Buy.com led the Cyber Monday charge this year, having the best sales day in its history. While predictions for this year's retail holiday season have been pretty dire, it would seem more holiday gift buyers have the "shop in your shorts" mentality, taking advantage of free shipping and no sales tax to ramp up online holiday retail sales.

Buy.com, which competes with larger retailer Amazon.com (NASDAQ: AMZN), has been around for over 10 years and features retailer categories just as diverse as its larger competitor. Some of the folks I've talked to say that, for the first time, they are doing the majority of their shopping online this year, mostly due to the deals they receive, the lack of local sales tax and with the majority of goods being offered with free shipping.

In other words, we're all value shoppers this holiday season. Once the Black Friday novelty wore off last weekend and prices returned to normal, shoppers kept lining up at the virtual doors of online merchants and will continue to do so until the end of the Christmas holiday. When one of the largest online retailers has its best sales day in its history despite the bleakest economy in its history, perhaps that is a signal of a paradigm shift. For many of us, it happened a long time ago. For the others, the gravy train of online shopping is becoming a clearer picture every day.

Amazon.com (NYSE:AMZN)still gets all the headlines for being the Internet's leading online-only retailer, but there are plenty of other games in town. How well are they doing, though? Buy.com has been around since early 1998 and sells over two million products to an established base of 10 million regular customers. Is that enough for the company? Founded by an former Ingram Micro executive (Scott Blum), Buy.com apparently is still going strong, although I doubt it will ever match Amazon.com from just about every angle.

Buy.com's gross profit of $60 million in 2006 seems like a pittance compared to other internet companies, but for a retailer that sits in the shadow of Amazon.com every day and generally seems content on being a market follower instead of leader, 2006's profit number seems pretty decent.

Buy.com's President and CEO, Neel Grover, continues to say that Buy.com's focus in the past and now has not changed: it wants to sell brand names at commodity prices. Interestingly, that service is not mentioned in that statement. But here is the twist: Buy.com uses a virtual model -- it has no real inventory.

Fleshed out during Blum's Ingram days, Buy.com has connections to a few dozen distributors who store and ship orders for Buy.com customers. In contrast, Amazon.com does have physical locations and inventory and handles its own inventory. Is that how it provides superior customer service, or is that a weakness of online retailing? Buy.com would say the latter, most likely. Maybe, just maybe, Buy.com's "no inventory" model will soon become a competitive advantage.