An Example of an E-commerce Failure and its Causes

Pets.Com (1998-2000)

There are many professionals that predicted the E-Commerce will have its own success. However, there is still some hidden E-Commerce that facing failures. One of the top 10 examples is the Pets.com. The Pets.com was started by Greg McLemore in November 1998. This company was purchased in early 1999 by a venture capitalist. Below are the main causes that lead to failure of Pets.com:-

i)Unstructured capital
The usage of the company’s capital for pets.com was not well organized. This is due to poor business planning on the advertising campaign alone, Pets.com already spent more than $100 millions in supporting it. Besides that, they had spent a lot in the marketing and sales. The loss had increased from since the company start business until in year 1999, it had reached loss of $61,778,000.

ii)Customer dissatisfaction
Most of the Pets.com customers are unhappy with this company’s delivery system. The company promised the customer on delivery of 3 days or less but they did not manage to do it. Furthermore, some of the customers needed to wait several days just to get their pet’s food.

iii)Poor management on costs
The company has a poor management on setting up the cost for the products and usually they will charge the products below the required cost. Thus, it makes the company to gain loss rather than profits. Moreover, the company had undercharge for shipping costs just to attract the customers but it actually facing loss on most of the items it sold.

The idea of pets.com was inadequate and there are a lot of problems that face by this company. Thus, it had taken over by the petsmart.com.

An example of an E-commerce success and its causes

One of the most successful examples of e-commerce is eBay. eBay is the world's largest online retail commerce which offering customers an opportunity to come together in one marketplace and be able to buy and sell a wide range of items. Items on eBay are listed by categories and anyone with an eBay account can bid on the item of their choice. Customers can find about anything on eBay, including collectibles, car, real estate, CDs, clothing, concert tickets and so on. Besides that, eBay also have Paypal, Skype, Stubhub, and other businesses which allow payment and money transfers to be made through internet.

There are few reasons eBay become success and this is the critical issue which people want to know. eBay become so popular because of their good strategic in the internet which provide user-friendly website to all people. eBay offers some free tutorials, fun video clips and free online courses to the beginners who are new to eBay.




For further information about the free tutorials and video clips, please refer to:
New to eBay: http://pages.ebay.com/education/new.html
How to buy: http://pages.ebay.com/education/buying.html
How to sell: http://pages.ebay.com/education/selling.html

Besides that, eBay provides various online help features, including e-mail contact forms, help topic, "Live Help" which allow customer to chat with customer service representatives via instant messaging or email. This shows that eBay serve customer in a more efficient and effective ways where eBay can quickly response to the customer problem through internet to make the customer satisfy with their service.

In addition, users in the eBay can easily shift from being a buyer to a seller on the website. Being a seller doesn’t necessarily have to go out and get a business license where there may be a limited number of buyers. One can easily sell products and services through eBay by registering with the website authority. On the other hand, eBay has made buyers more convenient and comfortable with online shopping at home. Some of the users enjoy looking around for merchandise and competition of the bidding process which is online auction. Therefore, eBay become online marketplaces which allow people to enjoy the experience of the online shopping. Furthermore, the majority of people who are selling on eBay are warm, trustworthy and honest. eBay is creating a friendly environment which allows users to come to their website and feel comfortable shopping there as well as getting reasonable price and a bargain.

In the conclusion, eBay provide a series of strategies to keep customer and seller in their website. Thus, there aren't many websites on the Internet that can claim the success that eBay has enjoyed. Despite those challenges and failure faced by eBay, the future of eBay looks bright, as eBay growth continues to be strong.

How E-commerce can reduce cycle time, improve employees’ empowerment, and facilitate customer support?

Whatever it is your business sells, you need to deliver it better, faster and cheaper in order to satisfy customer need. Therefore, cycle-time reduction is a vital tool in doing so. In these days, e-commerce goes hand-in-hand with cycle-time reduction.

E-commerce can reduce the amount of time in processing the transaction. For example, e-banking help user to bank in their money faster without the need to go to the bank, company can make purchases order from their supplier through the website. By doing so, it can also help to reduce the paper work. Online booking air ticket service has make it convenient for people to buy air ticket at any time, so that people can save time without the need to go to the travel agency to buy the air ticket. This reduces the cycle time of processing the transaction because the company can process the customer’s information immediately compared to time wasted for waiting customer to fill in the form if they are physically present in the air ticket company.


To keep customers happy, company must able to respond customer questions quickly and accurately. E-commerce help to provide such assistance through a static website FAQ (frequently asked questions) which provide a medium for customer to ask a question regarding the product or services of the company. Once the questions are entered by the customer into the system, the system will quickly respond the customer.Thus, e-commerce can also help to facilitate customer support.


In addition, e-commerce can help to improve the employees’ empowerment .In order to respond to customer inquiry or demand quickly, it is important for the company to allow the employees to make the decision. For example, decision to provide purchases discount, extension of credit term, negotiate purchases price with the customer, or making appointment. If the employee can make such decision without the need to get approval from few levels of management, it can help to fasten the e-commerce transaction processing time.

In conclusion, e-commerce has been very useful in reducing cycle time, facilitate customer support and in improving employee empowerment. Organization should introduce e-commerce into their business to enhance the efficiency and effectiveness of their transaction and daily activities.

History and evolution of E-commerce

E-commerce is a technology-mediated exchange between parties irrespective individuals or organizations as well as the electronically based intra-or inter-organizational activities that facilitate such exchanges. In addition, E-commerce consists of the distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks. E-commerce helps to generate demand for products and services and improves order management, payment, and other support functions.

Previously, buying and selling activity was conducted manually and both demander and supplier of goods and services have to meet face-to-face to carry out the transaction. As we move into electronic era, the way individuals and organizations conduct transaction and business has changed to electronic commerce from manual way. In electronic commerce, we are engaging in paperless and limited physical interaction. With technological advancement, we are able to communicate and conduct meeting with customer and supplier using teleconferencing and videoconferencing. The emergence of electronic commerce started in the early 1970s with one of the system which is electronic funds transfer (EFT), which allows organizations to transfer funds between one another electronically. Not long after, electronic data interchange (EDI) was introduced. This technology helps to extend interbusiness transactions and provide transaction and information exchanges from supplier to end user.

E-commerce began to evolve in the mid 1800s when Telegraph is used. The usage of telegraph enables us to order goods and services remotely and we do not have to go to a particular location to make an order or inquire about the goods and services. After that, we start to have house telephone that requires the use of telephone line followed by hand phones. With evolution, the hand phones available are in different shapes, sizes, design and function. With technological advancement, we are able to connect to internet using cell phones and conduct transaction using internet. Besides that, we can make phone call to supplier to make an order directly compared to telegraph which takes longer time to pass the message to the other party. The invention of computer in the early 1800s has make communication more easily and flexible. We can conduct transaction using internet without the need to meet each other face-to-face in a certain location. Moreover, customer can make an order online and there are options that they can choose and some supplier even has websites that allow customer to make appointment and customization according to their preference. For example, there are certain restaurants that allow you to make reservation according to the seats available, order the food in advance, decide on the mixture of the food, decorations preferred and so on.

In conclusion, the evolution of e-commerce has brought numerous benefits and convenient to our lives. However, we should not misuse the technology to conduct some illegal activities. The creation of e-commerce should be appreciate and used to create value to the people and society.

For further information, please refer to:

• http://ict.cdimm.org/man/engleza/ecomm03.pdf
  
• http://newmedia.medill.northwestern.edu/courses/nmpspring01/brown/Revstream/history.htm