CONTRASTING E-COMMERCE BUSINESS MODELS: PERFORMANCE IMPLICATIONS FOR SMALL ENTERPRISES

Pure plays use the Internet as a market entry strategy, and brick and clicks use the Internet as an alternate channel of distribution. Theoretical frameworks from entrepreneurship, marketing, and electronic commerce are used to explore performance differences between these business models. This study uses a geographically diverse sample of 240 small enterprises engaged in Internet-based consumer marketing. Results suggest brick and clicks enjoy performance advantages over pure plays in international revenue growth. Higher Internet promotional expenditures positively impact revenue growth. Firms using the Internet for sales transactions experience negative profit expectations and revenue growth. Firms using the Internet for product distribution experience significant international sales growth. Product depth influences profit expectations and domestic revenue growth. These results should provide a basis for building theory relative to performance implications of Internet-based commerce for small enterprises.