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Internet & Online Retail Industry

The Internet and catalog retailing industry in the US includes 16,000 companies with combined annual revenue of over $160 billion. Major companies include Lands’ End, LL Bean, Amazon, Overstock, and Hanover Direct. The industry is concentrated: the top 50 companies account for about 60 percent of industry revenue. Over the past five years, the industry has shifted from catalog to Internet sales.

Competitive Landscape

Demand is driven by consumers’ personal income. Profitability of individual companies depends on effective marketing to build a customer base. Larger firms enjoy central purchasing efficiencies and economies of scale in inventory management, customer service, and telecommunications. Smaller firms compete on outstanding customer service and providing niche products. Average annual revenue per worker for a typical company is about $400,000.

While most brick-and-mortar retailers have an online presence and many also offer catalog sales, this profile focuses on retailers who use the Internet or catalogs as their sole or primary sales channel.

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