A variety of trading characteristics are taking shape on the Internet, with many businesses currently unable to measure some of the basic ratios that drive site performance. These are the findings from NetBench, a survey of online retailers produced by specialist consultant MHE in association with ShopOnTheNet.com, one of the UK's largest portals.

As in all retail consumer-facing channels, businesses need a genuine understanding of the key levers that deliver sales and profit performance. In Internet retailing, these levers are only now emerging and the winners will be those companies that understand and use them effectively at an early stage of development.

Performance measurement is a key management tool and is required for the development and valuation of retail Internet operations. This is as true in the current climate where consolidation and integration of Internet and store-based retailers is a key focus (as evidenced by the takeover of jungle.com by GUS) as it was when positive market sentiment drove equity valuations for Internet-only retailers to unprecedented levels at the start of the year.

In the first wave of this research, over 190 companies responded to a detailed questionnaire which tracks the business-to-consumer (B2C) electronic commerce sector.

The majority of companies taking part in the survey trade internationally from their website. After the UK, the main countries served were the USA, Germany and France.

The highest financial priority for respondents is profitability. Return on investment currently ranks as the lowest priority, although MHE estimates that requests from investors will soon drive return on investment quickly up the order of priority.

Respondents consider service standards to be a much higher priority than low prices, although this contradicts MHE's recent Webshopper survey which found that online customers regard low prices and good value for money as their key purchasing drivers.

Jewellery and sports goods, by their very nature, are more likely to be commercially successful on the Internet the survey says.

The 60-page report, incorporating findings from NetBench and Webshopper, is available from Management Horizons Europe at a price of £950. For further information, see: www.mheurope