Ecommerce Success in the Dakotas and Wyoming
In a recent comprehensive study by Omnisend, a prominent email and SMS marketing platform, South Dakota, Wyoming, and North Dakota have emerged as the leading states for ecommerce businesses in the United States. This assessment considered essential factors such as taxes, purchasing power, infrastructure, and business regulations to provide a clear view of the best locations for ecommerce entrepreneurs.
The research revealed that for an average ecommerce company generating $1 million annually and primarily selling out of state, South Dakota topped the rankings. Notably, the state features zero corporate income tax, streamlined regulations, and above-average household purchasing power, making it a prime location for online retailers.
Following closely behind was Wyoming, which boasts similar advantages, including no corporate income tax and a favorable regulatory environment. North Dakota also performed well, ranking third in the study, thanks to its moderate tax rates and strong economic indicators.
As for the coastal states, the picture is quite different. New Jersey and California, once seen as attractive for ecommerce businesses, fell drastically in the rankings as company revenue and operations expanded. New Jersey, which ranks first for companies earning only $100,000 in-state, dropped to 45th place when revenues increased to $1 million due to high progressive taxes and limited purchasing power. Similarly, California's steep tax and cost burdens push it down to 48th place when considering average business operations.
The Importance of Strategic Location
Marty Bauer, an ecommerce expert at Omnisend, highlighted that the ideal location is not one-size-fits-all, emphasizing the need for businesses to align their operational specifics with a state's tax structure and market dynamics. He explained that many coastal states are losing their allure due to high costs, prompting businesses to rethink their geographic preferences.
In contrast, rust belt states like Ohio, Indiana, and Pennsylvania maintain a solid position in the index, thanks to their manageable taxes, decent purchasing power, and robust infrastructure. These states exemplify how a thriving entrepreneurial ecosystem can exist outside the traditional hotspots, offering stability and regional connectivity to businesses aiming to reach a broad customer base across the nation.
Rankings Overview
The top ten states for ecommerce according to the Omnisend Ecommerce Opportunity Index are as follows:
1.
South Dakota – Overall Score: 1.00
2.
Wyoming – Overall Score: 0.98
3.
North Dakota – Overall Score: 0.97
4.
Delaware – Overall Score: 0.91
5.
Idaho – Overall Score: 0.88
6.
Pennsylvania – Overall Score: 0.87
7.
Ohio – Overall Score: 0.85
8.
Indiana – Overall Score: 0.84
9.
Kentucky – Overall Score: 0.84
10.
Montana – Overall Score: 0.84
Moving Forward in Ecommerce
As ecommerce continues to grow, entrepreneurs are encouraged to carefully evaluate their business models against the structural advantages offered by different states. Omnisend's findings are instrumental for those looking to thrive in the online market. Balancing operational needs with tax benefits and potential customer bases in various regions will ultimately determine long-term success in the ecommerce landscape.
For those interested in delving deeper into the study, further details can be found on
Omnisend's Ecommerce Index. With the right strategy and location in place, ecommerce businesses can tap into the tremendous potential of states like South Dakota and Wyoming, where entrepreneurial prospects are abundant and flourishing.