Selling Through Online Marketplaces Enables Small Business Owners and Entrepreneurs Worldwide to Reinvest in Their Local Communities
eBay Inc., a global commerce leader, announced the launch of its Global Marketplace Index (GMI) measuring the impact of online marketplaces like eBay in creating economic opportunities that empower small business owners and entrepreneurs.
The platform-agnostic study revealed that, for small business owners around the world, selling through online marketplaces has enabled them to contribute to keeping "Main Streets" in their local communities booming while also allowing them to feel financially secure in their venture. The results were particularly interesting in the U.S.:
Online marketplaces have had a positive impact on local communities in the United States:
+ Nearly half (44%) of U.S. small business owners say that selling through online marketplaces allows them to keep their physical stores open.
+ When store owners were asked how the additional income from selling through marketplaces has helped them, 23% responded that they were able to reinvest in their communities.
+ 33% percent of U.S. small businesses, with annual marketplace sales greater than $200K, use this income to reinvest in their community.
Online marketplaces provide U.S. small business owners with financial security:
+ Of U.S. small business owners surveyed, 77% agree the income from building an online business gives them financial security and an even higher percentage of physical store owners (89%) agree.
+ About half (48%) of U.S. small business owners have been able to get out of debt using the money they make from marketplaces.
+ 37% of U.S. small business owners say that the income from selling through online marketplaces has helped them rebuild their savings after an economic downturn, 31% have been able to save for a child's education, and 30% say they've used the money to pay their mortgage.
"It's fantastic to see that small business owners – particularly in the U.S. – are able to leverage online marketplaces, like eBay, to support their day-to-day financial and familial needs," said Marni Levine, Vice President Seller Operations and Engagement at eBay. "Since the company's earliest days, eBay has viewed ecommerce as a gateway to economic empowerment for entrepreneurs and small businesses by providing a pathway to reach new buyers online with little barrier to entry, regardless of size, background or geographic location."
The survey additionally found that the majority of U.S. small business owners (69%) claim their income has improved compared to before selling through marketplaces and over 50% say that selling through eBay or other online marketplaces expands their reach so that a majority of their sales come from outside their local community.
The GMI identifies five (5) universal dimensions as drivers of empowerment – Lifestyle Impact, Financial Security, Financial Growth, Marketplace Tools and Business Environment. To quantify performance within these dimensions, 2,500 small online business owners were surveyed across five countries (United States, United Kingdom, Germany, Australia and South Korea). Each dimension is equally weighed at 20 points, resulting in a maximum index score of 100 points.
Each country scored above 80 in the GMI, demonstrating that small businesses are greatly empowered by selling through marketplaces. According to the survey, 85% of small business owners around the world feel their online business gives them freedom or flexibility and more than 77% say their online business gives them confidence or control. GMI scores for each country are as follows:
"Marketplaces like eBay have proven that ecommerce plays an important role in empowering entrepreneurs," said Scott Schenkel, interim-CEO of eBay. "Given the critical role that small businesses play in fostering economic development and a more inclusive global society, it's essential that we continue to strengthen these businesses and their local communities, as we've done for nearly 25 years."
To create the GMI, eBay commissioned leading market research firm Euromonitor International. To read the full GMI report, please visit ebayinc.com/GMI.
Global Marketplace Index Methodology
Through 75 in-depth interviews with small business marketplace sellers, Euromonitor found that small business owners universally responded that their drivers of empowerment are the positive impacts on their lifestyles and their wallets. Furthermore, marketplaces must provide the tools and support to enable these positive impacts. Lastly, small business owners emphasized that they could only feel empowered when economic and regulatory conditions in their countries were favorable to their online business success. Based on these interviews, five universal dimensions of empowerment were identified – Lifestyle Impact, Financial Security, Financial Growth, Marketplace Tools and Business Environment.
To quantify performance within the dimensions, 2,500 small online business owners were surveyed across these countries and sharp external data points were leveraged. The Global Marketplace Index is scored on a 100-point scale resulting from an aggregation of the total points achieved in the various dimensions. Each dimension accounts for 20 points and has one or more indicators, which quantify the country's performance in the area.