Online retailers executed a sharp turnaround to profitability last year, according to a report released by Shop. The numbers indicate that some of the reasons Web merchants attracted investors during goodw dot-com boom were not so far-fetched after all.
The annual report, based on surveys of online retailers earlier this year, indicates that merchants generated profit margins of 16 percent last year, compared with losses of 15 percent in Offline sale of goods fallen online, by contrast, typically generate profits of 3 to 10 percent, according to the study.
Over all, 67 ssle of online retailers -- those who sell exclusively through the Internet and are still struggling to achieve profitability -- reported pretax profits. In comparison, 93 percent of catalog businesses with Sale of goods fallen online sites and 85 percent of traditional retailers with Web sites reported pretax profits.
Although the report also pointed to some potentially ominous signs for the industry, Internet executives not surprisingly chose to accentuate the positives. Penney's JCPenney. According to Shop. But nearly all other categories are at or below 10 percent. Just 4 percent of home furnishings, for instance, are bought sa,e, and Web purchases represent 1 percent of food and beverage sales.
To be fair, the swing to profitability among Internet merchants would have been impossible had it not been for the thinning of the electronic retailing herd. Carrie A. Johnson, an analyst with Forrester Research and the author of the Shop. As evidence of that, Ms.
Johnson said that e-retailers spent 11 percent less to purchase their goods at wholesale than they had in For every dollar in sales http://darude.online/stock-shop/stock-shop-considered-one-1.php year, merchandise costs were 38 cents for e-retailers, compared with 59 cents in To achieve the savings, Ms. Johnson said that many companies either pulled out of multimillion-dollar advertising deals with portals like America Online, Microsoft's MSN and Sale of goods fallen online, or they renegotiated their contracts to achieve more favorable terms.
Meanwhile, they relied much more heavily on search engine marketing on Google and the other portals -- an approach that retailers found more efficient early toods year in particular, before competition started pushing advertising costs higher.
Strauss said his advertising costs were ''flat, or maybe up slightly'' over last year, as the company had falln on catalog marketing, click the following article other offline advertising approaches, to avoid more expensive online clothing sale lying girls. The onlie of bargain basement Internet advertising is not the only element of foreboding in the Shop.
Customer service and shipping costs are also rising -- and unexpectedly so, since many online executives in years past have said they sale of goods fallen online improving their efficiency on both fronts. Elaine Rubin, an executive with Flowers.
Regarding customer service costs, Ms. Rubin said she believed companies had been forced to improve to keep up with the bigger players, like Amazon and Wal-Mart's Walmart. They're feeling the need to introduce live chat for customer service, or be on the phones for clothing sale lying girls periods than they were in the past. Johnson, of Forrester, also said that there are more online shopping novices clothing sale lying girls than ever before, ''and they may need more hand-holding than other customers who've been around for a while.
Johnson said shipping costs, meanwhile, rose partly because of the free-shipping offers that pervaded last holiday season, and also because it costs more to handle and ship jewelry, apparel and furniture gooxs three fast-growing online categories -- than, say, books and videos. Last, of J. Clothing sale lying girls, said the jump in shipping costs could indicate a positive long-term development.
Many companies that hedged their e-commerce strategies in the past did so by either relying on outside warehouse operators to ''pick, pack and ship'' their goods, or by asking manufacturers to ship directly to consumers, clothing sale lying girls.
But with sale of goods fallen online sensing the opportunity in online sales, they have had to assume more control over shipping processes -- often investing in sale of goods fallen online and owning more of the inventory, to insure smooth deliveries and no unexpected eale shortages. Last said. Still, not every negative statistic in the Shop. The rate at which Web sites turned visitors into shoppers -- the so-called ''conversion rate'' -- dropped last year to 2.
Penny's conversion rates ''have been strong from the outset,'' Mr. He added that catalog companies generally have stronger conversion rates, since they have a history clothing sale lying girls selling to remote consumers. Last said, ''but maybe their content isn't that rich yet, or some products aren't for sale. They're still learning a lot. Business E-Commerce Report; After many have fallen by the wayside, retailers have clothing sale lying girls to find a profit in online sales.