Top 10 E-commerce failures

Since a long time ago, people have been trading for a living. They roamed around the streets to trade for olive oil, pottery, food, and even slaves, almost anything under the sun. Some traders gained more advantage over others because the goods were not given an actual price. Also, people who were able to bargain and argue well took the upper hand. Trading was not fair. Today, people continue to trade, but at an upgraded level. They do not need to do it face-to-face, neither would they face unfairness because all goods are labeled with their prices and all transactions are done via a systematic method. Since everything has improved and seem so great, why did people still fail? In this post, we will take a look at the top 10 dot-com flops and learn about why they failed.

1. Do not grow too fast too soon even if you have a good idea
Online grocer, Webvan made this mistake by raising $375 million in an IPO, expanded from the San Francisco Bay Area to eight U.S. cities, and built a gigantic infrastructure from the ground up, in only 18 months!


2. Unsustainable business model
Online pet-supply store, Pets.com’s popular talking sock puppet mascot failed to give pet owners a compelling reason to buy supplies online. After ordering, customers had to wait for a few days to receive their goods, which they needed immediately. In addition, Pets.com lost money because it had to undercharge shipping cost to attract customers. Eventually, it collapsed.


3. Think twice about your idea before you start - it might turn bad and cause you to lose more than what you earned
Online store and delivery service, Kozmo.com provided good services such that customers could receive the goods they ordered within an hour, rain or shine. Unfortunately, it took Kozmo.com some time before it realized that this idea would cause it to lose a lot of money on delivery, especially when customers only ordered a pack of sweets or a DVD.


4. Consider better ideas that might overtake your good dot.com idea
Flooz.com was an online currency designed to replace credit cards, had boggled the minds of many as to in what way is this alternative better and safer than actual credit cards or gift cards. Eventually, it went bankrupt in August 2001 along with its competitor Beenz.com.

5. Spending outweighed the company's income
Like Pets.com, eToys spent millions on advertising, marketing, and technology and battled a host of competitors.


6. Do not employ more than what you need and use only the resources that you have
Online fashion store, Boo.com’s website relied heavily on JavaScript and Flash in the days of 56k modems, thus users had to wait a long time for it to load. Also, they employed 400 people when they only needed 30.


7. If product or service is no good, no promotion or program will make it work
Microsoft live search launched two programs to entice users to use Live: Cashback and SearchPerks. Both did not have a significant effect on traffic numbers because Live's search results were very poor. Live search has 10% of the search market.


8. Ensure than what you spend on promotion does not exceed what you earn
Disney was never able to make Go.com popular enough to validate the millions spent on promotion.


9. Running out of money
Kibu.com, an online community for teenage girls, ran out of money and closed the site 46 days after the launch party.


10. Internal conflict can cause you to go bust
Personalities and egos clashed during long work hours, one partner was ousted, technology was stolen, and they never got the software to work as it should have. A competitor eventually took over GovWorks in 2000.