August 03, 2022

Go time: On the Doorstep of a Recession, Rural SMBs Find Success Using Multiple Selling Methods

By Hitha Herzog

It’s 5:30 am in the Village of Los Ranchos, New Mexico. For most, pre-dawn hours equate to  deep sleep. But for the rural small business owners (SMBs) of the Los Ranchos Growers Market, 5:30 am is mid-morning. Most days, the parking lot of the Los Ranchos fire station is empty, but on Saturdays, vendors who traveled from neighboring villages and towns gathered to sell their products. For these types of sellers, farmer’s markets and similar outdoor marketplaces are an ideal place to connect with customers, create a community and sell merchandise. 

According to a new report published by the Data Catalyst Institute (DCI) about rural SMB sellers – just like the ones at the Los Ranchos Growers Market – the typical SMB seller uses three or four different methods for selling products to consumers. According to the study, their most popular sales methods are: business-owned web stores (57% of rural SMBs use), online marketplaces (also 57%), brick and mortar retail stores (53%) and offline marketplaces such as farmer’s markets, antique shows and similar in-person gatherings (47%). 

For many of the vendors at the Los Ranchos Grower’s Market, such a multi-method approach is crucial. Take for example Pamela Armbrecht, an artisan vendor located in Los Ranchos who I met recently. Her quilting business, PamsQuiltsandMore, has multiple revenue streams that include her modest vendor stand where she meets customers in person at the Los Ranchos Growers Market (offline marketplace) and a digital storefront on Etsy.com (online marketplace), where at the time of writing, she has 60 products listed for sale and customers located far away can buy them. The DCI report notes that 33% of rural SMBs say such online marketplaces are effective for them selling over long distances (36% say a business-owned web store; they aren’t mutually exclusive).

The ability to sell merchandise via online marketplaces and business-owned web stores requires the business to have an internet connection – hopefully a good one. The need was so dire for South Boston, a rural town in southern Virginia, it leveraged partnerships with Mid-Atlantic Broadband and Microsoft TechSpark Virginia to create the SOVA Innovation Hub in 2020, a non-profit organization. The 15,000 square foot hub focuses on entrepreneurship and digital skills training, access to technology experts, and is home to coworking and meeting spaces. The town – once reliant on tobacco for its main source of income – now hosts a thriving main street with small businesses ranging from flower shops and caterers to homewares and gift stores.

Thinking about fiber optics and broadband internet is critical as local, state, and federal government agencies focus on U.S. economic recovery post-COVID and the role of small businesses as part of that recovery, as SMBs account for 44% of all U.S. economic activity. Dave Cline, founder of Piedmont CMG, a Ware Shoals, SC-based plastic component manufacturing company, experienced the lack of growth due to insufficient access to connectivity. “The company was growing, but we could not reliably communicate with our (global) customers … because of either insufficient or unreliable service,” said Cline in an interview with the Greenville News. Orders were coming in and business was brisk, yet dozens of jobs hung in the balance for a rural S.C. manufacturer l because of lagging internet speeds.

As the U.S. sits on the doorstep of a recession, rural small businesses must go into offensive mode in order to sustain revenues and move product. The good news: with several methods of selling products, rural SMBs will have an easier time accessing customers in different markets of the U.S. and around the world. 

Hitha Herzog is Chief Research Analyst at H Squared Doneger TOBE and a Data Catalyst Institute Retail Fellow. 

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