One example of an e-commerce failure is Pets.com.
Pets.com was an online provider for pets' supplies and accessories directly to the customer over the World Wide Web. It was launched in August 1998 but went into liquidation in 268 days. In early year 1999, however, the domain and site was purchased by a venture capitalist and it started a media advertisement blitz through the radio, television and a Pets.com magazine. Its mascot, the Pets.com sock puppet, was very famous and became well known and the company expanded their market and went public in February 2000. Click here: Pets.com
However, by fall 2000 the dot.com bubble burst, and despite their efforts, the company was unable to raise further capital, had to sell some of its assets as they were unable to find a purchaser or financial banker and had to shut down its operations on 9th November 2000. Click here: Pets.com goes belly up
Lack of a workable strategy plan is another reason for Pets.com to close down its business. They were always giving more discounts and free shipping to their valued customers. In fact, they were unable to turn in a profit because of the heavy cost for the shipping of bags of dog litter and cans of pet food. The company did not make any profit from the selling of merchandise because the company was selling them at about one-third of the original cost price to its customers. The company had negative gross profit margin for the first two quarters in the year 1999, while in the third quarter, net sales before operating expenses amounted to $1.62 million. Other than that, the company was trading below $1 for the few months before it closed down its business. Click here: Pets.com
However, by fall 2000 the dot.com bubble burst, and despite their efforts, the company was unable to raise further capital, had to sell some of its assets as they were unable to find a purchaser or financial banker and had to shut down its operations on 9th November 2000. Click here: Pets.com goes belly up
Lack of a workable strategy plan is another reason for Pets.com to close down its business. They were always giving more discounts and free shipping to their valued customers. In fact, they were unable to turn in a profit because of the heavy cost for the shipping of bags of dog litter and cans of pet food. The company did not make any profit from the selling of merchandise because the company was selling them at about one-third of the original cost price to its customers. The company had negative gross profit margin for the first two quarters in the year 1999, while in the third quarter, net sales before operating expenses amounted to $1.62 million. Other than that, the company was trading below $1 for the few months before it closed down its business. Click here: Pets.com
Employees who resigned from the company were not replaced which caused the company to operate less effectively and efficiently, and was also another reason for Pets.com to close down its business.
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Reference(s):
Austria Farmer, M. (Sept 7, 2000). Pets.com moves part of litter to Midwest. Retrieved Jan 31, 2011, from http://news.cnet.com/Pets.com-moves-part-of-litter-to-Midwest/2100-1017_3-245416.html.
Barrett, L. (Nov 7, 2000). Pets.com goes belly up. Retrieved Jan 31, 2011, from http://news.cnet.com/Pets.com-goes-belly-up/2100-12_3-267376.html.
Junnarkar, S . (Dec 13, 1999). Pets.com to play in public market. Retrieved Jan 31, 2011, from http://news.cnet.com/Pets.com-to-play-in-public-market/2100-1040_3-234303.html.
Mast, C. (Dec 13, 2000). Living Through the Death of a Dot-Com. Retrieved Jan 31, 2011, from http://www.businessweek.com/careers/content/dec2000/ca20001213_830.htm.
Pets.com. (Nov 7, 2010). Retreived Jan 31, 2011, from http://en.wikipedia.org/wiki/Pets.com
Austria Farmer, M. (Sept 7, 2000). Pets.com moves part of litter to Midwest. Retrieved Jan 31, 2011, from http://news.cnet.com/Pets.com-moves-part-of-litter-to-Midwest/2100-1017_3-245416.html.
Barrett, L. (Nov 7, 2000). Pets.com goes belly up. Retrieved Jan 31, 2011, from http://news.cnet.com/Pets.com-goes-belly-up/2100-12_3-267376.html.
Junnarkar, S . (Dec 13, 1999). Pets.com to play in public market. Retrieved Jan 31, 2011, from http://news.cnet.com/Pets.com-to-play-in-public-market/2100-1040_3-234303.html.
Mast, C. (Dec 13, 2000). Living Through the Death of a Dot-Com. Retrieved Jan 31, 2011, from http://www.businessweek.com/careers/content/dec2000/ca20001213_830.htm.
Pets.com. (Nov 7, 2010). Retreived Jan 31, 2011, from http://en.wikipedia.org/wiki/Pets.com
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