Web-only merchants dominate the Second 500
July 26, 2011 09:07 AM
When it comes to the industry’s up and coming online retailers, it’s clear that web-only merchants dominate, according to data contained in Internet Retailer’s newly published Second 500 Guide.
The 286 online-only retailers ranked in the Second 500 Guide accounted for 56%, or about $1.4 billion, of sales of $2.47 billion among all Second 500 merchants. In comparison the big web-only merchants ranked in the Top 500 Gide control just 37.9%—$56.9 billion—of all Top 500 sales of $150.0 billion. Among the Second 500, web-only merchants also account for 57.2% of the total number of retailers ranked in the Guide, compared with 41%—205—among the Top 500.
When Amazon.com and its 2010 web revenue of $34.2 billion are taken away from the Top 500 web-only merchants, the dominance of the online-only retailers in the Second 500 Guide is even more compelling. Without Amazon, the remaining 204 web-only merchants account for only 15%, or $22.7 billion, of all Top 500 sales in 2010.
The Second 500 Guide puts the spotlight on the next generation of web-only merchants—companies that launched exclusively online in 2002 or later and avoided the Internet bubble boost of the late 1990s altogether. The industry’s up and coming web-only merchants came of age as niche web retailers that were quick to embrace emerging e-commerce technology, savvy enough to develop a successful specialty retailing strategy and saw the web as a chance to build up an entirely new brand.
In contrast the earliest Top 500 web sites—e-commerce brands that launched around 1999—were direct marketing companies and chain retailers that added a web platform onto their existing channels.
Top 500 retailers can be nimble and quick to innovate—but not nearly as fast as Second 500 merchants. The fastest growing web-only merchant ranked in the Second 500 is Blank Label (No. 995), a start-up apparel merchant that grew sales more than 7000% to $325,000 in 2010 from just $4,500 in 2009. Blank Label, whose e-commerce site allows shoppers to design, personalize and purchase dress shirts at prices from about $60 and up, is growing rapidly because the company gives shoppers more web tools to customize a shirt at a moderate price. Blank Label, which has used extensive public relations campaigns and social media to build its brand, also offers shoppers lots of extra perks such as free monogramming and no-charge shipping. “We are out to change the way men shop design-your-own dress shirts,” says Blank Label co-founder Danny Wong. “We are entrepreneurs doing something unique in custom apparel.”
The 2011 Internet Retailer Second 500 Guide ranks, profiles and analyzes the next 500 retailers by online sales after the 500 ranked in the Internet Retailer Top 500 Guide, including several that are growing rapidly. For information on how to order click here. To see the full list of Second 500 merchants click here.