posted on July 28, 2001 02:36:44 PM
Consider the following quote from the 7/23/01 Industry Standard's analysis of the demise of online grocer Webvan.com:
"Webvan was so intent on meeting its long-term goal of building a behemoth that could deliver anything to anyone anywhere that it lost sight of a more mundane task: pleasing grocery customers day after day. In the process, it jeopardized the shorter-term goal of being a modest but profitable online supermarket."
Now substitute "sell anything" for "deliver anything", "auction sellers & buyers" for "grocery customers", and "online auction site" for "online supermarket," and tell me if this paragraph doesn't describe eBay's current rush to fixed price sales and mega-corporate sellers?
Webvan, by the way, was profitable in some cities (though not overall) before it gobbled up HomeGrocer.com and adopted the "build a behemoth/ignore current customers" strategy. It quickly lost profitability even in the cities where it had been successful, and went under a few months later.
Unlike Webvan, E-Pain is the darling of Wall Street and has been for a while. Also, Webvan required massive warehouses for inventory, capital to buy that inventory, and had to deliver the goods themselves incurring high costs for gas, insurance, and trucks. E-Pain, above all else, is "just a venue."
Is there a chance E-Pain could go the way of the Pet Rock and WebVan? Sure - tick off enough sellers, make sure more buyers get conned (with the press to follow it), and treat the big boys differently than those of us small timers and it's possible.
