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The changing face of e-commerce: online startups turn a profit

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The Wall Street Journal has examined the change in online shopping, with concepts that failed a decade ago now able to make profit thanks to the progress in technology.

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Pets internet shutterstock
Pets internet shutterstock

An article published by The Wall Street Journal is showing the ways in which e-commerce has changed in the past decade, with the cost of online business now far lower. The past couple of years has seen a wave of new startups focusing on more niche sales: the WSJ uses pet food as an example, focusing on both and the Amazon-backed in contrast to the 1998 startup, which famously crashed in 2000. While required $110 million of funding, a large proportion of which was spent on marketing, the new startups have taken around $10 million to get going, with PetFlow turning over $30 million last year alone.

A large amount of the difference is in changing consumer attitudes — online shopping is now ubiquitous, with people barely hesitating before reaching for their credit cards — other factors like increased warehouse automation and infrastructure developed to service online shopping have made a huge difference. While it still might be uneconomical to ship a single dog chew or other $0.99 item, it doesn't cost as much to keep the rest of the business going.