Ict, e-business and Small and Medium Enterprises

Figure 8. Ongoing e-commerce costs for SMEs in Australia, 2000  

54%

19%

9%

7%

4%

3%

3%

1%

Website maintenance

Telephony

ISP charges/website hosting

Responding to e-mails

Advertising

License fees

Bank fees

Other

 

Note: Percentage of total investment in Internet e-commerce. N = 34.  

Source: Ernst & Young (2001). 

Logistics services, e.g. package collection and delivery, also matter. While they can be 

subcontracted to private delivery services, some may charge higher rates to small businesses because of 

their location and/or small volume (Phillips, 2002). This is a real concern for small businesses, especially 

those in remote districts where private package collection/delivery services may not be available at 

reasonable cost. Items such as software, music and books can be delivered over the Internet, but the 

volume of such on-line delivery is still very small. In 2000, for example, book publishers in the United 

States derived 90% of their revenue from printed materials, while on-line materials only accounted for 

6.4%. In addition, digital delivery may not be feasible or desired by the individual or business customer 

with a slow Internet connection and small download capacity rather than a high-speed (broadband) 

connection. 

For the SME leaders in e-commerce, narrow cost factors are likely to become less important. 

They are more concerned about how to increase their profits by using e-commerce than about costs of 

adoption. They are concerned, however, about the complementary, invisible costs related to the 

management and organisational changes required for adopting new e-business strategies.