February 22, 2006, 12:00 AM

The final word on 2005: Commerce Dept. reports online sales grow 24.6%

Online retail sales in 2005 grew 24.6% over 2004, reaching $86.3 billion, the Census Bureau of the U.S. Department of Commerce reports.

 

Online retail sales in 2005 grew 24.6% over 2004, reaching $86.3 billion from $69.3 billion, the Census Bureau of the U.S. Department of Commerce reports. While other researchers reported yearly online sales shortly after the year closed, the Commerce Department’s report is considered the final word and other researchers benchmark their numbers against the Commerce Department.

Online retail sales in the fourth quarter grew 23.4% over online sales in Q4 2004, reaching $26.5 billion from $21.5 billion, the Commerce Department reports. Q4 sales also were 27.5% over Q3’s sales of $20.8 billion

By comparison, total retail sales in 2005 were up 7.2% from 2004. Year-over-year Q4 growth in total retail sales was 6%. Q4 total sales were up 0.3% from Q3.

Online sales accounted for 2.3% of all retail sales in 2005, the Commerce Department reports. The Commerce Department numbers include many sales that are never likely to occur on line, such as fuel and restaurant sales, but exclude auto parts. Adjusting the Commerce Department numbers to exclude fuel, gasoline station and food service sales but to include auto parts, the proportion of online sales to offline sales that could occur online jumps to 3.4%.

However, the Commerce Department also excludes eBay and other auction sales. So including eBay’s gross merchandise sales of $44.3 billion minus eBay’s automobile sales of an estimated $13 billion, and assuming that two-thirds of remaining eBay sales could equate to retail sales (as opposed to people just cleaning out their attics and garages), total online sales in 2005 shoot up to $107 billion, which amounts to 4.3% of all retail sales.

 

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