Ditching the Bricks for Bits

This Business Week article profiles several companies that have made the extraordinary leap of closing their bricks and mortar premises and setting up shop entirely on the Internet. Usually this is because of extreme pressure by the larger, stronger brands in the marketplace. I think one of the big stumbling blocks for corporates getting in the e-commerce market is the danger of alienating existing channels which the company depends upon in the short term. If you're undercutting your distributors by selling direct the first thing they are going to do is to refuse to sell any more of your goods and sell your competitors instead and it will take years to turn a real profit on the net. These companies have solved that problem by leaving it all behind and starting afresh. How many billion dollar tunover companies are going to do that?

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