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Small business online spend on the up

Small business online spend on the up

Growth in online spending by small businesses remains strong and is growing.

Detailed in a new report, "US Online Small Business Market Category Forecast, 2007 to 2012," the total online expenditures by small businesses is expected to top $70 billion by the year 2012, up from $47 billion in 2006.

The number of small business that buy online will grow at a compound annual growth rate of 4.3 percent through 2012, driven mostly by the growth in the number of small businesses overall as their online buyer penetration, currently at 71 percent, is relatively mature.

JupiterResearch Analyst and lead author of the report, Sonal Gandhi, said, "While technology manufactures are reluctant to push the online channel over others, retailers will continue to promote the online channel as it provides them better margins.

"Growing competition among online retailers for small business spending will in-turn put pressure on them to offer promotions and incentives leading to higher conversion online."

According to the report, small businesses will continue to find value in buying online either through convenience or better prices or variety.

As relationships with online suppliers mature, small businesses are likely to provide them with greater portion of their business.

President of JupiterResearch, David Schatsky, said "In addition, 82 percent of small business decision makers research products or services for their business online, monthly or more frequently.

"Companies should therefore make driving and tracking the influence of online on off-line sales an important part of their strategy."

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