The example of failure in e-commerce is the eToys.com, it launched in June 1997, by the founders Toby Lenk, Frank Han and Bill Gross, and was originally with the purpose of selling educational toys. It had a highly successful Initial Public Offering that sold at $20 at the first day of the offering, and then the share price went up to be $76 in the same day. It was the benchmark for the other toys site at that time.
However, in year 1999, during the Christmas, the demand for toys increased in vast, especially that were school holidays. The eToys.com did not manage to handle the orders that flushed into their website. They failed to deliver the products in time, and many customers complaint that they received the wrong products. Consequently, the public have lost confidence to them; therefore do not have the guts to order the toys from them anymore.
One of the causes of failure is because the company did not think about the problems that will occur during the holidays, which will affect their company. The demand for toys increased in a sudden, especially when that was during the Christmas. They did not prepare for the holiday, which needs more workers to handle the orders, produce the products, and ship the merchandise to the customers. These unprepared situations have caused late deliveries to the customers.
Furthermore, the company might have insufficient capital to invest heavily to expand the business. It might not have the cash resources to purchase the raw materials for production, to purchase the machinery for better quality and speedy production, to purchase motor vehicles for the quicker deliveries. These have caused the eToys.com did not manage to handle the orders in time.
On the other hand, the products that are selling online are displaying with pictures, which are untouchable, therefore it may be unimpressive and unpersuasive. This causes the consumers rather shop in the real world than shop online. This is the common reason of failure faced by most of the e-retailers.
However, in year 1999, during the Christmas, the demand for toys increased in vast, especially that were school holidays. The eToys.com did not manage to handle the orders that flushed into their website. They failed to deliver the products in time, and many customers complaint that they received the wrong products. Consequently, the public have lost confidence to them; therefore do not have the guts to order the toys from them anymore.
One of the causes of failure is because the company did not think about the problems that will occur during the holidays, which will affect their company. The demand for toys increased in a sudden, especially when that was during the Christmas. They did not prepare for the holiday, which needs more workers to handle the orders, produce the products, and ship the merchandise to the customers. These unprepared situations have caused late deliveries to the customers.
Furthermore, the company might have insufficient capital to invest heavily to expand the business. It might not have the cash resources to purchase the raw materials for production, to purchase the machinery for better quality and speedy production, to purchase motor vehicles for the quicker deliveries. These have caused the eToys.com did not manage to handle the orders in time.
On the other hand, the products that are selling online are displaying with pictures, which are untouchable, therefore it may be unimpressive and unpersuasive. This causes the consumers rather shop in the real world than shop online. This is the common reason of failure faced by most of the e-retailers.
