Online retailer (NASDAQ:OSTK) and its big cousin (NASDAQ:AMZN) reported their earnings for the first quarter of fiscal 2014 the other week. It is clear from both online retailers' financial results that more and more consumers are choosing to shop online.

While reported modest growth for the first quarter with a 9% increase in net sales, reported much stronger growth of 18.3% over last year's first quarter despite its larger size. Although is experiencing impressive online sales growth which gives it an edge over traditional bricks-and-mortar retailers, it still has a long road ahead to catch up to

The basic facts from the quarter is off to a good start for fiscal 2014 with net sales climbing $29.2 million from the first quarter of 2012 to $341.2 million. This jump in revenue resulted partly from an increase in the average order amount from $153 to $165 as well as a 5% growth in the number of orders placed on the company's site.

Unfortunately,'s profit fell to $4.0 million, or $0.16 per share, in the first quarter while in the year-ago quarter its net income totaled $7.7 million with earnings of $0.32 per share. A 25% increase in sales and marketing expenses for the quarter contributed to this decline in profit. For's sake, hopefully this increased spending will lead to higher sales volume in the future.

Just can't keep up with big brother has done fairly well for itself over the past year. Despite the stiff competition from and the bigger company's reputation among consumers, has put up a good fight. However, its annual revenue is still no match for that of, as this online retail business continues to dominate against the rest, stealing sales left and right from all retailers. To see how and compare in terms of annual revenue over the past three years, see the chart below.

Company Name

FY 2011 Revenue Growth

FY 2012 Revenue Growth

FY 2013 Revenue Growth







It would be one thing if was much smaller than but growing much faster. However, this is not the case. For the past three years, has experienced double-digit growth in revenue, and it brought in $74.4 billion in fiscal 2013 alone. In comparison, just saw its first year of double-digit sales growth in 2013 on much smaller revenue than that of

In fact, earned $73 billion less in net sales than did in fiscal 2013. All in all, is growing much faster than, and it's taking the next step for its long-term success by trying out its luck with video streaming. This latest move by will carry its business even further up the ranks from that of

Foolish takeaway
Foolish investors should take note of everything is doing to transform its company from solely operating as a retailer to operating in the world of entertainment as well. While is growing its sales year after year, it's not making the kind of sales made by For this reason, remains the king of online retail. Investors would be wise to do more research on to see what else it is currently working on to keep its business high above the rest.

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Natalie O'Reilly has no position in any stocks mentioned. The Motley Fool recommends The Motley Fool owns shares of Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.