Company:Ecomom
File:Ecomom home page.png | |
Industry | retail |
---|---|
Founded | 2007 |
Defunct | first time 2013 |
Headquarters | Las Vegas and San Francisco |
Key people | Jody Sherman |
Products | Mother & Children |
Ecomom, founded by Jody Sherman in 2007, is a failed (and reborn) E-commerce startup company offering environmental caring, safe and healthy products for mothers, babies and children. Its head offices are located in Las Vegas and San Francisco . Its sales exceeded $1 million by 2011 and it raised $12 million before January 2013.
Ecomom shut down in early 2013, and the founder and CEO, Jody Sherman, became a suicide shortly afterward.[1][2]
GreenCupboards, an E-commerce company selling earth caring products in terms of homes and businesses, then acquired Ecomom and redirected its company name at etailz, Inc..[3] The website of Ecomom reopened in the early summer of 2013.[1]
Reasons for failure
Venture companies like Ecomom collect micro-finance from angel investors. One defect of this financing mode is that the individual investment of personal investors has little effect on the company. Therefore, individuals don't have much motivation to participate in the company affairs and lead it to success.[4]
Ecomom adopted a deep discounting policy which offered customers fifty-percent discount. As a result, Ecomom lost money every time it sold products because half the price was lower than the cost price. In addition, Ecomom did not make any limitation to the discount and therefore repeat customers were offered the 50% discount when shopping.[2] Ecomom spent excessively on marketing its products, for example the expenditure for search engine marketing was not proportional to the return of investment.[2] Ecomom did not understand that the abuse of the offered discount would have a negative impact on the company when developing new audiences and markets.[2]
Reference
- ↑ 1.0 1.1 Chaffey, Dave; Ellis-Chadwick, Fiona. "An E-commerce business failure example". Smart Insights (Marketing Intelligence) Ltd. https://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/an-ecommerce-business-failure-example/. Retrieved 5 March 2018.
- ↑ 2.0 2.1 2.2 2.3 Roggio, Armando. "2 E-commerce Blunders to Avoid in 2015". Practical Ecommerce Ltd. https://www.practicalecommerce.com/2-Ecommerce-Blunders-to-Avoid-in-2015. Retrieved 5 March 2018.
- ↑ "GreenCupboards Acquires ecomom". Business Wire, Inc.. https://www.businesswire.com/news/home/20130424005481/en/GreenCupboards-Acquires-ecomom. Retrieved 5 March 2018.
- ↑ "The Story Of A Failed Startup And A Founder Driven To Suicide". http://www.businessinsider.com/jody-sherman-ecomom-2013-4?IR=T.