Here's a simplified example: shipping. Let's say I sell 5,000 widgets a month. I can ship all those widgets in one big truck to my brick-and-mortar store for $10k. Or, I can ship each one to 5,000 individual customers for $10/ea... or $50k total. My pure shipping cost is five times higher.
With a store-based model, I have to pay for retail space and employees; with direct-to-home, my dollars go to pick-and-ship and warehousing. eCommerce scales better because of the capital costs of building out new retail locations (effectively higher out-of-area CAC), but not insurmountably so. E.g., Amazon vs. Walmart.
With a store-based model, I have to pay for retail space and employees; with direct-to-home, my dollars go to pick-and-ship and warehousing. eCommerce scales better because of the capital costs of building out new retail locations (effectively higher out-of-area CAC), but not insurmountably so. E.g., Amazon vs. Walmart.