But the greater economies of scale in inventory and distribution linked to Web sales makes them more profitable.

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"Inventory planning, your systems, your ability to scale... that's all great in theory, " he says.

BBC: American Giant: The problems of being an overnight success

The "bricks and clicks" model, as Lehigh University's Snyder describes it, calls for moving some goods to large centralized distribution centers, which have the economies of scale to lower the carrying costs of inventory.

FORBES: Magazine Article