New Study: Online Sales Fuel Rural Small Business Growth and Optimism

Washington, DC (July 14, 2022): A new study shows that small rural sellers may be the greatest beneficiaries of the many innovations in online selling. A survey of 1,000 rural sellers, commissioned by the Connected Commerce Council, shows that the most popular sales methods for rural small sellers are online marketplaces (57%) and web stores (57%) and all online sales, including through social media and apps, accounts for 56% of rural sellers’ overall revenue. This is in contrast to small sellers generally, who sell mostly through brick-and-mortar (79%) and wholesale (78%). 

Small rural sellers are also getting more of their revenue (23%) from online marketplaces like Amazon, Etsy, and eBay compared to the typical small seller (17.5%). In addition, the survey found that there is fierce competition between online marketplaces for rural small sellers’ business. Though Amazon is rural sellers’ most popular marketplace (33%), eBay (30%), and Etsy (24%) follow closely.    

“We operate our small business from rural Iowa, but most of our sales are online,” said Joel Roodman of Logic Products in Fairfield, IA. “We started our business on the Amazon Marketplace, and our success caught the attention of other marketplaces like Walmart, which asked us to sell there. Now we’re also in Walmart stores and online stores like Chewy. Our path to success would have been much rockier and slower without Amazon’s marketplace as our launch pad.”

Small sellers like Joel are concerned that Congress is going to force companies like Amazon, Google and eventually Walmart to change how they operate, by making easy-to-use, affordable digital tools and marketplaces more expensive and less efficient. The American Innovation and Choice Online Act (AICOA/S.2992), led by Sen. Amy Klobuchar (D-MN), and Rep. David Cicilline (D-RI), would force large companies like Amazon and Google to break apart integrated products and services that provide effective and affordable tools and services to rural sellers, such as Fulfillment-by-Amazon (FBA), or Google Ads + Google Analytics. 

“Online selling and digital tools have created tremendous opportunities for rural small sellers,” said Rob Retzlaff, 3C Executive Director. “Sen. Klobuchar, Rep. Cicilline and other supporters of S.2992 are ignoring these facts because they are hellbent on imposing their will on four successful companies no matter how much it will hurt rural small businesses.” 

Additional takeaways include:

• The typical rural seller (59%) uses at least three sales methods to sell their products
• Among the smallest sellers (10 or fewer employees), 49% use at least three sales methods
• 46% of rural sellers sales are made outside of their immediate area
• Business-owned web stores (36%) and online marketplaces (33%) are the most effective ways to sell products outside their local area.

Methodology:

The survey of 1,000 U.S.-based small- and mid-sized businesses (SMBs; <500 employees) drawn from the general population that sell physical products/goods to businesses and/or consumers was conducted between March 25, 2022 and April 13, 2022 with margin of error of +/- 3.1% on the overall sample. Potential rural respondents were selected from the panel based on known geographic and demographic variables, such as primary location of business and location of primary residence.