Australian Small Businesses Are Performing Well Despite Perception Problem

Image by Neil Theasby

Australian small businesses have made financial gains this year but continue to struggle with consumer perception that they're gradually dying off. As such, consumers are flocking to shop with bigger companies, according to new research. Read on to find out more.

American Express recently commissioned a survey into how small businesses are tracking this year and how consumers perceive them. Small business in this survey include bricks-and-mortar stores, digital start-ups and online-based stores. The study showed that while consumers said they value small businesses, they're not putting their money where their mouth is.

Around 78% of respondents said small businesses have had a positive impact on their lives but only 37% increased the number of times they've shopped with them in the last 12 months. Yet, 61% have increased spending with large businesses. One in five respondents decreased the number of trips they made to small businesses in the last 12 months, while less than 1 in 12 reduced their number of trips to large outlets.

It could be that consumers see small business as a dying sector. According to the survey, 83% of consumers believe small businesses shut down faster and 71% said there appear to be fewer small businesses around. But 85% of small businesses have reported that they are in a better or similar financial situation as they were last year. One in five Australians are also looking to set up their own company.

"With more than 2.1 million small businesses employing more than five million Australians, the sector accounts for 97 per cent of all Australian businesses. It just makes good sense to have a thriving small business scene in our country and to ensure Governments, consumers and Australians support it as best we can," Federal Small Business Minister Michael McCormack said.

American Express vice-president for small merchant Katrina Konstas:

"We all have a stake in their success, whether it's preserving a sense of community or providing a family member or friend with employment. Investing in their future is investing in your own and Australia’s, whether you want to run your own small business, work in one, or shop at many."


Comments

    My personal experience is small Australian businesses are not competitive in general.
    Yes, there are savings with purchasing power, but in general, this is not the problem.

    when you can buy X item overseas, and post it here, and it still comes below the price of a large business. that means, there is still profit to be made by small businesses.
    However, they usually don't take that route, and just charge more, as being competitive is not their thing.

    However, some businesses have caught onto this. I usually buy from a shop that sells electrical goods consistently priced below bunnings, they're aware of it, and make it their thing.

    hopefully the blurb above makes sense

      Small business is also more than just retail.

    Kanga you are a thrifty person. I think what you are seeing are small businesses that are small in the sense that they have very few employees and cannot justify more because of their turnover. So they simply do not have the time to seek out the best deal, especially if they have a shopfront to service. They are happy to pay up for delivery etc. They also find that some customers are willing to pay a premium for convenience or service and product range or knowledge. Don't get me wrong I am with you most of the time.

    Have you noticed that there are a lot of people on eBay who are shipping from Australia the same sort of items that you typically get from Hong Kong or China. Sometimes they are only little bit more but you know you won't have to wait 30 days for the post. They probably source their stock from Alibaba or contacts they have in China. So I think there are people out there doing exactly what you are suggesting. I also see this happening in the shopfront with bathroom, furniture shops. Some of these are lower quality items but with a price to match.

    I think what you are seeing and questioning is the established shops not jumping on this. I don't know but, and I am guessing here. If they get their stock from a local distributor and there are returns, the manufacturer with cover the whole cost. If they parallel import they might just get shafted and take a massive loss. If they have a shopfront or an established business they can't close up shop and start under a new name like the guy on eBay.

    We are in a mentality where we are all poor struggling "battlers" but fact of the matter is for the most part weren't not doing too badly.

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