Mom-and-pop retailers have helplessly stood by over the last decade as big-box merchants steamrolled over them.
Online, though, small merchants are not going down without a fight.
The number of small-size retailers selling online has swelled in the last two years, from 21 percent to 32 percent, a survey by IDC, a consulting firm, showed. Aided by less expensive and more sophisticated technology, stores like RealmDekor.com, CleanAirGardening.com and SitStay.com are competing with retailers as well as bigger sites like Amazon.
These businesses lack the huge marketing budgets of their bigger rivals, of course, but they are unearthing cheap advertising methods that, in some cases, help them compete with million-dollar promotions.
The retailer of quirky home goods, RealmDekor.com, has experienced occasional sales increases not because of catalog shipments or television commercials, but because it formed relationships with bloggers and posted its products on new "social shopping sites" like ThisNext.com and StyleHive.com.
"People started posting about my goods and it snowballed from there," RealmDekor's owner Lisa Mathisen said. "I know people think these sites are new and underground, but they're becoming more mainstream. Even my mother checks them out to find gifts."
Social shopping sites emerged last year as places for dedicated shoppers to exchange tips on popular items or designers. Tens of thousands of users list their raves and vie for trendsetter supremacy, while the site owners collect dollars for referring customers to retailers.
Gordon Gould, chief executive of ThisNext.com, said the site features hundreds of thousands of products, with a majority of the items coming from smaller retailers.
"Social shopping sites help the smaller retailers surface their products and open people up to their specific point of view," he said.
CleanAirGardening.com, an online retailer of environmentally friendly gardening supplies based in Dallas, recently began posting product demonstration videos on YouTube and other sites, along with links to the site. Lars Hundley, the company's owner, said visitors who arrive from video-sharing sites purchase goods 20 percent more often than those who come from elsewhere.
Most online shoppers are so experienced that they feel safer venturing away from Amazon to buy from lesser-known sites, said Ray Boggs, an IDC analyst.
Part of the reason, perhaps, is that the Web sites now built by many small merchants lack the amateurish feel of a few years ago.
Companies like Yahoo, Amazon and thousands of independent Web developers have become considerably better at building slick sites for merchants, sometimes within a few minutes, for less than US$100. Yahoo Store merchants, for instance, pay US$40 to US$300 a month, and a commission of 0.75 percent to 1 percent on each sale. Merchants on the Amazon WebStore pay US$60 monthly, along with a 7 percent commission.
SitStay.com, an online retailer of goods for dog owners, grew steadily since its began in 1996. It now operates from a 1,850m2 facility in Lincoln, Nebraska.
"More and more sites are coming out all the time, some with a lot of money they can invest in their search ads," Krueger said. "So we've got everything in place to handle a lot more customers. Now, we've just got to find ways to bring them to us."
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