Case Study of failed E-commerce online stores

Everyone needs success in their life, no matter what they are pursuing.

But think about what teaches you the most – Success or Failure? Yes, failures teach you the things that needs to be changed and make you realize the real potential of yourself.

” We all have limited time on this planet, so learn from the mistakes of others.”


Similarly in business too, it is necessary to know about the mistakes that any business has done before so that it would not be repeated again.

It will going to save your time and tell you the necessary things that need to prioritize while starting or running a business.

We have researched, analyze and prepare the case study of failed E-commerce online stores that is very useful for the start-ups or for the businesses who are running E-commerce online stores.


1- The technological part is not performed well as expected by the users. Neither the website has the speed and didn’t open in Macintosh but later on, it got fixed but it was too late by then.

2- tried to expand too fast which is not a good decision for any new startup because obviously you have to analyze and research the market first and step by step increase your visibility.

3- High expenses are the major reason for the failure of, so always try not to increase expenses if a large amount of money is not coming in.

4- Problems did not solve out after knowing it which leads to low sales.

5- Ease of payment processing is not focused on by the company which leads to the failure in sales like in every 4 transactions only 1 is able to get processed.

6- invested funds in the wrong direction(marketing) which leads to the loss of a huge amount of money.


  • Focus on one thing first
  • Client needs
  • Marketing in a cost-effective way
  • Perfect Technology
  • Maintain the great performance first and then make it visible
  • Take calculated risks

Similarly like Boo- Etoys also repeat a few of the same mistakes and went bankrupt in just a span of 2 years after the loss of a huge amount of money at that time. Let’s have a look at it.


1- The major mistake done by the Etoys is not fulfilling its promises made to the customers by not shipping the products on time.

2- This company does not work according to its financial capacity.

3- Etoys has more expectations from the clients than the reality is saying – at that time Walmart and Toys “R” Us are already dominating the toy market.

4- They spend money in the wrong direction which results in the loss of funds.

5- They didn’t use their resources at the right time and at the right moment.


  • Be on your words
  • Use your funds wisely
  • Always know the reality
  • Invest time and money where it brings value
  • Use your resources when needed


1- According to its Phil Smy who wrote the software for Toygaroo – Inventory & Logistics are too expensive which leads to the failure of Toygaroo.

2- The company said to be under pressure because of there investors who always forced for growth and profit.

3- The company was not able to carry out the major components in their hand which leads to the failure in the right decision.

4- Communication between the company and investors is also the major reason that appeared for the failure of Toygaroo.


  • Keep your cost low at the initial stage
  • Get invested when the investment really needed
  • Keep the major decisions in your hand
  • Having a conversation is very important
  • Don’t rely on investors

Anyone can learn from the above case study of failed E-commerce online stores and determine not to repeat these mistakes in their business at any cost.

How we can help?

USA Business helps everyone whether you are an individual or a business to set up an E-commerce online store along with Shipping | Warehouse | Inventory management |payment gateway and company incorporation + banking to run a successful E-commerce business.

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