearly
60 percent of their small and midsize online businesses had been
affected by the recession with 58 percent indicating a revenue drop from
between 5 percent to more than 60 percent. One of the main reasons, cited by 46
percent of this group, is the challenge in finding new customers.
Midphase currently hosts more
than 120,000 Websites. The company's general manager, Marc Bollinger,
statistics indicate that many people are dealing with the recession by
new revenue streams specifically through online businesses. The survey
that 60 percent of respondents are supplementing their existing income
with a Web presence. Bollinger said this fact is supported by the
finding that 47.7
percent claim that their Web presence will represent less than 10
their income. "We feel this is a true cross section of American
users," he said.
Generally the respondents
felt their online initiatives would grow over the next 12 months, with 56
percent predicting a 5-10 percent increase, 20 percent predicting a 10-20
percent increase and 12 percent predicting a 25-50 percent increase.
"People are going online to make money," he said. "A motivated individual
can have a new business up and running in a matter of days; and we're providing
the tools to do it. Seventy-one percent of the respondents said they looked at
three or more hosting companies before selecting Midphase and 70 percent
claimed that our products and services were important to the success of their
businesses." Of those surveyed, 46 percent
said their e-commerce or Web-based business was their first, while 54 percent
had previous experience in the e-commerce environment. Sixty-seven percent of
respondents had been operating online for three or more years, with 10 percent
having just started, 8.4 percent said they had been in operation for a year.
Interestingly, 41.6 percent of respondents said revenues had not dropped when
compared with last year's revenues. Marketing followed difficulty finding new
customers on the list of challenges online entrepreneurs faced when starting,
coming in at 29.4 percent, while finding suitable technology solutions placed
third with 18.6 percent. Finding suitable vendors placed fourth on the list of
challenges with 5.8 percent. When asked what online businesses expect from
their hosting company in terms of enabling business, 44 percent listed
accessible customer support, 17.6 percent said data tracking and 19.4 percent
listed marketing tools. E-commerce solutions and social networking tools placed
fourth and fifth, with 14 percent and five percent, respectively.
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.