A structural model for sales in the e-retailing industry

Abstract

This article analyses intangible constructs that affect sales on the Internet retailing industry. We suggest an explanatory model for the success of retailers that operate on the Internet. Non-financial information has been used to identify several intangible constructs: ‘web traffic generation’, ‘relevance in search engines’, ‘link popularity’, and ‘blogs popularity’. The success is measured through items derived from financial statements: sales and profits. The model has been built within a structural modelling framework. It has been estimated using Partial Least Squares with a sample of USA e-tailers. The results show that there is a significant relationship between the intangible constructs and accounting figures. This relationship is stronger when we consider Sales from Internet Operations rather than Total Sales or Net Profit.

Keywords:

• Partial Least Squares (PLS)
• structural equation model (SEM)
• dot com
• electronic commerce
• non-financial information
• search engine optimization (SEO)