| SIC Codes: | 5961 |
| NAICS Codes: | 454111 454113 |
Companies in this industry sell products to consumers via the Internet or mail order. Major companies include Lands’ End, LL Bean, Amazon, Overstock, and Hanover Direct (all based in the US), as well as GS Home Shopping (South Korea), N Brown Group (the UK), and Otto Group (Germany).
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. The industry is concentrated: the top 50 companies account for about 70 percent of industry revenue.
Although Internet and mail-order retailers sell a variety of products and services, some of the largest product categories are drugs, health, and beauty aids; computer hardware and software; and clothing. Many Internet and catalog companies specialize in a single product category, but larger companies are expanding offerings to maintain growth and leverage brand awareness. Amazon has expanded from being an online bookstore to offering items in more than 30 categories, including loose diamonds.
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