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SMEs fail to take advantage of ecommerce
Even though it's cheaper than ever to set up

By Tim Ferguson

Published: Monday 15 January 2007

Ecommerce is more profitable and affordable than ever before - though few SMEs are taking advantage of it, according to new research.

Last year, 90 per cent of companies with ecommerce operations said their site was profitable - up from 70 per cent in 2005 - an all-time high.

In addition, the cost of setting up an ecommerce service was around 40 per cent lower than expected, according to the survey commissioned by software company Actinic.

Set-up costs for an ecommerce service were £1,585 on average, compared to the £2,416 predicted.

But although the proportion of businesses using ecommerce rose to 11 per cent in 2006 (from eight per cent in 2005), the majority of SMEs surveyed have yet to embrace online selling.

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Actinic CEO Chris Barling said considering how easy it is to set up a web store, "there is no reason not to take the plunge".

The survey also revealed that, of the companies that don't already operate an ecommerce service, 20 per cent are planning to start.

Of the remaining companies, two-thirds are still not planning to introduce ecommerce, with 10 per cent stating they were unsure.

The main reasons cited for ignoring ecommerce were the unsuitability of products (38 per cent) or a lack of demand (17 per cent).

The survey consisted of interviews with around 600 small to medium-sized businesses.