Small Orders Make Online Less Profitable, Says Officeworks

The managing director of Australian office supplies retailer Officeworks said it is more difficult to make money online because orders are smaller.

Speaking at the Retail World conference in Melbourne, Mark Ward said his firm made 13 per cent of its sales online but less than 10 per cent of its profits despite lower staff and rental costs, according to The Australian newspaper. 

'We are selling more online than we ever were before. But we are selling them for less as basket sizes have come down because we have made life so convenient for the customer,' he said. 

He said it was not so much a problem as an issue for the firms supply chain because of the larger number of transactions and the lower profitability in the future. 

Myer managing director Bernie Brookes said online was 'potentially' more profitable but wasn't today. However, he said over the past 18 months Australian retailers have got 'fully in the game and understand the opportunity' presented by the internet. 

He pointed to Britain and the US where he said 15 of the top 20 retailers were tradtional bricks and mortar retailers.