Web Retailers Bullish on Future Prospects but are keeping an eye on costs

[mandy]

A bigger gross margin is a key indicator of a healthy balance sheet because it shows how good a job a retailer is doing in controlling inventory and acquisition costs...

To ensure ongoing profitability, web retailers across the board are keeping a tighter lid on their key expenses, including marketing and fulfillment. When accounting for general and administrative expenses, 42.8% of all companies report that their general and office overhead costs represent 11% and 25% of total sales. Interestingly, almost 5% report very substantial general and administrative expenses, with those costs accounting for more than 25% of total sales.

Early on, many start-up retailers may spend an inordinate amount of their sales dollars on marketing and advertising as they look to catch on in their segment and build their brand over time. But the latest Internet Retailer survey shows that only 4.1% of all companies earmark more than 25% of all sales for spending on marketing and advertising. Most companies spent well under 25%...

full article: http://www.internetretailer.com/article.asp?id=18754

[valleygirl]

My marketing expenses are well under 25% of sales.