eBay’s rise in millionaire small businesses
The number of million pound businesses on eBay is set to rise by 25% this year, according to new figures. eBay expects to see 159 ‘million pound businesses’ trading on the site, with the Home and Garden, Fashion, Motors and Consumer Electronics sectors driving this growth.
Despite fears of a ‘double dip’ recession, this will be the fourth year of consecutive growth in the number of eBay millionaires. For the last full year (2010) five businesses achieved turnover on eBay of £1m in just their first year of trading, and this year, over 10% of millionaire businesses are expected to turnover at least £3m.
The Millionaire SMEs
Nearly all (98%) of this year’s millionaire businesses are boosting their sales through exports. Overseas sales from eBay’s UK SMEs accounted for £446 million of sales on the site in 2010. New figures project that 11 of this year’s millionaire businesses will see over £500,000 of revenue generated through exports, with two online SMEs projected to achieve over £1m of sales in exports alone. The top export markets for eBay SMEs are the United States, Australia, Germany, Ireland and France.
Angus McCarey, Retail Director for eBay UK said: “We’ve seen a surge of businesses starting up on eBay since the recession which shows the vital role online businesses play in supporting the fragile UK economy. Many eBay businesses including some of our millionaires are selling offline as well so their total contribution to the UK economy is even more substantial.
“Whilst the UK economy is often compared unfavourably to Germany, our figures show good reason to be optimistic. Online SMEs are growing faster on eBay.co.uk with millionaire businesses developing at three times the rate compared to Germany.
“Exports are helping to drive this success as UK SMEs benefit from the international audience that selling online gives them. There are considerable opportunities for SMEs willing to ship internationally to EU and global customers.”
Regional hotspots
London tops the list of eBay millionaire hotpots, with the highest number of businesses turning over more than £1million. Birmingham comes in a close second, followed by Nottingham in driving economic growth in the UK. It’s not just major cities breeding the most successful online businesses. Manchester is joined by Wakefield in the cluster of Northern cities, and both share joint fourth place with coastal Essex town Southend-on-Sea.
At the age of just 25 years old Danny Barenga, from Manchester, has seen his eBay shop for car parts and accessories business, PF Jones, grow to be one of the top businesses on eBay. After studying for his degree and a short stint as a coffee shop manager, Danny joined family business PF Jones in order to boost revenues by setting up online. PF Jones specialises in the sale of towbars, camping and caravanning equipment. The company's annual turnover on eBay has doubled in the last 12 months and its success online has led to the purchase of larger distribution facilities.
Danny Barenga commented: “PF Jones was an established bricks and mortar business, with four shops across the North-West and over 300 employees. I launched our eBay shop, which now employs five members of staff, to increase our customer base and profits. In the last year alone we have had to expand our existing premises to cope with the demand.
“Our ability to predict changes in the market and adapt quickly has been the key to our success. Exports are also playing an increasingly prominent role in our business model as we continue to increase our overseas sales, in particular to Europe and Australia”.
