The internet retail sector has produced some of the largest and fastest-growing companies in the world. Yet many investors eventually discover that massive sales figures do not always translate into equally impressive profits.

A company growing revenue at 30%, 40%, or even 50% annually tends to attract attention quickly. Investors naturally gravitate toward businesses that appear to be capturing market share, expanding into new regions, and building larger customer bases.

A company can post impressive revenue gains for a few years, but if competitors can easily copy its business model, those gains may not last. The most successful internet retail companies build advantages that become stronger over time.