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Financial: Britain's online traders join eBay millionaires' club: Number of UK firms with pounds 1m turnover doubles: Top 11 performers record annual growth of 300%(Guardian (UK) Via Acquire Media NewsEdge) EBay has declared that Britain's small businesses have "come of age" online, after reporting that the number of its traders who are turning over pounds 1m a year had nearly doubled over the last 12 months. Data released by the e-commerce site today showed that 127 companies are on track to achieve a turnover of at least pounds 1m during 2010, compared with 66 in 2009. Seven of the companies only started selling goods on ebay.co.uk this year, and 11 are increasing their turnover by more than 300% annually. While the economic downturn has pushed many small firms to the wall, it appears that a small army of one-man-bands or family entrepreneurs are profiting by selling goods online. Jody Ford, eBay's director for small and medium-sized enterprises (SMEs), hailed the small companies that are defying the "economic uncertainty" and competing with high-street names. "It is tremendous to see this surge in the number of thriving online SMEs and start-ups at a time when the rest of the economy has been struggling," he said. About 25,000 people have launched some kind of business on eBay since the recession began, so the 127 members of the "millionaires' club" remain a small fraction of that total. Ford, though, argues that the low cost of entry and access to many millions of online shoppers mean that it is possible to enjoy rapid success in e-commerce. "The success of these million-pound businesses should encourage all entrepreneurs, from those with a long-standing business plan to graduates or school leavers with a great idea, as it shows that if you have a good business model and understand the demands of your customers you can be an overnight success," Ford said. EBay's data also shows that these fast-growing companies are usually avoiding the danger of burnout. Only eight of the 66 companies who turned over pounds 1m last year have seen a drop in revenue this year, despite the austere economic climate crimping consumer spending. Ten years after the dotcom boom imploded, e-commerce appears to have matured into a stable industry. Owen Thomas, executive editor of technology blog VentureBeat, predicted this week that several US start-ups will seek to float in the next few months. "With all the inefficiencies of traditional retail, there's plenty of ground for socially networked, internet-driven innovators to seize," Thomas argued. "E-commerce, inheriting the healthily chaotic traditions of the bazaar, is quietly thriving." Britain's eBay successes are unlikely to get as far as a flotation, but the leading players are enjoying rapid growth. Warren Blayds of Oldham set up Online4baby five years ago, swapping a "mundane office job" for a life selling prams, cots, play mats and other items that litter the average nursery. Although Blayds and his family already had a business selling discounted nursery products, they have shifted the whole operation online. It is now the biggest site of its kind on ebay.co.uk, with turnover of pounds 4m expected this year. Online4baby has not been immune to the downturn, however. Blayds admits that he has had to "take stricter purchasing decisions" since 2007, and also cut prices to remain cheaper than discount offers on the high street, indicating the extent to which price wars between major bricks-and-mortar retailers can also affect much smaller online rivals. Another successful eBay firm, Merseyside's Valatech Computers, is profiting from the ability to list huge numbers of products online. It sells 20,000 different items, but founder David Hayward wants to raise that to 90,000. The importance of online shopping was further illustrated this week when credit card provider MasterCard agreed to pay pounds 333m for Britain's DataCash Group, which offers fraud prevention and electronic payment services. "E-commerce represents an important part of MasterCard's growth strategy," said Ajay Banga, president and chief executive of MasterCard. Although eBay is Blayds's sole source of income, other traders are selling their goods through a range of outlets - either their own websites or other electronic marketplaces such as Amazon. EBay traders are at the mercy of the feedback supplied by their customers. Valatech has a 96% approval rating, while Online4baby's rating is currently 99.6%. Such ratings can make or break both online businesses and traditional ones, according to Richard Holway, chairman of technology analysts TechMarketView. "I've been in a number of restaurants recently where I've been told that, if I enjoyed the meal, they would very much appreciate it if I wrote a customer review on their website," he said. Captions: Nursery products retailer Online4baby expects turnover of pounds 4m this year, despite the downturn, and is the biggest site of its kind on eBay's UK website Photograph: Rex (c) 2010 Guardian Newspapers Limited. |