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Online Sales Hit High, But Some Businesses Still Lag

Online Sales Hit High, But Some Businesses Still Lag

Australian businesses are pulling in record amounts through internet sales, with income obtained from online orders in 2015-16 totalling $321 billion, up nearly 50% from $286 billion in 2014-15. The figures are exploding as more and more business across a variety of industries establish online ordering systems to speed up sales.

Even so, the majority of businesses are lagging well behind in the race to boost online revenue, with the ABS data revealing just 37% of businesses received internet orders in 2015-16. That means 73% of Australian businesses are missing out on selling online, even though this can dramatically boost revenue.

Some sectors stand out for having higher levels of online sales. In the wholesale trade sector, 63% of businesses received orders over the internet in 2015-16. In the manufacturing sector, 58% of businesses sold their products over the internet.

That compares to 34% in the accommodation and food industry, 28% in real estate and just 22% in the transport and logistics sector.

Surprisingly, the information and telecommunications sector didn’t do as well as manufacturing with just 48% of those businesses receiving orders over the internet. So even in the IT sector, improvements can be made to boost the level of online sales, which can dramatically improve revenue.

These numbers highlight that many Australian businesses are not as digitally friendly as you might think. While some businesses have introduced fully automated digital ordering systems, many still lag behind and could benefit by moving online.

Cash flows more quickly online

One of the most important advantages of an online ordering system is that it magnifies your customer base. That is, the number of potential customers you can reach is multiplied dramatically. Having only a physical store or physical ordering system limits the number of potential customers you can reach.

In addition, you can compete better with larger businesses by being open 24 hours a day, seven days a week, thereby increasing sales opportunities. You’ll also be able to reduce processing costs by automating your sales, receive payments more quickly from online transactions and improve your offerings using data from online customer purchases.

It’s true that creating a fully automated online shop tailored to meet your precise requirements could be expensive. But any business looking to increase its sales can take the first step by researching and investing in an online ordering system, and ensuring its website supports such a system.

Whatever form of online shop you choose, it's important to take a strategic view and research your investment and audience to make your online offering easy to navigate and attractive to your customers.

Websites not always up and running

The ABS data reveals a web presence was reported by half of all Australian businesses. That means that one in two still do not have a website.

Small business lags behind big business despite the benefits of an online presence to boost your brand. For small businesses with up to four employees have a website. That rises to 61% of businesses with five to 19 employees. In contrast, 82% of businesses with 20 to 199 employees had a web presence. That rises to 94% of businesses with 200 or more employees.

By industry, arts and recreation services had the highest proportion of businesses with a web presence (76%), while the agriculture, forestry and fishing sector had the lowest proportion of businesses with a web presence (12%).

During the year ended 30 June 2016, over half of all businesses placed orders via the internet (57%). The IT sector led the way at 76%, followed by the manufacturing sector at 70% and professional services at 69%.

More than a third of Australian businesses had a social media presence (38%), up from 34% in 2014-15 last year. The highest proportion of businesses with a social media presence was recorded in the 200 or more persons employees (81%) followed by businesses with 20 to 199 persons employees (63%).

This may be an indication that Australian business has finally worked out how to safely use social media to build their brands. The ABS data reveals the arts, IT and retail trade lead in their use of social media to promote their businesses, while the transport and utilities industries lag well behind.

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