Can e-commerce dramatically improve your revenue?
The latest figures from the ABS show a huge increase in the amount of revenue generated from online sales. How might it improve your cash flow?
In 2016, Australian businesses recorded their best figures yet for online sales, despite only 50 percent of businesses having a web presence and even fewer having an online sales platform. These numbers come courtesy of the Australian Bureau of Statistics (ABS), which recently published its report on the use of IT and innovation in Australian businesses.
How can small businesses use this data to improve their own revenue and cash flow?
Internet revenue on the up
The figures for the 2015/16 financial year show a 12.5 percent increase in revenue generated from web sales, up from $285.5 billion to $321.4 billion. This is despite only 37 percent of businesses receiving orders over the internet (an increase of just 3 per cent from the previous year). General internet presence in Australia is increasing, however; for the first time, web presence was reported by more than half of Australian businesses (50.1 percent). This means that small businesses in Australia are, albeit a little slowly, increasing their internet use.
The ABS statistics also showed a huge difference in which industries are using the internet. 76 percent of businesses in arts and recreation services reported a web presence, while the same could be said for only 12 percent of those in agriculture, forestry and fishing.
What are the revenue and cash flow advantages of online sales?
The clear increase in revenue from online sales - despite the relatively low proportion of businesses receiving orders via this medium - is a clear testament to the power of e-commerce. Although it can be a little expensive to set up at first, the boost in sales and revenue is worth the initial hit.
E-commerce allows you to reach more customers than ever, by taking away limits on geography and time that are inherent to bricks and mortar. They allow anyone to buy from you at any time, and with most online payments automatic and immediate, e-commerce will greatly improve your cash flow.
It's also much easier to track customer data online, meaning you can target your products and marketing far more easily as you'll know exactly what type of customers are coming to you.
Even when you introduce e-commerce, cash flow can still be a problem for many small businesses. Luckily, Classic Funding Group are here to help. We can provide you with equipment finance to help get your online store up and running, and our debtor finance enables you to take out a loan against your outstanding invoices, freeing up cash to help keep your business moving.