Sunday, June 15, 2008 . 5:32:00 PM
An Example of An E-Commerce Failure and Its CausesThis few years e-commerce becomes very popular and broad in the world. Most of the transaction between suppliers and buyers is deal through e-commerce. Electronic commerce, commonly known as e-commerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. I even will use e-commerce to make some transactions rather than approach to the outlet because it is more convenient and save time. I just need to click on the keyboard then can get what I want. I think this is the reason why e-commerce is useful.
However, there is failure on e-commerce also. When you set up an e-marketplace in the Internet to sell your products, you have to promote or advertise the website to make it well-known among the Internet users. Sometimes it may not easy to do or achieve. When you are successful, it can boost up your sales. Besides that, the income that had yield must be enough to cover all the cost like advertising and marketing. An example of this situation is eToys.com which established only four years then closed down in year 2001. eToys.com spent millions on advertising, marketing, and technology and battled a host of competitors. And like many of its failed brethren, all that spending outweighed the company's income, and investors quickly jumped ship. This caused the share price decreased from a high of $84 per share in year 1999 to a low of just 9 cents per share in year 2001.
I can see that, to make a website or e-marketplace to be well-known is not easy. The master of the website must be able to make profit which cost of maintaining the site no more than the income received. If not, what is the purpose of running an e-market?