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Abstract

Although more and more small and medium-sized enterprises (SMEs) use the Internet for business purposes, few of them have adopted the Internet as an online direct sales channel (ODSC). Among those that do use the ODSC, some end up abandoning it after adoption. This study explores a few critical factors underlying the initial adoption and continued use of online direct sales channels among SMEs. Synthesizing existing works, we construct an innovation adoption decision factors classification framework that classifies innovation decision factors into three dimensions: decision entity factors, decision object factors, and context factors. We then operationalize these factors in the context of SMEs’ initial adoption and post-adoption continued use of online direct sales channels. We conduct a survey study on SMEs within the United States. The results demonstrate that an SME’s initial adoption and post-adoption continued use of an ODSC involve different sets of decision factors. Furthermore, results demonstrate a learning effect within adopting firms that implies they perceive the relative advantage of ODSC differently in comparison to pre-adopters.

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