The real reason that just a few companies are dominating online retail & newer players really can't break in:

posted by Brian Mudd - 

The real reason that just a few companies are dominating online retail & newer players really can't break in:

Bottom Line: It's unprofitable. That's it. You typically have two types of consumer based businesses. Products and services that are high volume and low margin and those that are lower volume but higher margin. Consumer, especially online retail, is certainty the former. We know how rapidly and radically traditional retail is being impacted by online retailing. What's notable though, is that unlike physical retail, there just aren't that many highly successful online retailers. The biggest names are extremely well established companies (Amazon.com, Wal-Mart.com) and very few new names have come about in recent years that have impacted meaningfully (Jet.com would be the closest example and it was gobbled up by Wal-Mart). 

Simply put the volumes of Amazon and Wal-Mart are so massive that the margins are brought down to razor-thin levels that others without the volume simply can't touch. So it's highly unlikely that we'll ever see in online retail, what we've known in physical retail. 

Brian Mudd

Brian Mudd

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