All-New Second 500 Guide—10 Secrets—From E-Retailing's Minor Leagues

2013 Second 500 Guide Ranks, Profiles and Details the Leading 500 E-Retailers That Compete for the 25% of E-Retailing Not Controlled by the Top 500. Why?

Jack Love
Internet Retailer

Because These Guys Have Secrets All E-Retailers Should Know.

A Note from Internet Retailer's Publisher: We measure the growth and performance of the Second 500 e-retailers for the same reason we report hundreds of metrics on each of the Top 500 web merchants—to provide e-retailers with competitive information they can use to improve their businesses. There's as much competitive information to be gleaned in studying mid-tier players as there is in tracking the major e-retailers. In fact, the competitive secrets of the Second 500 Guide may be even more compelling because they are lesser known and are often more innovative and aggressive when it comes to applying best e-retailing practices. They target market niches better than many large e-retailers and use social media more effectively as well. And because they compete for the quarter of e-commerce that is not controlled by the Top 500, they offer powerful competitive models for the hundreds of thousands of serious e-retailers who can build a profitable e-commerce business without ever making it to the Big Dance. Listed below are just 10 secrets—among thousands—that you will find in the all-new 352-page Second 500 Guide that we published just last week. —Jack Love, Publisher of Internet Retailer

10 Secrets from E-Retailing's Minor Leagues


Which mid-market web merchants had the lowest merchandise return rates and which had the highest?

Answer: Merchants in the Second 500 have lower return rates than those in the Top 500, with a median return of 2% vs. 3%. There were seven Second 500 merchants whose merchandise return rate was essentially zero, including (who returns candy?), (custom file folders and business cards), and (travel-sized products). The highest reported return rate was 24.9% by, which specializes in selling bohemian clothing. Before you scoff at PlanetBlue's return rate consider this: This web site grew online sales (the sales that stick) by 80% last year.


Which Second 500 e-retailer has the most Likes on Facebook?

Answer: Some Second 500 web merchants use Facebook—and other social media—more effectively than their bigger brethren in the Top 500. Second 500 merchants grew their combined number of Facebook Likes by 54% last year, more than twice the rate of the Top 500. With a base of nearly 10 million Likes, HBO (No. 865) has the biggest presence on Facebook among all Second 500 merchants.


Which Second 500 web merchant achieved the highest growth rate in 2012?

Answer: The fastest growing mid-tier e-retailers are those that have a laser-like focus on a niche market others overlook. With web sales that grew 1000%, Second 500 newcomer and women's accessories e-retailer (No. 554) owes its fast-track growth to its unique specialty—selling pre-owned designer clothing and accessories., an online jeweler that zoomed up the Second 500 rankings to No. 629 this year from No. 909 last year, was the next fastest growing merchant on the list. Its online sales increased 752% thanks to its focus on eco-friendly rings, bracelets, earrings and other bling.


The e-retailers who populate the Second 500 focus primarily on highly-specialized merchandise. Which category of specialized merchandise in this group showed the fastest annual sales growth rate?

Answer: Women's luxury hand bags sold by merchants such as (No. 554) grew 65% and represented the fastest growing product niche in the Second 500. The next fastest growing niche with growth of 28% was personalized wall art sold by (No. 789) and others.


Second 500 web merchants are leaders in the use of YouTube to promote their e-retailing businesses. Which Second 500 merchant had the highest number of YouTube views?

Answer: (No. 733), an e-retailer of gag gifts and other novelties, has 258 million product video views on YouTube, the most of any Second 500 merchant.


What is the youngest e-retailing business ranked in the Second 500?

Answer: As a group e-retailers in the Second 500 have been in business for fewer years than those in the Top 500. The median age of a Second 500 e-retailer is 11 years compared to 14 for the average Top 500 retailer. The youngest web merchant in the 2013 Second 500 is Chalkfly (No. 1000) which in 2012, its first year in business, generated web sales of $75,000.


How many merchants which were ranked in the 2012 edition of Second 500 Guide made it into the Top 500 Guide this year and who were they?

Answer: You can compare the Second 500 to the minor leagues of baseball, where young stars are given their chance to catch the eye of major league scouts and make it to the “Show.” Five web merchants advanced from the Second 500 into the ranks of the country's 500 largest e-retailers in the last year. They are:


2013 Top 500 Rank

Growth %

2012 Second 500 Rank














Which Second 500 e-retailer has the highest number of followers on Twitter?

Answer: Relative to their sales volume, Second 500 e-retailers are also more aggressive Twitter users than their counterparts in the Top 500. Fashion designer and apparel maker Calvin Klein Inc. (No. 680) has 558,000 followers on Twitter – the most of any Second 500 merchant and 11th overall among all e-retailers. leads all e-retailers in the use of Twitter, boasting 3.4 million followers.


Which Second 500 merchant carries the biggest product inventory online?

Answer: Big product inventories—though rare in the Second 500—can be found at smaller retail web sites that specialize in auto and appliance replacement parts. With an inventory of 3.75 million replacement parts, Jack's Small Engine & Generator Service (No. 535) stocks the most products and SKUs of any Second 500 merchant. Of the 10 Second 500 merchants with the biggest inventories, four—Jack's Small Engine & Generator Service, (No. 984), (No. 737) and Inc. (No. 690)—are niche retailers specializing in hard-to-find replacement parts.


Among all Second 500 merchants, which one has the highest conversion rate (i.e., percentage of web visitors who buy during their visit)?

Answer: Comic book readers love to browse and buy on (No. 950), which had the highest conversion rate among all Second 500 merchants at 13%. Compared to the median Second 500 merchant conversion rate of 2.3%, is converting many more browsers to buyers by offering more than 30,000 new and collectible comic books clearly organized by publisher and genre and easy ways to buy including mobile commerce.

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The amount by which Second 500 e-retailers grew in 2012


Median merchandise return rate of Second 500 merchants


2012 growth rate of consignment apparel retailer Real Real Inc.


The amount by which Second 500 apparel retailers grew in 2012

Key Features

  • Sales Figures2012 web sales of mid-market e-retailers

  • Thorough AnalysisKey financial, operations, payments & performance metrics

  • Comprehensive ReviewThe content and frequency of merchants’ e-mail marketing strategies

  • Industry ContactsNames of more than 1,200 e-commerce execs

See all features