Reasons for

E commerce
failures and
E commerce
failures
 Visibility on the Web
• Studies show that the same is true
on the web; it is just that the best
locations are on the first page of
Google's search results page, Not
just any first page but [4]Google's
first page, which represent 80% of
all search traffic. Winning front-
page placement on Google requires
a through understanding of how
search engines operate, web honed
marketing skills, time and technical
expertise in search engine
 Relativity of Keywords
• Because users are so mobile,
websites must be designed with a
certain amount of stickiness. This
stickiness is not produced with
expensive graphics and Webmaster
tricks but in the sites ability to
address the users needs based
upon their keyword query.
 The Flat Nature of the
Web
• The fact that anyone can setup a
website and become a competitor
with [5]very little investment
means the competition from small
online stores is significant and can
even be dominate in some
verticals.
 lack of content
• Content needs to add information to the
web. It needs to add value to the web and
be something fresh, new, or a differing
opinion. Content is writing about your
particular subject or offering in such a
way that it helps your rankings with the
major search engines.
• Search engines will analyze your site to see
if it offers answers to particular searches
that are made through their services. If it
does, then for that set of keywords, you
may be ranked (and ultimately get more
traffic.) If it doesn't, like the great majority
of sites on the web, then you will never be
 too many banner ads, colors,
flashy text or external links
• There are tons of other websites that
will create banner ads for you to
place on your site. Don't do it. They
don't work, they won't make you
any money and you are just helping
that company's search ranking.
Only provide external links on your
site that help your business
because an external link is a way
for the surfer to leave your site.
They can get distracted and not
ever return to your offering.
 respond to visitors in a timely
manner.
• Not only do you need to respond
quickly, you need to respond
professionally and you need to let
them know that you read and
understand their email. You should
include all of your contact
information and you have to use
'spell-check'.
•
• Ineffective strategic planning.
No one plans to fail, but failing to plan is a good way to do it. You
need to know who your potential customer is, looking at
demographics, but also at psychographics. You need to know how
you will reach them and how you will convert visitors to buyers.
You need to know how you turn buyers into repeat buyers.
Ideally, you will also know how to turn buyers into word of mouth
endorsement for your company. And, you need to include all of
that in the planning stages of your website. 
• Many "web site designers" don't know anything but design.
If your website designer does not know marketing, conversion,
usability and compatibility issues the bottom line is that you end
up with a website that looks great, at least to you, but doesn't do
much to ring the cash register. 

•
• Many marketers don't know design.
The web isn't television, or radio, or direct marketing. Using a
methodology suited to another medium (such as television or
direct marketing) is like running a text ad on tv. You could, but
why would you want to? 
Making use of the unique aspects of marketing that only the web
can offer will result in greater response and profit than using any
one offline method alone. A few marketers are finally cluing in to
the fact that layout and well chosen graphics can vastly affect
your bottom line, but they are few and far between. 
• Poor html development skills
Anyone can pick up a copy of Frontpage or any other such
"design software" and hang out a shingle. And they do. I have
no problem with anyone building their own site. Quite the
contrary, I applaud anyone that wants to learn how to build and
maintain their own site. (That's why I offer base layout &
template design.)
However, when a website designer does not know why errors
occur, or do not know that the sites they build are not browser
and platform compatible - and they are charging people for
their work - their customers will pay for the designer's lack of
knowledge in lost sales. 
• Lack of promotion
Websites don't come with traffic at the door. A well designed
website is ready for promotion. It works in all browsers and on
all platforms. It looks good no matter what monitor size the
visitor has. It works on a MAC and it works on a PC. It works in
IE and it works in Opera or Firefox. It is coded and ready for the
search engine bots. It has a mailing list database ready to
accomodate the people that will join your list or otherwise get
into your conversion plan.
But, it doesn't come with a line up of people ready to buy. This
seems to be shocking to many website owners. They seem to
think that if they have a nice website, the dollars will start
rolling in. Not so. Good design means it works for everyone and
is ready for you to work it. Bad design means it doesn't work for
• Forgetting to Budget for Maintenance-
As a rule of thumb, the annual
maintenance budget for a website should
be about the same as the initial cost of
building the site, with 50 percent as an
absolute minimum. If you simply spend
the money to build a glamorous site but
don't keep it up to date, your investment
will very rapidly turn out to be wasted.
•
• Lack of patience- You got to have
enormous patience if you are running a
new eCommerce application. It won't fly
from day one. Initially it will suck, then it
will crawl, and then walk and after lot of
time and money it will start flying. So you
won't be an internet millionaire overnight.
Develop patience, if you follow tips 1 and
K ib u . co m
P ro d u cts : C h a t, m e ssa g e b o a rd s,
o rig in a l content
Ta rg e t D e m o g ra p h ic : Teen Girls

S u m m a ry : K ib u . co m h a s o n e o f th e
stra n g e st sto rie s fro m th e d o tco m
e ra : E ve n a s m a n y w o m e n 's co n te n t
site s a n d p o rta ls w e re clo sin g , K ib u
w a s se cu rin g a g re a t d e a lo f fu n d in g
a n d p a rtn e rsh ip s fro m m a jo r b ra n d s
a n d co m p a n ie s, m a in ly d u e to th e
sp e n d in g p o w e r o f th e site 's ta rg e t
d e m o g ra p h ic . M e a n w h ile , th e
e d ito ria l le a d e rsh ip w a s virtu a lly
n o n existe n t, th e b a cke n d w a s n o t
b e in g d e ve lo p e d , a n d th e to p
exe cu tive s w e re M . I. A . B y a ll
a p p e a ra n ce s, th e re w a s ve ry little
a ctu a l w o rk b e in g d o n e to ju stify th e
h yp e su rro u n d in g th e site . A fte r o n ly
4 6 d a ys, th e site clo se d it's d o o rs.
Pse u d o . co m
P ro d u cts : C h a t, A u d io a n d V id e o
co n te n t

Fo u n d e d : 1993

S u m m a ry : B e fo re th e re w a s
Yo u Tu b e , th e re w a s Pse u d o . It d id n o t
fe a tu re cro w d so u rce d co n te n t like
Yo u Tu b e , b u t it d id a tte m p t to o ffe r a
w id e va rie ty o f vid e o co n te n t to it’ s
a u d ie n ce . B e fo re it’ s b rie f life a s a
vid e o site , th e co m p a n y h a d a
lu cra tive co n tra ct w ith Pro d ig y , w h ich
w a s o n e o f o n ly 2 IS Ps se rvin g th e
p u b lic in 1 9 9 3 . It fo llo w e d b y
stre a m in g a u d io - o n ly sh o w s, th e n
vid e o . It m a y w e llh a ve b e co m e
Yo u Tu b e if th e in te rn e t m a rke t h a d
n o t n o se d ive d b e tw e e n 1 9 9 9 a n d
2 0 0 0 , w h e n Pse u d o ’ s la ck o f in ve sto rs
fo rce d it to clo se its d o o rs.
W e b va n . co m
P ro d u cts : C h a t, m e ssa g e b o a rd s,
o rig in a l content
F o u n d e rs : S te p h a n Pa te rn o t a n d
To d d K rizle m a n

S u m m a ry : B a se d p a rtia lly o n th e
A m a zo n m o d e l, W e b va n ’ s m issio n
w a s to d e live r g ro ce rie s to cu sto m e rs
w ith in 3 0 m in u te s o f th e o rd e r. T h e
exe cu tio n o f th e id e a h a d tw o fa ta l
fla w s: n o n e o f th e u p p e r
m a n a g e m e n t h a d e ve r w o rke d fo r a
g ro ce ry -re la te d b u sin e ss, a n d
w id e sp re a d o ve rsp e n d in g d rie d o u t
in ve stm e n t m o n ie s b e fo re th e
co m p a n y h a d a ch a n ce to sp re a d
b e yo n d it’ s in itia l a re a o f co ve ra g e
te n m a rke ts.
Ya d a ya d a . co m
P ro d u cts : B ro w se r a n d p o rta l
te ch n o lo g ie s fo r P D A s a n d
sm a rtp h o n e s

S u m m a ry : T h o u g h it is n o t th e m o st
fa m o u s o r h ig h ly m o n e tize d co m p a n y
o n th e list it is a rg u a b ly th e w o rst-
m a n a g e d a n d th e o n ly o n e w ith
o ve rtly fra u d u le n t p ra ctice s. T h e
co m p a n y p u rsu e d ra p id g ro w th a n d
a m b itio u s a d ve rtisin g e ve n a s th e y
p u ffe d u p th e ir to ta lcu sto m e r
co n tra cts to 1 2 tim e s th e ir a ctu a l
n u m b e r. P la g u e d b y p o o r
m a n a g e m e n t, in a d e q u a te
in fra stru ctu re , a n d n u m e ro u s
d issa tisfie d cu sto m e rs a n d
ca n ce la tio n s, th e co m p a n y sh u t d o w n
in 2 0 0 1 . R e p o rte d ly , se ve ra lla id - o ff
e m p lo ye e s n e ve r g o t th e ir
co n tra ctu a lly -m a n d a te d se ve ra n ce ,
Flo o z. co m
P ro d u cts : O n lin e cu rre n cy
C e le b rity S p o k e sp e rso n : W h o o p ie
G o ld b e rg

S u m m a ry : T h e co n ce p t is sim p le :
b u y o n lin e cu rre n cy to g ive a s g ifts,
so th a t frie n d s a n d fa m ily ca n sh o p
o n lin e w ith o u t a cre d it ca rd . H o w e ve r,
Flo o zm a d e a lo t o f w ro n g tu rn s in
a tte m p tin g to e sta b lish th e ir o n lin e
cu rre n cy b u sin e ss. T h e ir h ig h -p ro file
ce le b rity e n d o rse m e n t d id n o t h e lp
th e m . T h e ir lim ite d p a rtn e rsh ip s
m a d e th e ir o n lin e m o n e y n e a rly a s
u se le ss a s M o n o p o ly m o n e y. T h e re
w a s n o t sp e cific ta rg e t d e m o g ra p h ic
fo r th e ir p ro d u ct. A llth is a n d
ra m p a n t o ve rsp e n d in g su n k th e
co m p a n y , le a vin g th e ir cu sto m e rs
w ith w o rth le ss fa ke m o n e y th e y
co u ld n ’ t sp e n d a n yw h e re .
B o o . co m
P ro d u cts : C lo th in g
V e n tu re C a p ita l: $ 1 3 5 m illio n

S u m m a ry : T h e o n ly n o n -A m e rica n
co m p a n y o n th e list, B o o . co m
a tte m p te d to se ll clo th in g a n d
a p p a re l to va rio u s co u n trie s
w o rld w id e . T h o u g h a d m ira b ly
a m b itio u s, th e ir p u rsu it o f g ro w th w a s
e n g a g e d to o q u ickly a n d fe rve n tly ,
b u rn in g th ro u g h in ve sto rs’ m o n e y a t
a n a m a zin g ra te . T h e site w a s a lso
la d e n d o w n w ith Fla sh a n d Ja va scrip t,
w h ich w a s ve ry slo w to lo a d o ve r
d ia lu p co n n e ctio n s, th e n o rm a t th e
tim e . T h o u g h th e fo u n d e rs exp e cte d
to co n tin u e g ro w th via n e w ro u n d s o f
in ve stm e n t, th e m o n e y sim p ly ce a se d
flo w in g in 2 0 0 0 , a n d b o o . co m
w ith e re d a w a y.
K o zm o . co m
P ro d u cts : H o m e D e live ry o f va rio u s
goods
E m p lo y e e s : 1 , 100

S u m m a ry : K o zm o w a s ce rta in ly w e ll-
lo ve d in th e a re a s it se rvice d ; it w a s a
w e b -b a se d d e live ry se rvice th a t
d e live re d vid e o s, fo o d a n d sn a cks,
a n d va rio u s g o o d s to th e ir cu sto m e rs.
T h e y so o n le a rn e d th a t w ith n o
m in im u m o rd e r a n d fre e d e live ry ,
th e ir o ve rh e a d fa r exce e d e d re ve n u e ,
a s o rd e rs w e re o fte n ve ry sm a ll ( a
sin g le ca n d y b a r, fo r exa m p le ). T h e y
a tte m p te d to sh o re u p th e se
p ro b le m s b y im p le m e n tin g a $ 1 0
m in im u m o rd e r p o licy , b u t b y th e n
th e y h a d sp e n t to o m u ch o f th e ir
in ve stm e n t ca p ita lto co n tin u e
o p e ra tio n s.
th e g lo b e . co m
P ro d u cts : C h a t, m e ssa g e b o a rd s,
o rig in a l content
F o u n d e rs : S te p h a n Pa te rn o t a n d
To d d K rizle m a n

S u m m a ry : To u te d b y so m e a s th e
o rig in a l so cia l n e tw o rk , fo u n d e r
S te p h a n Pa te rn o t g a in e d g re a te r
n o to rie ty a s th e p o ste r ch ild fo r th e
exce ss a n d e cce n tricity o f d o tco m
m illio n a ire s w h e n h e w a s film e d a t a
n ig h tclu b in le a th e r p a n ts, b o a stin g
a b o u t h is su cce ss a n d w a n to n
h e d o n ism . T h e site g re w o n
in ve stm e n t a n d m a rke t ca p , b u t a s
in ve sto rs b e ca m e ske p tica lo f th e
in te rn e t’ s m o n e ym a kin g p o w e r, sto ck
p rice s d ro p p e d d ra m a tica lly.
R ig h tfu lly so : th e co m p a n y n e ve r
o n ce tu rn e d a p ro fit.
Pe ts. co m
P ro d u cts : C h a t, m e ssa g e b o a rd s,
o rig in a l content
M a sco t: Sock Puppet Dog

S u m m a ry : Pe ts. co m h a d o n e o f th e
m o st visib le b ra n d in g ca m p a ig n s o f
th e d o tco m e ra , a d ve rtisin g in a
va rie ty o f m e d ia , in clu d in g o n e
S u p e rb o w l a d . T h e co m p a n y d id b risk
b u sin e ss, b u t d u e to p o o r
m a n a g e m e n t, th e y lo st m o n e y o n
m o st o f th o se sa le s, cre a tin g a n e ve r-
g ro w in g d e ficit. T h e co m p a n y w a s
d ism a n tle d in 2 0 0 0 ; tw o o f th e
co m p a n y's m o st d e sira b le a sse ts, th e
d o m a in n a m e a n d th e m a sco t, w e re
so ld fo r se ve ra l th o u sa n d d o lla rs.


Nikolai.com


 The company was a network

of children focused web sites
that included an online store
Toyboutique.com, educational
site and entertainment.
 It had attracted 500,000
visitors a month
 The day that the site folded,
the founder, Isabel Hoffman,
posted a bit of a rant about
how people don't care about
children etc., 
 Her main point is that she
(an independent content
creator) could not get the big
players to buy into her plans -
therefore she had no "buyer"