GrokDotCom’s latest conversion rate report is out and Office Depot leads the pack with 26.9%. Checkout July’s Top 10 Online Retailers by Conversion Rate.

These numbers are incredibly amazing, but are these conversion rates realistic for small e-commerce merchants? I have personally seen small e-commerce retailers with conversion rates between 8-10%. Compared to the national average of 2%, I’d say that’s pretty substantial.

These large companies spend millions of dollars on branding and marketing, which must be considered when looking at their conversion rates. Their customer acquisition cost is likely much higher than small merchants selling the same type of products. They may even lose money on the initial sale, knowing they’ll make it back over the lifetime of the customer.

What does all this mean to small e-commerce merchants?

Strive for somewhere in the middle. Don’t settle for 2%, but don’t go crazy trying to get your conversion rate to 25%. Always keep making changes, testing, and making more changes to continuously increase your conversion rate.

Don’t let people tell you that 8% or 10% conversion rates are unattainable though. They are very attainable. Though conversion rates will vary from industry to industry, 10% conversion rates are fairly common among small to medium sized merchants.

Other factors to consider…

Other factors can greatly affect your conversion rates. A website’s conversion rates will vary greatly depending on the source of the visitor. Visitors from organic search, PPC advertisements, referral links and direct type-in traffic will all have distinctly different conversion rates.

Marketing promotions can have a big impact on conversion rates. Specials and coupons have a big impact on conversions, though they may decrease the average profit per order.