The Ghosts of E-Commerce Past

First, there was the thrill of living on the edge. Long before the e-commerce shakeout began, analysts warned of its arrival. And when the first collapses finally came, they carried with them all the excitement of a building demolition.

For a while, each and every subsequent wipeout had our undivided attention. It was like one of those police-chase crash shows, without the shaky video.

But six or so months and 200-plus dot-coms later, the thrill is gone. Companies are taking leave of this earth on almost a daily basis. Some are so small their absence is barely noticed; others are household names whose demise make us wonder briefly.

Though they have become old hat, there is a danger in getting complacent about dot-com failures. Not every instance should cause alarm, and they all have plenty in common — but they shouldn’t all be lumped together, either. Every company has a story, and we should try to listen to as many of them as possible, lest we miss the important lessons.

Glug, Glug

After flying high enough to consider an IPO early last year, recently went out of business. Now, clearly there’s no shortage of demand for alcohol. And the company had something of an advantage in that it didn’t carry inventory — it connected online buyers to distributors.

So what gives? Regulation, of course. — and its cousins like — can’t sell their products everywhere. Keeping on top of each state’s rules about mailing booze is a lot of work, maybe a bit too much work for a startup to handle. The folks at probably thought it was better to start building market share now and let the regulations part take care of itself over time.

The strategy didn’t work, and the lesson here may be that starting off without one of the Web’s biggest advantages — the ability to sell and ship anywhere — is a recipe for doom.

Signed, Sealed, Sent also shut down in recent days. The gift site, by all accounts, had a slick radio ad campaign and a pretty sizeable legion of fans. So, what, aside from the obvious lack of cash, led to its collapse?

Over-accelerated growth appears to be a culprit, as does a lack of concern during its salad days about the bottom line. A reporter who visited the company last year found out that the 100 or so employees at the headquarters outside Boston had been trained to be a human jukebox. All someone had to do was call out a number and they’d start singing.

Neat trick. Maybe it built a little team spirit. But how much time did that take to organize? However long it took, it’s probably time that everyone who is now polishing their resume wishes was spent finding customers or trimming costs.

Where Angels Fear To Tread

Then there’s, dead and gone after four months of life. Four months — some mosquitoes live that long.

Well, Savvio was using a reverse name-your-price model. That’s right, the first word that comes to mind is “Priceline.”

Probably enough said there, except maybe to restate the obvious lesson: If you can’t build a better mousetrap, why bother building the same one as the other guy, especially if he’s already been in business for more than two years and can’t keep his own stock out of the trenches?

Solve Real Problems

Also new to the dust heap of unwanted dot-coms is, a New York-based company that enabled diners to use the Web to make reservations at their favorite restaurants.

As one message board wag put it: What’s so hard about picking up the phone and calling the restaurant? Absolutely nothing, which is why Foodline is in bankruptcy court figuring out how many pennies on the dollar to pay its vendors.

Again, the lesson is obvious but worth repeating like a mantra: If there’s no problem, the solution probably isn’t going to fly.

There are another 200 more of these examples out there, 100 or more of them engaged in business-to-consumer e-commerce. Each has a lesson to tell, if we take the time to listen.

But if, in our fatigue and boredom, we turn a deaf ear, those lessons are destined to berepeated again and again.

What do you think? Let’s talk about it.

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Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.

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