Optimism trending upwards among Canadian SMB community, but global outlook wanes
eBay Canada releases SMB Optimism Index and announces 13th annual Entrepreneur of the Year Award winners
Toronto, October 4, 2017 – Despite political and economic disquiet around the globe, eBay Canada’s second annual SMB Optimism Index report reveals that 76 per cent of Canadian retail small and medium business owners (SMBs) are optimistic about their future business prospects. Three-quarters also believe that Canada is a good country in which to run their business. In fact, SMBs overall scored 75 out of a 100-point index scale ranking their level of optimism from 0 (the most pessimistic) to 100 (the most optimistic) – one full point higher than last year, indicating an upward trend in optimism.
Like last year, results from the report reveal that increased optimism correlates with exporting; however, optimism among SMBs who export is waning this year, as this group dropped a point on the Index scale. Further, more than 40 per cent of SMB owners reported not having confidence in the Canadian government to negotiate international trade deals, like NAFTA, that will benefit their business.
“Exporting is a catalyst for Canadian SMBs looking to scale and reach their full potential, so it’s imperative that our country remains steadfast in its global approach to trade,” says Andrea Stairs, managing director, eBay Canada. “eBay is an enabling technology, giving Canadian businesses of any size, from anywhere, the ability to reach customers across the country and around the world. When enabling technologies are combined with inclusive trade measures, we create an environment of incredible opportunities for Canadian SMBs, which benefits our overall economy.”
Other factors that continue to contribute to the optimism momentum include online and omni-channel sales strategies: SMB owners leveraging these tactics are more likely than their counterparts to be optimistic across all business performance factors measured in the report. For example, these SMBs are more likely to believe that there are sales growth opportunities for their businesses both within and outside of Canada.
As for challenges, those most commonly reported by Canadian SMB owners include tough domestic competition (37%), low margins (36%) and a small customer base in Canada (34%), with more entrepreneurs reporting these challenges this year versus last year.
Similar challenges were reported by Canadian eBay commercial sellers, who were also surveyed for the report. This group of entrepreneurs indexed two points higher than the average retail SMB and reported greater participation in exporting and omni-channel strategies. These findings are exemplified by the winners of eBay Canada’s 13th annual Entrepreneur of the Year Awards – a program that recognizes e-commerce excellence in this country.
“We are thrilled to recognize and celebrate the great Canadian entrepreneurial spirit that we see through our vibrant eBay seller community,” says Stairs. “Though this year’s winners have uniquely inspirational stories, they all share the common theme of leveraging the power of e-commerce to build million-dollar businesses.”
This year’s winners are:
Entrepreneur of the Year
Vasilios Sakellaropoulos (eBay ID: UniversalDataSupplies) began selling computer printer ink and toner cartridges out of his friend and business partner’s parent’s basement. They sourced their inventory through traditional avenues and acquired customers through cold calls and telemarketing, but their low margins and customer base couldn’t turn a profit. Getting online for both sourcing and selling inventory was pivotal for them. It allowed the pair to refine their inventory strategy and leverage the secondary market while also facilitating their expansion into the U.S. – a strategy that turned their business around, quickly. Today, they run a multi-million-dollar Business & Industrial retail operation that includes multiple sales channels, a 3,500-square-foot retail and warehouse space, and six full-time employees.
Micro-Multinational of the Year
Kalina Koleva (eBay ID: RunwayCatalog) and her mother turned their passion for fashion into a full-time online business that now employs all of the women in their family. Leveraging their relationships with Canadian brands and wholesalers, they began selling moderately priced shoes and accessories to customers across Canada. However, their business took off when they tapped into international trade opportunities facilitated by online marketplaces. Today, 95 per cent of their sales are from outside of the country; Kalina and her team regularly sell to markets including the U.S., the Middle East, and Europe, and their inventory includes everything from Canadian products to high-end global brands. The success of their multi-million-dollar online business is just the beginning, as they are now leveraging some of the profits to start their own Canadian fashion label.
Integrated Entrepreneur of the Year
Three years into working for a consumer electronics refurbisher and retailer, Charles Chiu (eBay ID: Refurbio) realized that the company’s stagnant online consumer business offered a tremendous opportunity for growth. By reviving this channel, Charles understood he would be able to generate a steady incremental sales stream to compliment the company’s existing B2B-focused, omni-channel business. Leveraging online marketplaces, he tapped into key retail moments like back to school and holiday, offering highly competitive pricing on refurbished, “good-as-new” big-ticket tech items that came with full factory warranties. He also participated in online deal programs, like eBay Deals, for additional promotion and exposure of his price-competitive inventory. With continued triple-digit online sales growth in the domestic market, the online consumer channel has now become one of the primary sources of growth for the overall business, and Charles is starting to direct his efforts to increasing export sales for further growth.
Further information about the Entrepreneur of the Year Awards winners can be found at eBay.ca/eoy.
Additional key findings from the eBay Canada SMB Optimism Index include:
- Canadian SMBs’ most common reasons for starting their own business are not monetary or fueled by passion – being their own boss and having flexible lifestyles were the top reasons for becoming an entrepreneur.
- Optimism is on a considerable positive upswing in Atlantic Canada as SMBs from this region scored a 77, moving them up 5 points from last year’s bottom rank to sharing the top spot this year with Quebec and the Saskatchewan/Manitoba region. Alberta is the least optimistic region.
- Female SMB entrepreneurs are more optimistic than male equivalents, scoring 78 and 73 points on the Index scale, respectively. This gap has widened 3 points since last year.
- Millennials are the most optimistic group of SMBs, scoring 83 pts on the Index scale. They are twice as likely to believe that they can successfully compete internationally in sales than entrepreneurs aged 65+ (79% vs. 36%).
- While only 63 per cent% of Canadian SMBs sell through online channels, and only 49 per cent report selling through a company website, there is an emphasis in prioritizing online channels for 2018.
- U.S. consumers are three times more likely to see Canadian retail SMB exports than its nearest competitor, Continental Europe (31% vs. 11 %). Further, 82 per cent of those SMBs who export, do so to the U.S.
- SMBs located in urban and suburban areas (67% for both) are more likely to leverage online channels than SMBs located in rural areas (45%). However, rural SMB owners are the most likely to invest in social commerce channels.
Further findings can be found at eBay.ca/SMBOptimismIndex.
A survey of 502 Canadian small retailers with $13,000 in 2016 sales and a maximum of 99 employees and 169 eBay sellers with $13,000 in 2016 sales was completed online between July 18 to August 15, 2017 using Leger’s online panel, LegerWeb. A probability sample of the same size would yield a margin of error of +/-4.4% for small Canadian retailers, and +/-7.5 for eBay sellers (assuming 10,000 sellers), 19 times out of 20.
About eBay Inc.
eBay (NASDAQ: EBAY) is the world's most vibrant marketplace for discovering great value and unique selection. eBay connects millions of buyers and sellers around the globe, empowering people and creating opportunity through Connected Commerce. Our vision for commerce is one that is enabled by people, powered by technology and open to everyone. eBay is visited by more than 8 million unique Canadians per month (comScore Media Metrix: August, 2017). For more information, visit ebay.ca.