About

The rules of running a business online have been rewritten by data-driven strategies and increasingly sophisticated digital tools. With the explosion of available online retail tools and services, small and medium-sized businesses have been able to expand beyond their geographic regions and open digital storefronts. Such businesses can reach customers through aggregators like Google Shopping or through social media channels such as Instagram; leverage infrastructure services such as Shopify; sell products in online marketplaces hosted by Amazon, Walmart, Etsy, and eBay; and partner on deliveries to customers with services like Instacart. The growth of online marketplaces in particular have made it easier than ever to do business online.

Access to the digital technologies underpinning online sales channels is more important than ever during the current societal and business crisis being caused by the COVID-19 virus. Indeed, not only have online sales been a “safety net” of sorts for many businesses whose brick and mortar storefronts have been closed, but companies who empower small business sellers – including Etsy, Shopify, Wayfair, eBay and Alibaba – have seen their stock prices soar.

Despite marketplaces being as old as commerce itself, and the growing popularity of online marketplaces among contemporary buyers and sellers, however, the impact they have on the U.S. economy has not been well-measured. The goal of this report is to estimate the overall economic value that online marketplaces provide to small and medium-sized businesses (SMBs). By conducting a systematic review of available data sets and literature, we were able to estimate the value of different ways in which online marketplaces drive revenue, increase productivity, and generate other benefits.