Australian SMEs off online selling pace

Australian SMEs off online selling pace

Small businesses in the US appear to be showing a greater willingness than their Australian counterparts to adopt the Internet as a valuable online selling tool.

According to IDC research, small businesses are connecting to the Internet in increasing numbers and, as a result, are getting a chance to compete against large businesses. The survey, which polled 1011 organisations with fewer than 100 staff, found that 36 per cent of small US businesses that plan to go online expect to use the Internet to sell products.

Warren Childs, research manager for IDC's small business market program in the US, said there appears to be a payoff for small businesses that use the Internet, with their revenues averaging $US3.79 million compared to $US2.72 million for those organisations that do not use the Internet.

However, when recently questioned about their plans to embrace Microsoft's NITRO online software sales outfit, some Australian resellers suggested that setting up Web sites with the necessary back-end connections would cut margins and increase overheads.

Tony Finnemore, managing director at Sydney-based VAR Micro Office, said the online selling capabilities needed for NITRO, for example, would not be achievable for very many smaller retailers.

He told ARN the 3 per cent charge from credit card transactions and the costs in setting up and maintaining a Web site would cut already thin margins to the point where it is not worth the effort.

The closest thing Australia has to an online sales success story at this stage could be Sydney-based Harris Technology.

The company has been accruing sales from its Web site since September 1996, currently averaging in excess of $300,000 per month.

"We are very interested in the concept and I have been keeping an eye on it," said Ron Harris, the company's managing director.

"We believe in Internet commerce and think it is a fait accompli. It is not a question of whether it's a good idea or not, but it does have to be done properly."

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