Quote:
Originally Posted by theducks
There is all sorts of Rent and other expense paid by Online retailers.
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It's significantly lower than brick & mortar costs.
Barnes & Noble, 2011:
- $7 billion in revenues
- 30,000 employees
- $233,000 in revenues per employee
Amazon, 2011:
- $48 billion in revenues
- 88,000 employees
- $545,000 in revenues per employee
Quote:
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Originally Posted by theducks
1)Warehouse space for physical products
3)Server (CoLo) rack space expense 
5)Higher credit card (non-swipe) fees  |
Both retail and online retailers need warehouse space, online sales presence, and credit card processing fees.
Amazon doesn't need to pay leases or mortgages; they don't have a small army of sales clerks; they don't have to pay liability or fire or flood insurance on 650 stores; they only have to stock a handful of warehouses, rather than warehouses
and 650 stores.
They also don't have to worry about digital cannibalizing their existing sales infrastructure.
And of course, indie stores don't have all the advantages of B&N or Amazon.