Retailers shift their ad spending from TV, radio and print ads to digital ads.
There’s lots of growth left in the Internet if the experiences of two small but established retailers are a guide. 2005 sales at Communicate.com were up 144% over 2004 while Thralow Inc.’s 2005 web sales were up 52% over the prior year.
Web sales in 2005 at Communicate.com, which owns 900 b2c and b2b web sites and domain names, grew to $4.8 million in 2005. Total revenue, which includes advertising sales on its web sites, grew 64% to $5.8 million. The company earned $373,940, a decrease of 25% from the prior year, which the company says is primarily attributable to the fact that the company sold no domain names in 2005, compared to domain name sales of $950,000 in 2004.
“In 2005, e-retail became our prime focus and by far our largest revenue stream, allowing us to strategically eliminate our reliance on domain name sales,” says David Jeffs, president. “The fourth quarter, which was the best sales quarter in company history, accounted for approximately 47% of revenue. We remained profitable even as we expanded our workforce and invested significantly more toward marketing and customer acquisition. The result is an e-retail company primed to move to the next level.”
The company, which operates Perfume.com, Body.com and other sites with what the company describes as “intuitive” domain names, projects 2006 revenue of $8.5 million to $10 million and says it expects $50 million in annual sales within three to five years.
At Thralow, which also operates one-name domains, such as Telescopes.com, Binoculars.com, Pans.com and Peepers.com (selling eyeglasses), recent 12-month sales reached $21.65 million, up 52% from $14.26 million a year ago.
CEO Daniel Thralow attributes the sales increases to a few factors. “First is the overall growth in the Internet, with more and more people preferring the convenience of online shopping and door-to-door delivery,” he says. “The second factor is our aggressive marketing initiatives and launching of new, specialized web sites. SpottingScopes.com, for example, was launched to serve increasing demand for optics used in observing nature and in digital photography.”