Nonstore Retail
Description
Companies in this industry sell merchandise on retail websites, online auctions, mail-order catalogs, toll-free telephone numbers, television shows, or other business channels. Major companies include US-based Amazon, eBay, HSN, Newegg, and QVC as well as Alibaba Group (China), Argos and ASOS (UK), JD.com (China), MercadoLibre (Argentina), and Otto Group (Germany).
Nonstore sales mainly take place online. Global annual sales from e-commerce is about $7 trillion in 2025 and is forecasted to grow by about 8% to about $8 trillion in 2027, according to Soax. Top countries for e-commerce sales include China, the US, the UK, Japan, and South Korea.
The US nonstore retail industry includes about 77,000 employer establishments (single-location companies and units of multi-location companies) with combined annual revenue of more than $580 billion.
COMPETITIVE LANDSCAPE
Demand is driven by consumers’ personal income. The profitability of individual online retailers depends on effective marketing and competitive pricing 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 60% of revenue.
Companies in the internet auctions industry, such as eBay and Taobao in China, generally compete with online retailers and physical retail establishments. Some companies do business in several of those areas, selling items through conventional e-commerce systems in addition to facilitating consumer-to-consumer bids. Online classified listings such as Craigslist and social media apps that connect potential buyers and sellers may also pose a competitive threat.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products sold by nonstore retailers include medicines, vitamins, minerals, and supplements (about 20%), computers and communications equipment (about 10%), and women's clothing (about 5%). Popular categories listed on consumer-to-consumer (C2C) auction websites include collectibles, antiques, and electronics. High-end merchandise includes real estate, yachts, and cars.
E-commerce software platforms, which can be self-hosted or hosted and supported by a third party, are typically integrated into the retailer’s website. These systems allow customers to place items in online shopping carts, enter their shipping and payment information, and check out. The cost of e-commerce software and related services can range from $20 per month for basic small-business storefronts to more than $1,000 per month for enterprise platforms with premium features.
Sales on online marketplace sites are booming as more consumers shop and retailers set up shop on the massive ecommerce platforms. E-commerce sales are estimated to have about $4.3 trillion globally in 2025, according to Statista. Global leaders include Alibaba's Taobao and Tmall, as well as Amazon and eBay in the US. Amazon Marketplace is by far the largest in the US (ahead of eBay and Walmart Marketplace).
Online retailers typically ship items out of warehouses or distribution centers that can be several hundred thousand square feet and contain thousands of different products. Some firms outsource their distribution operations to third-party companies. Shipments are made via the US Postal Service or a commercial shipping firm. Most online retailers have flexible return policies as well as call centers to assist customers with problems.
Internet auction companies operate websites that allow sellers to list their merchandise and buyers to bid on the items. Auction software monitors bids and determines the winning buyer at the end of the auction period. Companies may rely on third parties to facilitate payment or shipping between parties.
The direct-to-consumer home shopping market is dominated by industry leaders QVC and HSN (both owned by Qurate Retail Group, formerly Liberty Interactive). The business model traditionally operates by showcasing products on TV channels, and then selling large volumes of product over the phone at low prices in a short timeframe. Home shopping companies are increasingly focusing on the internet as an additional sales channel.
Nonstore sales mainly take place online. Global annual sales from e-commerce is about $7 trillion in 2025 and is forecasted to grow by about 8% to about $8 trillion in 2027, according to Soax. Top countries for e-commerce sales include China, the US, the UK, Japan, and South Korea.
The US nonstore retail industry includes about 77,000 employer establishments (single-location companies and units of multi-location companies) with combined annual revenue of more than $580 billion.
COMPETITIVE LANDSCAPE
Demand is driven by consumers’ personal income. The profitability of individual online retailers depends on effective marketing and competitive pricing 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 60% of revenue.
Companies in the internet auctions industry, such as eBay and Taobao in China, generally compete with online retailers and physical retail establishments. Some companies do business in several of those areas, selling items through conventional e-commerce systems in addition to facilitating consumer-to-consumer bids. Online classified listings such as Craigslist and social media apps that connect potential buyers and sellers may also pose a competitive threat.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products sold by nonstore retailers include medicines, vitamins, minerals, and supplements (about 20%), computers and communications equipment (about 10%), and women's clothing (about 5%). Popular categories listed on consumer-to-consumer (C2C) auction websites include collectibles, antiques, and electronics. High-end merchandise includes real estate, yachts, and cars.
E-commerce software platforms, which can be self-hosted or hosted and supported by a third party, are typically integrated into the retailer’s website. These systems allow customers to place items in online shopping carts, enter their shipping and payment information, and check out. The cost of e-commerce software and related services can range from $20 per month for basic small-business storefronts to more than $1,000 per month for enterprise platforms with premium features.
Sales on online marketplace sites are booming as more consumers shop and retailers set up shop on the massive ecommerce platforms. E-commerce sales are estimated to have about $4.3 trillion globally in 2025, according to Statista. Global leaders include Alibaba's Taobao and Tmall, as well as Amazon and eBay in the US. Amazon Marketplace is by far the largest in the US (ahead of eBay and Walmart Marketplace).
Online retailers typically ship items out of warehouses or distribution centers that can be several hundred thousand square feet and contain thousands of different products. Some firms outsource their distribution operations to third-party companies. Shipments are made via the US Postal Service or a commercial shipping firm. Most online retailers have flexible return policies as well as call centers to assist customers with problems.
Internet auction companies operate websites that allow sellers to list their merchandise and buyers to bid on the items. Auction software monitors bids and determines the winning buyer at the end of the auction period. Companies may rely on third parties to facilitate payment or shipping between parties.
The direct-to-consumer home shopping market is dominated by industry leaders QVC and HSN (both owned by Qurate Retail Group, formerly Liberty Interactive). The business model traditionally operates by showcasing products on TV channels, and then selling large volumes of product over the phone at low prices in a short timeframe. Home shopping companies are increasingly focusing on the internet as an additional sales channel.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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