The rise of e-commerce through COVID-19
While the effects of COVID-19 has seen many small to medium-sized businesses (SMEs) fall into unprecedented times, e-commerce has been a welcomed safety net for many.
The acceleration in online shopping over the last few months has been gargantuan. Australia surpassed its three-year prediction on e-commerce implementations in just three months.
In 2019, Australia Post forecast 12 percent of consumer spending would be conducted online by 2021. The digital seismic shift brought about from the pandemic saw that prediction surpassed in March 2020. By the festive season in December, they anticipate it will jump to over 15 percent.
Over a million more households shopped online in April 2020 than they did in April 2019. More than 200,000 new shoppers in that month alone entered the market and purchased something online for the first time.
When Victoria plunged back into a stage three lockdown during July, e-commerce spiked 118 percent, making it one of the most significant months for online shopping in the state’s history. With the announcement of stage four restrictions, they increased another 16 percent.
Victorian logistics operations for online providers could barely keep up. Given residents were confined to their homes, the volume of e-commerce parcels travelling around Melbourne jumped 80 percent in one week.
This overdrive in online sales has been a lifeline for thousands of businesses across Australia and is breathing life back into our economy.
A recent Deloitte analysis revealed Australia Post’s e-commerce activities during the three months from March to May – our initial COVID peak – facilitated an additional $2.4 billion in online orders compared to the same time in 2019. Australia’s remote and regional communities accounted for almost a quarter of those transactions.
It saw parcel deliveries increase by 26 million in that time on the 2019 figures. Australia Post directly contributed more than $1 billion to our national economy. Importantly, those extra deliveries also generated an additional $747 million in flow-on economic activity throughout other industry sectors.
Given the likelihood that social distancing will remain a part of our lives for some time, it is predicted customers will continue to buy online via e-commerce portals. Australian SMEs are looking to capitalise on these changing shopping habits and snare more shoppers in their digital web.
For those who haven’t begun selling online, the hunt is on for the right e-commerce solution for their business. Online marketplace searches increased significantly by 84 percent between January and July 2020; a clear sign many SMEs have not yet digitised their sales capabilities.
Frantically trying to find an e-commerce solution in order to sell online is just the tip of the iceberg for SMEs. Most standard e-commerce portals contain hidden transaction and referral fees. These fees are the submerged part of the iceberg most small businesses don’t see, and they can do financial damage over time.
Spenda can help you get your products online, build your site, and avoid the arbitrary restrictions and hidden online merchant fees behind common e-commerce platforms.
The hidden e-commerce merchant fees for SMEs
During their scramble to start selling online, many Australian SMEs jumped on transaction fee-based marketplaces, such as eBay or Amazon, which allow you to list items among other sellers to large online audiences.
eBay experienced its highest number of visits over the last three months, hitting 289 million website visits with 57.2 percent growth. Amazon saw 107 million website visits in the same time, a 90.49 percent surge.
While they’re popular and can increase exposure, many e-commerce providers charge a referral and merchant fee on every sale, varying on the number of listings, category and value of items. Merchant fees usually sit at around one dollar per unit sold, with the additional referral fees generally between 8-15 percent.
For SMEs who can potentially sell large volumes of products online, these fees can pack a financial punch over time. These fees don’t include additional monthly payments from using the platform, which can vary between around $29 to $299 per month, depending on the selected plan.
These financial restraints might make it more cost-effective for you to choose an e-commerce platform integrated into your own custom-built website, such as those available to design with Spenda.
Not only can Spenda easily integrate your business data to your preferred e-commerce portals such as WooCommerce or Neto, but you can also build your website quickly and seamlessly, promote your brand and provide more opportunities to upsell.
How to save money selling online with Spenda
Spenda’s e-commerce transaction rates start at 1.5 percent + 30cents for domestic orders and 2 percent + 30cents for all online transactions. Many of our competitors have card processing fees of around 2.9% + 30¢ for all online transactions.
That means if you processed one thousand sales online with each item priced at an average of $50, you would be losing $1,300-$1,800 in transaction fees.
Given more SMEs are turning to e-commerce to recover lost sales, ensuring you aren’t leaking valuable income through inconvenient fees is now crucial.
Smoothly transitioning your products from a brick-and-mortar store to an online portal sounds complicated, but this implementation is quick and seamless with the right provider.
Ensuring your e-commerce portal integrates with a flexible payment solution that accepts more payment types such as SpendaPay is important in allowing you to attract and retain customers.
Credit Card fees usually range between 0.1-1 percent of the total transaction. While no retailer or supplier wants to see their potential profits deducted from sales, the overall net gain from accepting more card payments far outweighs the cost of merchant fees. It’s why elite integrated e-commerce payment software such as SpendaPay can save SMEs thousands of dollars in fees each year.
Our inventory management tool, SpendaStock, can also integrate with your e-commerce site in real-time and enables you to view, coordinate and update stock prices, numbers, bundles, descriptions and promotions in seconds.
We integrate all transaction data with financial systems such as MYOB Account Right Live, Xero and Quickbooks Online in real-time for more efficient reporting and automated reconciliation. Helping you avoid manual data entry to keep you focused on satisfying your digital customers.
The e-commerce bandwagon is building momentum, prepare yourself for the digital journey using the cheaper, more flexible e-commerce portal with Spenda.
Want to start selling online and have us build your e-commerce site?