Economic & Environmental Benefits of Selling Online

Ecommerce is still the fastest growing channel and primary sales driver in the retail industry.  There are so many economic and environmental benefits, it is no wonder the ecommerce world is growing so fast.  The Internet opens up the entire world as a marketplace.  Not only is ecommerce beneficial for retailers, it is also economically and environmentally better for the US and the world at large.

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Lower Trade Barriers Mean Higher Success Rates for Start-Ups

Online business provides lower trade barriers, a larger market share, and a better chance of long-term success than offline business.  Ecommerce reduces trade costs by 60%, as compared to offline trade, according to a study sponsored by eBay.  Due to these lower trade barriers, small online retailers are able to extend their reach to international markets.  Even new ecommerce retailers have a higher market share than offline businesses due to the lower trade barriers and the international reach.  Survival rates for ecommerce businesses, both big and small, are higher than offline businesses due to these added benefits of selling online.  The online marketplace has leveled the playing field for small businesses by enabling market diversification and global reach for merchants of all sizes.

A Sustained Economic Growth Environment Makes for Increased Consumer Welfare

A report by Forrester shows the magnitude of ecommerce as a part of our economy. “The business-to-business (B2B) ecommerce economy will reach $559 billion by the end of 2013, with business-to-consumer (B2C) ecommerce reaching $252 billion.”  Total ecommerce sales are expected to reach 1.298 trillion this year, according to eMarketer.  By having lower barriers to entry, the business climate encourages smaller businesses to compete against large corporations.  This produces a sustained economic growth environment, which will lead to more business competition and lower prices for consumers.

Green Ecommerce: It’s Good for the Environment

Ecommerce is not only great for the economy, it is also eco-friendly.  Ecommerce maximizes transportation efficiencies, reducing carbon admission, since buyers and sellers can purchase or sell from their own homes.  Delivery services, such as UPS and FedEx, are more efficient than individuals driving empty cars to and from a physical store. Approximately 65% of total emissions generated by the traditional retail model stemmed from customer transport, according to CMU. Without a brick and mortar store, online retailers are dematerializing the retail process.  Unnecessary uses of manufactured materials can be avoided with online retail. According to a study conducted by Carnegie Mellon University, online retailers use 30% less energy than traditional retail operations. Another study published by ACI found that ecommerce would achieve a net reduction of 1 billion tons of greenhouse gas emissions, constituting 11% of US annual oil imports.

Ecommerce is Sheltered from Economic Decline

Even during economically unstable times, ecommerce continues to be successful.  Despite a slow economy, ecommerce revenue continues to grow faster than brick-and-mortar retail stores.  There is a unique umbrella that covers the ecommerce market, which actually protects it from economic downpour.  Rob Wight, CEO of Channel Intelligence, said, “What consumers really want in a difficult economy are options. Ecommerce satisfies that desire because shoppers have the opportunity to choose from an almost endless supply of products, brands, styles and price-points.”  Ecommerce offers shoppers lower prices and a social shopping experience, which can be leverage to accelerate growth, even during difficult economic times.

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Ecommerce is Good for the Planet and the Economy

The shift from offline to online sales doesn’t show signs of stopping and the economy will be impacted by the subsequent sales.  Ecommerce boosts the overall US economy by increasing competition, lowering prices, and increasing productivity, creating a downward pressure on inflation.  Likewise, the ecommerce world is eco-friendly since it dematerializes the retail process and uses economically efficient delivery services.  As ecommerce continues to grow, economic and environmental benefits are sure to follow.

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