In some ways it is the same business model as mail order. Instead of a catalog on paper, it is put online. It works for those who can benefit from a broad national or international reach in terms of marketing their products and getting into an area of this country or the world that would be cost prohibitive to reach in a more traditional sense - sending in people to open a store or office. At the same time they can generate sales and leads. West Marine is a good example.
West Marine is the largest catalog sales company in the boating industry.
It is based in the Santa Cruz area, but could be in Iowa for all practical purposes. It has some percentage of its catalog online, but its Web site is really not to sell products, but to get more people on its mailing list so it can send them a catalog. The problem with sales right now is that people really aren't comfortable about making purchases online. It has to do with security, giving credit card numbers. The other aspect is that you are missing the human element.