Online Sellers Expected To Lose $200 Million For Holidays

Despite more than $12 billion in online spending by U.S. consumers expected this quarter, online retailers will struggle to turn a profit this holiday season, and many will experience million-dollar losses, according to a report from IDC, an e-business market intelligence and advisory firm in Framingham, Mass. "The reward for going through the trouble of picking, packing, and shipping millions of holiday packages from expensive warehouses will be $200 million in aggregate losses for the online retail industry," says Jim Williamson, senior analyst, Internet economy research program. "Even this impressive figure masks the staggering losses we anticipate will be sustained by many e-retailers." According to IDC, unprofitable e-retailers collectively will lose $700 million while money-making firms will turn a joint profit of $500 million. The company feels the most successful online retailers this holiday season will be those that offer in-store returns and that have improved their logistics infrastructures to avoid the delivery problems that plagued the online retailing industry last year.