New research suggests transactions between small businesses in Australia are worth $204 billion per year.
Commissioned by American Express in support of Shop Small Month, which ends 30 November, The Economy of Shopping Small: Custom Counts report reveals small businesses in Australia source goods and services from 4.4 other small suppliers each month, with an average monthly spend of $8,600 or $104,000 annually. A quarter of these businesses (24%) spent more than $10,000 per month and 10% spent more than $20,000.
According to American Express, the findings indicated the shopkeeper economy is a key driver in contributing to the economic health of small business communities and has helped increase the number of businesses in local areas. A quarter (24%) said the arrival of new businesses had made it easier to locally source products and services, a third (32%) said it has increased customer footfall and 31% said it had increased profits.
Melanie Cochrane, Senior Vice President, Small Merchant, Global Merchant Services, American Express said it was encouraging that 26% of small businesses wanted to collaborate more than they currently do and 58% were open to greater collaboration.
“If small businesses can find smart strategies to leverage each other’s products, expertise and customers they’re immediately multiplying what they could achieve alone,” she said.
“We all benefit if we can produce more precinct powerhouses – small businesses connecting and collaborating across our communities. Small businesses make a very real and important difference to their SMB community through their custom and supplier relationships.
“It’s vital that, while we encourage consumers to shop small, we also encourage and recognise merchants that champion other small businesses both locally and further afield. Behaviour like this is paramount to maintain the colour and diversity of our high streets and preserve our corner stores for generations to come.”
The findings come despite a perceived downturn in support from local consumers. The Economy of Shopping Small: Custom Counts report found more than half of shop owners (53%) said customers are becoming less loyal, while 61% felt customers were becoming less polite too. Three-quarters (72%) of business owners stated they wished locals knew how hard it was to run a small business.