E-commerce: Winning the War

So far, we can’t see a lot of evidence that catalogers’ cost structures are improving due to Web marketing. For 10 years (the last three in conjunction with the Direct Marketing Association), W.A. Dean & Associates has tracked typical operating costs for catalogers in “The State of the Catalog/Interactive Industry Report.” For larger companies, operating costs have run about 16 percent of sales; in the just-released 2000 report, they’ll again be 16 percent. The same story holds for gross margins. It’s hard to draw the conclusion that catalogers have seen big improvements in backorders, margin or inventory control due to their increased Internet business.