Niche retailing pays off for Top 500 web-only retailers

May 4, 2011 11:21 AM

The Top 500 web-only merchant segment remains dominated by a single company: Inc. But even without Amazon, No. 1 in the Internet Retailer Top 500 Guide, a number of other web-only merchants also managed to grow faster than the U.S. e-commerce market and the Top 500 as a whole.

Instead of trying to outwrestle, No. 1 in the Internet Retailer Top 500 Guide, which grew its total sales 39.5% to $34.2 billion in 2010 from $24.5 billion in 2009, other web-only retailers found success by concentrating on their niches, making acquisitions or diversifying. Overall, with Amazon included, Top 500 web-only merchants grew 30.6% to about $56.89 billion last year from $43.55 billion in 2009. But even without Amazon, sales for the remaining web-only merchants grew year over year 19.5% to $22.7 billion from $19.0 billion. A total of 68 retailers among 205 Top 500 web-only merchants also met or exceeded the growth rate of 18% for all Top 500 retailers, and 85 grew as fast as, or faster than, the increase in U.S. e-commerce sales of 14.8%.

“If they got through the recession and put up good growth last year, web-only merchants did so by running a very smart and focused operation,” says Bernardine Wu, CEO of e-commerce consulting firm FitForCommerce. “They picked the best opportunity to expand and then made the most of it.”

Beyond the Rack (No. 191) was the fastest-growing Top 500 web-only merchant. Beyond the Rack launched one of the first private-sale sites in Canada. In just over two years Beyond the Rack has grown to more than 2.5 million members and sales in 2010 grew about 1,140% to C$73.2 million (US$76.9 million) from C$5.9 million (US$6.2 million) in 2009.

More information about the 2011 edition of The Top 500 Guide is available by clicking here.




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