Levi Strauss Throws In The Internet Sales Towel

Selling online is difficult – and costly. Clothing giant, Levi Strauss [1], confirmed last Friday that it will discontinue selling its products via the web. The company now will allow Macys.com [2] and JCPenney.com [3] to sell Levi’s and Dockers products to online customers.

Levi Strauss discovered what other online stores have known for a while now; it’s very expensive "to run a world-class e-commerce business." And though it’s more costly, it’s usually not more profitable, unfortunately. Other e-commerce companies have struggled with this. Just ask Amazon.com [4].

Manufacturers going online also have to keep retailers in mind. Although Levi Strauss denies that retailers complained about direct competition from the Levi site, other manufacturers signed on for trouble when they went direct to the public. Compaq Computer Corp. [5] recently squabbled with retailers over the computer company’s online discounting. Levi Strauss will keep its expensive web site and may sell products online for "special events" in the future. However, it’s clear that it won’t be direct competition for offline retailers.

And while Levi and others are scrambling to leave the Internet sales world, many more are signing on. According to a new study [6] by researchers at the University of Texas, revenues for Internet businesses will total an estimated $507 billion in 1999.