Amazon.com is a virtual bookstore. It does not have a single square foot of bricks and mortar
retail floor space. Nonetheless, Amazon.com is posting an annual sales rate of approximately
$1.2 billion, equal to about 235 Barnes & Noble (B&N) superstores. Due to the
efficiencies of selling over the Web, Amazon has spent only $56 million on fixed assets,
while B&N has spent about $118 million for 235 superstores. (To be fair, Amazon has yet to
turn a profit, but this does not obviate the point that in many industries doing business
through e-commerce is cheaper than conducting business in a traditional brick-and-mortar
company.)
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