Amazon can positively impact small retailers

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Amazon and other online marketplaces can actually boost smaller retailers' sales. (iStock/sEASTOCK)

Just because Amazon and online sales in general are growing rapidly growing does not mean that smaller retailers are necessarily suffering. In fact, the mere existence of online sales is helping to boost the sales of smaller mom-and-pop shops.

According to a recent Insureon-Manta poll of business owners, 38% of retailers said they experienced a moderate revenue increase because of online sales while only 19% did not experience any change. And almost half of those surveyed, 43%, have experienced significant revenue growth by selling products online. 

"The most surprising finding that came out of our joint poll with Manta was the positive sentiment small businesses seem to share about Amazon’s impact on their sales," said Jeff Somers, president of Insureon. "I was surprised by this finding since it runs contrary to existing assumptions that Amazon is putting SMBs out of business."

Specifically looking at small businesses, of the 29% that sell online, 66% sell on their own company website, while 24% sell on Amazon and 22% use eBay. Other places where small businesses sell digitally include Shopify, 7%; Etsy, 4%; Alibaba, 2%; Jet, 2%; and Magento, 1%. 

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And a majority of retailers, 68%, agree that Amazon and other online retailers have had a positive impact on sales in general. 

"These results tell us that e-commerce will continue to trend upward in the small business sector," Somers said. "Business forecaster Kiplinger predicted a 15% increase in online sales this year, and our poll results confirm this prediction—81% of respondents reported that online sales are important or very important to their business’s success, with 66% using their company’s website as the primary platform and 24% currently sell products on Amazon."

Still, the report reveals that 71% of small businesses do not sell at all online and stand to miss out in the near future as the platform is rapidly growing. The U.S. Department of Commerce said that online sales accounted for 9.1% of all retail sales in the fourth quarter of 2017, compared with only 3.5% about 10 years ago. 

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"As small businesses continue to embrace e-commerce as a key way to drive sales, they will also increasingly begin to view Amazon as a valuable partner. Because Amazon’s web traffic is so high, small businesses reap the benefits of its marketing and advertising abilities—drawing more prospective customers to their products as a result," Somers added.

"At the same time, small retailers must do their due diligence when it comes to mitigating risk while selling on Amazon. For instance, we recommend they invest in product liability insurance should a customer file a lawsuit due to a defective product sold online."