Thursday, May 08, 2008

Top 500 Web Retailers Account for $101.7 Billion in Sales

According to Internet Retailer "In 2007, many retailers struggled with weak store and catalog sales. By contrast, e-commerce was the retailing industry’s growth engine. In 2007, the business-to-consumer e-commerce market, which includes the Internet Retailer Top 500, grew nearly six times faster than total retail sales. Last year online retail sales reached $165.9 billion, an increase of 21.6% from $136.2 billion a year earlier. Meanwhile, total retail sales grew by 3.9% to $2.41 trillion from $2.32 trillion in 2006, according to the National Retail Federation."


"Back in the day," Online sales were thought to be the equivalent of catalog sales; a nice addition to your B&M business, but the growth would be similar to the catalog business. Well, according to the information coming from Internet Retailer, that is not the case. Business-to-consumer e-commerce is still growing 21.6% Y/Y or $29.7 billion in from 2006 to 2007, while total Retail sales grew by $90 billion Y/Y. A whopping 33% of "total retail" growth is coming from online commerce.

I looked at the list of the top 500 online retailers and to be honest they are missing some companies. They look at eBay's business in the aggregate, saying; "In 2007, the Top 500 grew their combined sales to $101.7 billion, an increase of 21.6% from web sales of $83.6 billion in 2006. The rest of the market, including an estimated $38 billion in eBay Inc.-originated sales that could be considered retail sales, accounted for $64.2 billion in sales, up 22% from $52.6 billion a year earlier. 2007 sales at the Top 100 grew to $87.7 billion —22.5% — from $71.6 billion in 2006. " So eBay accounted for $38 Billion in "retail sales" by far the largest share of the $165.9 billion total, but since they are not a retailer they don't make the list.

According to Internet Retailer: "Last year combined revenue of the Top 500’s 100 smallest merchants—companies with annual web sales ranging from $6.4 million to $13.4 million—rose by 19% to $995.5 million from $836.3 million in 2006."

Notable companies missing from their list:

Grapevinehill
eForcity
Movie Mars

These are just a few online retailers who would have made the list, but were counted in $38 billion from eBay.


Some of the top 100 retailers on the list are already opening up their sites to other merchants to expand their product offerings. We are all aware of Buy.com, Overstock and Amazon opening their platforms to 3P sellers, but a new group of online retailers are getting into the business as well, like NewEgg.com - with over $1.5 billion in sales and a Top 100 retailer in this survey, they have opened up the NewEggMall.com to broaden the product offerings.

In the next few years more top retailers will follow suit and open up their traffic to 3P sellers and ecommerce will continue to thrive.

I've said it before and I'll say it again. Online retail is the growth engine of the future and online merchants have much to look forward to as long as they don't rely on sales from just one channel.

Just my 12%

3 comments:

Dave White said...

Randy

Online retail is the growth engine of the future and online merchants have much to look forward to as long as they don't rely on sales from just one channel


Get up on the mountaintop and shout that again and again!

Randy Smythe said...

I'm trying Dave, I'm trying!

Anonymous said...

Does anyone know where Jeffers, Inc came up in the top 500 for 2008? Much Thanks.