US online retail continues 17% to 20% year-over-year growth!

May 11, 2012

Today turned out to be an unusually interesting day for three reasons.

First, the U.S. Census Bureau released its latest E-Stats Report for FYE 2010 today, which revealed that online retail reached $169 billion for all of 2010. The Census Bureau data point does not include online auctions or marketplaces. If you add in eBay’s 2010 U.S. Gross Merchandise Volume (GMV) of $20.4 billion, total online retail could be estimated at approximately $190 billion for FYE 2010. The E-Stats Report also includes preliminary estimates for online retail in 2011 of approximately $194.3 billion. Once again, if you add eBay’s 2011 GMV of $22.8 billion, total online retail could be estimated at approximately $217 billion for FYE 2011.

Second, today comScore released Q1 online retail statistics, which say that online spending in the U.S. reached $44.3 billion (excluding auctions), an increase of 17% over last year. Interestingly, comScore will be hosting a free webinar to review their data in detail—including recent trends toward “showrooming” (in which a buyer goes to a bricks-and-mortar store to compare different items, then leaves the store and purchases online to avoid sales tax).

Finally, today Internet Retailer released their annual Top 500 Guide. As usual, Amazon tops the list with $48 billion in sales.

An interesting data point in the annual ranking includes the dramatic range in revenue from the top of the list to the bottom. At number 500 is Summit Sports with just under $15 million (0.00024% of eBay’s sales volume).

We have always thought it notable that eBay is not included in this list. We understand that as a marketplace operator, they are not the direct retailer; rather, they aggregate millions of sellers under one roof. However, if eBay were included on the list, based upon only their marketplace and GSI business units (excluding PayPal), they would beat even Amazon with $62 billion in GMV in 2011 (worldwide).

Here’s an interesting observation about the census and Internet Retailer data. The total online commerce represented in the Top 500 list—which, you’ll remember, ends with a retailer that had just under $15 million in sales in 2011—was $150 billion in 2010. However, the census data reports $190 billion for 2010. That year, the retailer at the bottom of the Top 500 list was MagnetStreet with $11 million. Since the census figure includes all retailers while the Top 500 figure includes only retailers with more than $11 million in annual sales in 2011, we now know how much businesses with less than $11 million in annual sales generated together in 2010.

In other words, because it didn’t count businesses with less than $11 million in annual sales in 2010, the Top 500 list only accounted for $150 billion in total ecommerce sales in 2010 instead of $190 billion.

That’s $40 billion in ecommerce being transacted by merchants with less than $11 million in annual sales! It’s also important to remember that the IR Top 500 Guide is not restricted to US sales but includes all sales worldwide. So there could be considerably more than $40 billion in ecommerce that’s still under the radar.

There are a lot of conclusions that could be drawn from this, but we’ll save those discussions for another post at a later date.

Census figures point to new estimates for 2011 e-commerce

May 24, 2011
US Census Bureau: New E-Stats

US Census Bureau: New E-Stats

The Census Bureau released new retail figures last week, including figures for e-commerce sales in the first quarter of 2011.

We did a little math to figure out, based on those first-quarter figures, how much we can expect in e-commerce sales for this entire year. We averaged the ratios of first-quarter e-commerce sales to total e-commerce sales for 2009 and 2010, which gave us a figure of 4.24—in other words, the total e-commerce sales for the past two years have averaged about 4.24 times as much as the first-quarter sales.

Previous Two Years E-Commerce Retail Sales (in Millions)
2009 Q1 2009 FYE ’09 FYE/Q1 2010 Q1 2010 FYE ’10 FYE/Q1 Avg. Ratio
$34,151 $144,462 4.23 $39,159 $166,529 4.25 4.24

Using that ratio for 2011, we multiplied the first quarter e-commerce sales figure of $46 billion by 4.24 to get just over $195 billion. We should point out this figure does not include sales from online auctions, mail-order catalogs, telephone orders, or TV shopping networks.

Now for the most interesting part: how much sales tax (or use tax) due will actually be collected/remitted?

At the current average sales tax rate of 6.85% percent, the total sales tax due on $195 billion is approximately $13.5 billion. However, according to California’s Board of Equalization, typically only four-tenths of one percent (0.04%) of the tax due on e-commerce sales is collected. Which means that (drum roll, please). . .

Although about $13.5 billion will be due, the states can expect only $53 million in revenue, unless Congress takes action by enacting the Main Street Fairness Act. With our states in such dire fiscal condition, we hope Congress will allow states to simply collect the tax that is due, instead of raising taxes.