Why e-commerce companies die
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This document summarizes 20 fast growing e-commerce companies that failed, providing key details about each such as the amount of funding raised, year founded and shut down, business model, and common reasons for failure. Most companies struggled with customer retention issues, poor management, and not having a viable product-market fit. Examples included Nasty Gal, Fab.com, Dot & Bo, Pets.com, Webvan, eToys.com, Auctionata, SHOP.ca, Beyond the Rack, PepperTap, and Shoes.com. Common reasons for failure were high customer acquisition costs, low customer lifetime value, selling products at a loss, and inability to retain customers as they scaled.
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- 1. HOW 20 FAST GROWING E-STORES FAILED Learning from e-commerce failures https://business.trybeans.com
- 2. Raised $65 million Based in Los Angeles 2006-2016Nasty Gal Retention Issues Vintage fashion for women Fashion Fastest growing online retailer in 2012 No Product Market Fit Poor Management
- 3. Raised $330 million Based in New York 2011-2014Fab.com Retention Issues Daily design inspirations Household items Invested all its resource on unsustainable acquisition No Product Market Fit Poor Management
- 4. Raised $20 million Based in San Francisco 2013-2016Dot & Bo Retention Issues Designer home furnishings Household items Customers complained of a bad quality No Product Market Fit Poor Management
- 5. Raised $180 million Based in San Francisco 1999-2000Pets.com Retention Issues Pet supplies e-retailer Pets Sold products at a loss as an acquisition tool No Product Market Fit Poor Management
- 6. Raised $650 million Based in Atlanta 1999-2001Webvan Retention Issues On-demand grocery delivery Delivery Sold an upmarket product at mass market price No Product Market Fit Poor Management
- 7. Raised $166 million Based in Los Angeles 1997-2001eToys.com Retention Issues Selling toys online Toys CAC was higher than CLV No Product Market Fit Poor Management
- 8. Raised $97 million Based in Berlin, Germany 2012-2017Auctionata Retention Issues Auction for Antiques and Arts Auction house The company was accused of fraud No Product Market Fit Poor Management
- 9. Raised $52 million Based in Toronto 2012-2016SHOP.cA Canadian Amazon General Goods CLV did not match expectation Retention Issues No Product Market Fit Poor Management
- 10. Raised $95 million Based in Montreal 2009-2016Beyond the Rack (BTR) Retention Issues Canadian Amazon Fashion Unable to get customers to come back No Product Market Fit Poor Management
- 11. Raised $52 million Based in New Delhi, India 2014-2016PepperTap On-demand grocery delivery Delivery Sold an upmarket product at mass market price Retention Issues No Product Market Fit Poor Management
- 12. Raised $45 million Based in Vancouver, Canada 1996-2017Shoes.com Shoes and accessories Fashion They became infamous for poor service and botched orders Retention Issues No Product Market Fit Poor Management
- 13. Raised $52 million Based in New York 2010-2016Choxi.com Online discount store General Store Unhappy customers created an Facebook complaints page Retention Issues No Product Market Fit Poor Management
- 14. Raised $135 million Based in London, U.K. 1998-2000Boo.com Online fashion retailer Fashion Scaled to 400 employees before launching their store Retention Issues No Product Market Fit Poor Management
- 15. Raised $27 million Based in Wisconsin, USA 1998-2000Alice.com Amazon with a twist General Store They charged manufacturers for carrying their goods Retention Issues No Product Market Fit Poor Management
- 16. Raised $15 million Based in San Francisco 2013-2017Lily Robotics Autonomous drones Drones Was not able to ship a working product Retention Issues No Product Market Fit Poor Management
- 17. Raised $54 million Based in New York 2008-2017Jackthreads Smart everyday style for men Fashion Had very low retention rate Retention Issues No Product Market Fit Poor Management
- 18. Raised $54 million Based in New York 2009-2016One Kings Lane Luxury home decor Household furnishing Bad retention on their targeted market Retention Issues No Product Market Fit Poor Management
- 19. Raised $12 million Based in Spokane, Washington 2008-2013Ecomom Baby Apparel Mother and Child Goods Acquisition cost was higher than CLV Retention Issues No Product Market Fit Poor Management
- 20. Raised $286 million Based in New York 2007-2016Gilt Luxury shopping and lifestyle Fashion Failed to retain customers while scaling Retention Issues No Product Market Fit Poor Management