The example of an E-commerce failure is Kozmo.com.Kozmo.com was founded in 1997 by two young Wall Street professionals,Joseph Park and Yong Kang. Park had been an analyst in the corporate finance division of blue-chip investment bank Goldman Sachs & Co. while Kang was an assistant vice president at Societe Generale in the media and communications group.
The company began as a service that delivered videos by bicycle messenger to Manhattan customers who ordered them online. The company boasted “from the Internet to your door in under an hour” and its attractive rates helped rapidly draw thousands of customers .The company is often referred to as an example of the dot-com excess.The documentary film e-Dreams (2001) portray the fate of the company.
Kozmo.com's aura helped it raise more than $250 million, but the company was unable to generate enough revenue to cover costs. In 1999, it had $3.5 million in revenue, compared to $26.4 million in net losses. Basic problems with its business model included offering a costly home-delivery service for free, even on very small orders on which it was impossible to turn a profit. Last-ditch efforts to boost orders and stop the delivery losses by charging $1.99 for orders under $30 helped, but couldn't deliver the company.
The company began as a service that delivered videos by bicycle messenger to Manhattan customers who ordered them online. The company boasted “from the Internet to your door in under an hour” and its attractive rates helped rapidly draw thousands of customers .The company is often referred to as an example of the dot-com excess.The documentary film e-Dreams (2001) portray the fate of the company.
Kozmo.com's aura helped it raise more than $250 million, but the company was unable to generate enough revenue to cover costs. In 1999, it had $3.5 million in revenue, compared to $26.4 million in net losses. Basic problems with its business model included offering a costly home-delivery service for free, even on very small orders on which it was impossible to turn a profit. Last-ditch efforts to boost orders and stop the delivery losses by charging $1.99 for orders under $30 helped, but couldn't deliver the company.
Mounting losses led to Park’s ouster in 2000. The new leadership couldn’t turns things around or pull off the long-delayed IPO. In April 2001 the company ran out of money, shut down operations and laid off its employees.
5 comments:
This company had only generate from 1997 to 2001 just only 5 years. It is means that is hard to substained in the e-commerce environment?
it is depend, the kozmo cannot be substained is because of the delivery is expensive and it take long delivery time, and some will look at the expensive of delivery cost, they will go away, but fot example like ebay. it have it potential like low delivery cost and can find variety of item which u want to search.next, we can look at its potential like high delivery turnover. mean the custimer turnover is very high, it mean that, ebay have its potential to keep the customer and substined in the e-commerce envirnment.
Is there any ways or solutions to overcome this example of e-commerce failure? Are the causes that you mentioned can be solved?
the solution to prevent the e0coomerce failure is that the company can send the goods or product with a certain units, because it can send a bulk product or goods in a time and it reduce the delivery cost, beside that, company those who trading is through e-commerce, they can implement more service to generated profit like advertisment, they can post any of advertisment by any company which have to pay advertisment fees to the company.
for me, i think it can be narrow down the risk of failure of e-commerce.
Post a Comment