Online trade isn't what's killing the high street

eBay’s Autumn Online Business Index quashes the rumour that online sellers are single handedly responsible for decimating the high street. Almost half of online businesses also have a bricks and mortar presence and 4 out of 5 bricks and mortar firms believe the introduction of online trade has saved their businesses rather than harmed them.

Complementing Bricks and Mortar

Andrew Rowson who took over his high street family business selling towbars, cycle carriers and roof bars in 2003 is one who’s business was saved by the Internet. Taking over from his father he spent a year of struggling to grow his business before he decided to open an online shop. In addition to his bricks and mortar business he’s added over £1.2 million per year turn over on the Internet.

Andrew calls it “the best of both worlds”. Adding an online presence meant that they could retain the physical shop and keep the business alive. The business was founded by Andrew’s father Roland and has been in their family for decades but was struggling to remain competitive. Rather than contributing to the decline of the High Street, the Internet is helping to keep businesses like Andrew’s afloat.

Online businesses shun the city

Rural areas are particularly well represented in the online world. 44% of online businesses are based in rural areas but only one in five online traders are city based.

The Internet is enabling people living in the countryside not only to attract more customers than they could with a bricks and mortar business, but is also stimulating and boosting rural UK economy. Lets face it there’s not a lot else to do in the countryside and jobs are few and far between these days. It shouldn’t be a surprise that the Internet is enabling people living in the country to kick start a new career in online selling.

Vat change didn’t help us, but please don’t put it back up

VAT is due to change again on the 1st January and three quarters of businesses want VAT to be held at 15% in 2010. Last January eBay found only 17% expected a VAT cut to help their business, but ten months later 42% found it had made a difference.

Over half still say the VAT cut made no difference at all suggesting that opposition to a VAT increase on New Years day is more about the timing. Rather than feverishly revising prices with Auld Lang Syne ringing in their ears, the New Year is traditionally the time for businesses to hold sales. Consumers will be looking for bargains in January and the last thing they’ll expect to see are price rises due to a VAT increase.

The economic outlook for sellers

69% of business expect sales to rise over the next three months, three quarters of businesses expect prices to remain stable and about the same expect to grow their profits, or at the very least protect margins and remain stable.

Just over half of online businesses expect a stronger Christmas trading online and are ordering more stock than last year.

The full Online Business Index is available for download as a .pdf document.