E-Store stands defiant: We make money

While many online retailing companies are yet to post a profit, Sydney-based E-Store claims it has a simple business model that seems to work -- revenues should exceed expenses.

The company is operating at a profit, with its monthly revenue for May set to top the $1 million mark.

Managing director Steven Spilly said many online retailers are being dragged down by their pure e-commerce model.

"It doesn't take a genius to figure out that revenues should exceed expenses, so from the outset we have geared E-Store to deliver on this simple concept," he said.

"E-Store has reached and maintained profitability by concentrating on this fundamental principle, as opposed to taking the overly aggressive marketing approach adopted by many Internet companies, which has resulted in nothing more than heavy losses and a dependence on continued funding.

"I've heard some of Gerry Harvey's criticisms on many e-tailing strategies adopted in Australia, and I would have to agree for the most part," Spilly added.

"I see E-Store as the exception, simply because we have significant revenues, high growth and a profitable model.

Harvey Norman and other successful bricks-and-mortar retailers have built solid brands over time and have the benefit of years of retailing experience.

"E-tailers who try to compete with the likes of Harvey Norman purely on the back of heavy marketing are destined to fail. Online retailing is about providing customers with a unique buying proposition, not about trying to out-market the likes of Harvey Norman -- you just can't compete with a $100 million per year advertising budget, no matter how well funded you are."

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