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Posts Tagged ‘2009 profitability’

What's the Final Verdict for 2009 Holiday Onlines Sales? You May Have Sold More, But Did you Make More This Year.

Monday, January 4th, 2010

By all accounts, the 2009 holiday sales numbers seem pretty strong.  In a recent post, TechCrunch highlighted that the recent comScore assessment of online sales this year.  It touted that the revenue was up,  compared to the 2008 holiday season, 5%.  As we have alluded to in earlier posts, it not necessarily an indication of overall health of the economy, as that growth is likely coming at the expense of Bricks and Mortar shopping.  In addition to a growing acceptance of eCommerce versus fighting the crowds at the mall, 2009 included another wildcard that likely built up the number — the massive snow storm that plagued the East Coast for most of the holiday season. 

No one is going to argue that 5% growth isn’t great — most companies, in this economic environment, would love to have that type of growth.  But a valuable lesson that I learned in business school — it’s pretty complicated concept — the bottom line is a better indicator of business health than the top line.  So, though revenue may be up, what’s the profitability look like for the 2009 holiday shopping season?  Were shoppers buying low margin items with that cost a lot to resell?  It seems that may be the case.  According to comScore, this holiday shopping season saw a lot of high price ticket items (with not a lot of room for mark-up) that were the big sellers this year.  In fact, consumer electronics saw a 20% increase in sales this year, with jewelry and watches also as strong items.

So the question I pose to all online sellers is this — did your profitability rise at the same rate as your revenue this season?

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