The company’s assets were sold for $2m in May 2000. Countless similar tales contributed to the implosion of the dotcom sector in 2000 and 2001, and today’s e-commerce landscape is a far leaner and, to many eyes, much more attractive one.
Your sales margins were actually negative – as buy.com, an American retailer, was able to in 1999 – but the success of such businesses depends on generating huge and repeatable sales volumes which might at least form the basis for profit at some time in the future, even if you currently sell dollar bills for 90cents each.
Most of the dotcom businesses failed to pass this test, instead burning cash at a rate far exceeding revenues. Despite gigantic investment in marketing and advertising, few companies have managed to build the steady stream of customers needed to make their business models work. Boo.com.
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