Recession Fuels Surge in Internet Entrepreneurs

Recession Fuels Surge in Internet EntrepreneursThe recession has led to a boom in the numbers of first time entrepreneurs setting up small internet based businesses, according to figures released today.

PIXmania-PRO, part of the DSGi group, questioned over 2,000 customers following a surge in demand of 30% for its online reselling services. Feedback from respondents revealed that over half (57%) have been set up by first time entrepreneurs who are turning to the internet to make a living amid concerns over job stability and financial security. The research estimates that over 170,000 Brits have set up online reselling businesses in 2009.

Popular with so called "e-Bay entrepreneurs", reselling allows entrepreneurs to sell on products direct from a large retailer without needing to purchase or hold any stock first. The ability to set-up and launch a business quickly and easily and with little or no financial risks, were cited as being of the greatest appeal. Low management costs and ease of day-to-day operations were also identified as adding to the popularity of reselling by nine out of ten respondents.

Two thirds (66%) of those questioned revealed that they were also able to eliminate the time involved with delivering products to their customers by using a dropshipping service. A specialised service for resellers, dropshipping sees products delivered by the retailer direct to the end customer without any involvement from the reseller, thereby reducing the logistical and packaging complexities of the business.

Worries over job stability, reduced hours and cut backs on overtime were identified as among the key factors behind the surge in small internet start-ups. Over half (51%) of those questioned cited that they had launched their business in order to establish a second source of income. When questioned the majority of respondents, 73%, revealed they were still in paid employment but had launched the business alongside the day job. Only three in a hundred (3%) expressed any long term ambition to be self-employed.

Small electrical products such as cameras, video recorders and small screen TVs as well as computing equipment such as laptops and PCs have been identified as the most popular products sold. Twenty per cent revealed that they had turned their hobby such as photography or console gaming into a business by using their knowledge to sell products online.

Katja Felke, MD, PIXmania-Pro, comments:

“By operating as a reseller, small businesses are able to tap into all of the buying power and logistical expertise of much larger retailers. This means they can offer really extensive product ranges, fast delivery times and competitive prices whilst still enjoying a profit and none of the risk typically involved with launching a business.”

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