WASHINGTON, D.C. – A report from the Connected Commerce Council (3C), a non-profit with a goal of promoting digital access for small businesses, revealed that online marketplaces provide U.S. small businesses with billions in economic value.
The report, Economic benefits of online marketplaces for U.S. based small and medium-sized businesses, showed that in 2018, online marketplaces provided $145.1 billion in economic value to small businesses. Of that $145.1 billion, $59 billion came from gains by reaching more customers and $37 billion came from increased brand exposure.
“Online marketplaces provide individual sellers and local stores access to millions of customers worldwide,” said Jake Ward, president of 3C. “And they can refer shoppers to small sellers who do not have the sophistication, marketing budget or scale to reach these customers.”
Ward added that marketplaces provide access to more customers, boost sellers’ legitimacy and give consumers more confidence than they would have with independent websites. The report also found that marketplaces add value to small businesses by facilitating customer feedback, providing cost-effective online sales, reaching more regions and reducing expansion and start-up costs.
Several U.S.-based marketplaces in the report include Amazon, eBay, Etsy, Target and Walmart.
Online marketplaces have grown tremendously in recent years, according to the report, and are competing fiercely to work with small and medium-sized businesses. Between 2014 and 2016, the 18 largest global marketplaces grew by 51.7%.
According to DigitalCommerce360, 57 U.S.-based online marketplaces grew sales 15% in 2019. Ward estimates that when data regarding online shopping during the pandemic is analyzed, it is likely that nearly 100% of shoppers will have used an online marketplace and the value to small businesses will likely surpass $300 billion.
This report was commissioned by 3C and included a systemic review of data sets and literature from government, marketplace businesses, research firms, academia and media sources.