World Class Operations: Pets.com Essay

817 Words4 Pages
World Class Operations
Bigger is not always better
During the dot-com boom time there were several ideas that has risen at main stage but failed to capitalize on what they had made possible. One of the major failures is pets.com who was the largest online retailers of pet food and accessories via the internet. The idea was that we could buy online and cut out the middleman, which in turn made the product cheaper for the buyer and the seller. Users of the site could browse through different categories, choose products they like and have them conveniently delivered to their home. Think Amazon’s original premise – books – but for pet products.
This was a brilliant idea but had a flawed business model. The only thing that went wrong on
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Not many people preferred ordering online instead of going out and buying the product from the local mart. Even if they ordered online the orders were so less that it wasn’t enough to get the business running in short-term let alone running it for long term(which was expected).
Had Pets.com actually done some research and analysis they could have known this in advance. Pets.com did not have the kind of market they thought they had, the products were not convincing enough to go along with the investment they had made– there was simply no market requirement for online ordered home delivered pet food.
At the same time this meant revenues were much lower than expected, it also meant that costs were higher than necessary. This means that the problem was a growing problem which was not going to go away instead creating more problems. Pets.com had invested in massive warehousing facilities to store the large amount of products which they thought they would sell. This was a fixed cost that could not be avoided and it made a serious dent in their sales profitability. To add to the misery they had to start selling products with massive discounts and free home delivery which is a massive loss considering the heavy weight and expensive shipping. They core problem to even go forward was that this business, considering the amount spent was not sustainable. Sales did grow due to aggressive pricing and the massive marketing spends, but this only meant

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