Small Businesses See Increased Revenue and Improved Market Reach after Moving Online; IPSOS Survey Evaluates Benefits and Challenges of e-Commerce

SAN JOSE, Calif.--()--Feb. 22, 2005--New research shows that small businesses saw increased revenue, improved business efficiencies and widened market reach after moving online, according to a recent study from IPSOS, commissioned by PayPal.

With the number of small businesses growing in the U.S. every day, many business owners are moving online to increase market presence. However, according to research firm IDC, at the end of 2004 only about half of the nation's small businesses had their own Web sites, up from about 40 percent in 2002. IPSOS surveyed 900 companies, each with annual online sales of $50,000 to $5 million and asked about the benefits and challenges found in operating an e-commerce site.

Overall, 77 percent of the small businesses surveyed said that an online presence had a positive impact on their businesses. Sixty-five percent said that the biggest benefit of accepting payments online was the ability to increase the number of customers, while sixty-four percent cited notably increased revenue and sales.

"Opening up a storefront on the Internet means that you're opening your doors to potential new customers and revenue," said Stephanie Tilenius, vice president of PayPal's merchant services group. "PayPal works with many small businesses that tell us about the power of accepting payments online, and how it helps them expand the reach of their products and services."

Nearly three out of four small businesses surveyed (73 percent) said that conducting business online enables them to receive payments faster, and 70 percent said they could conduct business more easily with e-commerce. Among online merchants that offer PayPal, 79 percent indicated that accepting PayPal allowed them to receive payments faster, and 76 percent noted it enabled them to operate more easily.

Entrepreneur magazine Editorial Director Rieva Lesonsky noted that, for any small business, cash flow is vitally important. "Paying suppliers, employees and vendors in a timely manner is critical to business growth," said Lesonsky. "Receiving money quickly from customers is the first step for keeping this process running smoothly."

E-commerce not only boosts sales and increases cash flow for small businesses, but it also helps them to operate more efficiently, according to the survey. Reductions in administrative costs were noted by 73 percent of respondents, while 62 percent of the merchants surveyed saw gains in employee efficiency after moving their businesses online.

The survey showed that e-commerce did not appear to result in a reduction in the number of employees needed to run the business. Presumably, staffing to handle increased shipping activity, keep the Web site current, ensure online security and communicate with customers required employee levels to remain the same.

Lesonsky recently wrote The Entrepreneur's Guide to Doing Business Online, a handbook for small business owners with tips and steps to follow when considering an e-commerce strategy. The guide is available for download at https://www.paypal.com.

About IPSOS

IPSOS is the fastest growing market research company in the U.S. and among the most trusted research brands in North America. With more than 1,300 professionals and support staff in the U.S and Canada, IPSOS offers a suite of survey-based services -- guided by industry experts and bolstered by advanced analytics and methodologies -- in advertising, customer loyalty, marketing, and public affairs research, as well as forecasting and modeling. IPSOS companies offer a complete line of custom, syndicated, omnibus, panel, and online research products and services. To learn more, visit: www.ipsos-na.com.

About PayPal

PayPal, an eBay (Nasdaq:EBAY) Company, enables any individual or business with an email address to securely, easily and quickly send and receive payments online. PayPal's service builds on the existing financial infrastructure of bank accounts and credit cards and utilizes the world's most advanced proprietary fraud prevention systems to create a safe, global, real-time payment solution. Founded in 1998, PayPal has more than 56 million member accounts and is available to users in 45 countries around the world. More information about the company can be found at https://www.paypal.com/.

Editor's note: Excerpts from Rieva Lesonsky's The Entrepreneur's Guide to Doing Business Online can be obtained by contacting Elin Spahr at 313-887-7209.

Contacts

Airfoil Public Relations
Elin Spahr, 313-887-7209
spahr@airfoilpr.com

Contacts

Airfoil Public Relations
Elin Spahr, 313-887-7209
spahr@airfoilpr.com