As we know there are lots of successful virtual e-commerce companies such as Google, eBay, yahoo, amazon and so on. Yet there are still a number of e-commerce companies fail to maintain revenue through e-commerce business.a
Boo.com is one of the top 10 dot-com flops. Boo.com was a United Kingdom internet company founded by ernst Malmsten, kajsa Leander and Patrik Hedelin, intention to sell branded fashion apparel over the internet. However, it spend $160 million of venture capital before its liquidation and was placed into receivership on 18 MAY 2000 .
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The design of the company's Web site was critical to its success. First of all, the site relied deeply on java script and flash technology to display pseudo-3D views of wares as well as Miss Boo, a sales-assistant-style Avatar. The site also faced a barrage of criticisms for being painfully slow and only accessible to on-line shoppers with 56 kilobytes per second modems and above. So On-line shoppers needed fairly high-powered computers and fast modems to access Boo.com. There is limited space available to display the product information to customer due to the complicated design that required to be displayed in a fixed size windows.
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Boo.com spent £125 million , to market itself as a global company but then had to deal with different languages, pricing, and tax structures in all the countries it served. However, the sale do not up to their expectation because there were a high numbers of returned products. Costs increase due to the poor management and lack of communication between departments. The company also recruited a large number of staff with lack of direction and executive decision, this will increase the pay-roll cost. As a result the company failed to attract the revenue it needed to survive.
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Nevertheless, in May 2007 Web Reservations International turned boo.com into a travel site with reviews and listings. WRI claims to be one of the world’s most successful e-businesses . "boo.com in new travel guise
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The reasons why businesses fail is that the basic idea was wrong, Start-up capital was inadequate, there was wasteful use of capital, inability to deal with a variety of people - suppliers, customers, employees, poor organizational management, lack of managerial ability and lack of market specific experience. If a company can cope with all those circumstances , it will be a successful e-commerce companies.
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3 comments:
yeah , you are right. For me , lack of managerial ability and lack of market specific experience is the main causes that can cause the virtual e-commerce companies facing liqudition.
Woow~!!
this is a good reading to me as i am going to create my own e-commerce business soon.
Thanks for the information provided.
Thanks again for reading and comment on this post.
to form a business, the important point is to manage your cash flow and maintain customer.
However, if you do not have any related experience on the business, you should refer to the case provided in the post or obtain advises from profesional to avoid any problem especially liquidity problem.
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