Learn how to validate your startup idea by pre-selling it, for only $80 (includes a free 1-hour consultancy call).
E-Commerce Failures

31 Failed E-Commerce Startups & their Case Studies

Here's a list of 31 failed startups in the e-commerce industry, analyses on why they shut down, and interviews with their founders.

Ad

Startup Foundations

Gain traction with your startup right now. In this free video series, learn tactical strategies proven to deliver results. Get free access to Startup Foundations →

The e-commerce industry is a competitive one.

But at the same time, it can be really lucrative.

Thousands of e-commerce startups have emerged in the last years and a lot of money has flown into the sector.

However, the majority of these startups have since shut down.

In this article, you can find some of them as well as analysis on why they failed.


31 Failed E-Commerce Startups

Ad

Startup Foundations

Gain traction with your startup right now. In this free video series, learn tactical strategies proven to deliver results. Get free access to Startup Foundations →

Alikolo

Alikolo

Alikolo was an eMarketplace company. The founder didn't have a clear vision and didn't know the reasons why customers purchased at his rivals.

Details of the startup:

  • Founders:

    Danny Taniwan

  • Country:

    Indonesia

  • Industry:

    e-Commerce

  • Started in:

    2014

  • Closed in:

    2015

  • Nº of employees:

    1-10

  • Funding Amount:

    < $1M

  • Specific cause of failure:

    Lack of Experience

You can read more about their failure here.

Appiterate

Appiterate

Appiterate was a mobile marketing company that was acquired by Flipkart, India’s largest e-commerce company. It was closed 2 years after launching.

Details of the startup:

  • Founders:

    Anuj Bhargava, Mayank Kumar, Tanuj Mendiratta, Varun Sharma

  • Country:

    United States

  • Industry:

    Marketing

  • Started in:

    2013

  • Closed in:

    2015

  • Nº of employees:

    1-10

  • Funding Amount:

    < $1M

  • Specific cause of failure:

    Acquisition Flu

You can read more about their failure here.

ArsDigita

ArsDigita

ArsDigita was a Web Development Company established in 1997. Their decline was ascribed to an inexperienced external CEO and had to shut down in 2001.

Details of the startup:

  • Founders:

    Philip Greenspun, Tracy Adams, Ben Adida, Eve Andersson, Olin Shivers, Aurelius Prochazka, Jin Choi

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    1997

  • Closed in:

    2002

  • Nº of employees:

    50-100

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Lack of Experience

You can read more about their failure here.

Auctionata

Auctionata

Auctionata was an online auction platform for art and luxury. Their issues originated from unethical behavior, lack of transparency, and lies by the CEO.

Details of the startup:

  • Founders:

    Alexander Gilkes, Alexander Zacke, Georg Untersalmberger, Susanne Zacke

  • Country:

    Germany

  • Industry:

    e-Commerce

  • Started in:

    2012

  • Closed in:

    2017

  • Nº of employees:

    250-500

  • Funding Amount:

    > $50M

  • Specific cause of failure:

    Legal Challenges

You can read more about their failure here.

Fab

Fab

Fab was an e-commerce company focused on daily design inspiration. Its success resulted in companies launching their same exact replicas of Fab’s platform.

Details of the startup:

  • Founders:

    Bradford Shane Shellhammer, Deepa Shah, Jason Goldberg, Nishith Shah, Sunil Khedar

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2009

  • Closed in:

    2013

  • Nº of employees:

    500-1,000

  • Funding Amount:

    > $50M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

HitMeUp

HitMeUp

HitMeUp was a web-based business commercial center. The founder had no tech background, and after launching 3 versions, they decided to shut down.

Details of the startup:

  • Founders:

    Charlie Pool

  • Country:

    United Kingdom

  • Industry:

    e-Commerce

  • Started in:

    2011

  • Closed in:

    2015

  • Nº of employees:

    1-10

  • Funding Amount:

    < $1M

  • Specific cause of failure:

    Lack of Experience

You can read more about their failure here.

Juicero

Juicero

Juicero was a juice company that packed fresh organic fruits. They claimed their juicer was innovative, until customers found out the machine was useless.

Details of the startup:

  • Founders:

    Doug Evans

  • Country:

    United States

  • Industry:

    Food & Beverage

  • Started in:

    2013

  • Closed in:

    2017

  • Nº of employees:

    100-250

  • Funding Amount:

    > $50M

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Laurel & Wolf

Laurel & Wolf

Laurel & Wolf was a marketplace for interior design solutions. They shut down due to large spendings on marketing and a bad reputation among customers.

Details of the startup:

  • Founders:

    Brandon Kleinman, Leura Fine

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2014

  • Closed in:

    Active

  • Nº of employees:

    50-100

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

Move Loot

Move Loot

Move Loot was an online resale marketplace for furniture. They decided to have a furniture stockroom without thinking about the expenses of running it.

Details of the startup:

  • Founders:

    Bill Bobbitt, Jenny Karin Morrill, Ryan Smith, Shruti Shah

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2013

  • Closed in:

    2016

  • Nº of employees:

    50-100

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Reach.ly

Reach.ly

Reach.ly was an analytics tool for e-commerce sites providing customer behavior patterns. Lack of proper market feedback made the company shut down.

Details of the startup:

  • Founders:

    Ernests Štāls

  • Country:

    Latvia

  • Industry:

    Analytics

  • Started in:

    2011

  • Closed in:

    2015

  • Nº of employees:

    1-10

  • Funding Amount:

    < $1M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

Selltag

Selltag

Selltag was a web-based buy & sell platform. The CEO realized their business model would not be sustainable in the long term and shut it down.

Details of the startup:

  • Founders:

    Javier Escribano, Ruben Colomer, Juan Luis Hortelano, Walter Kobylanski

  • Country:

    Spain

  • Industry:

    e-Commerce

  • Started in:

    2014

  • Closed in:

    2015

  • Nº of employees:

    10-50

  • Funding Amount:

    < $1M

  • Specific cause of failure:

    Failure to Pivot

You can read more about their failure here.

Shipbeat

Shipbeat

Shipbeat was an API to help e-commerces. When Shipbeat expanded its logistic services in other market areas, they had some big difficulties and shut down.

Details of the startup:

  • Founders:

    Joachim Rørbøl, Kenneth Svenningse

  • Country:

    Denmark

  • Industry:

    e-Commerce

  • Started in:

    2014

  • Closed in:

    2016

  • Nº of employees:

    10-50

  • Funding Amount:

    $1M-$10M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

SpoonRocket

SpoonRocket

SpoonRocket was a food delivery service making healthy meals each day. When their financial situation declined, they failed to fundraise to stay afloat.

Details of the startup:

  • Founders:

    Anson Tsui, Steven Hsiao

  • Country:

    United States

  • Industry:

    Food & Beverage

  • Started in:

    2013

  • Closed in:

    2016

  • Nº of employees:

    10-50

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Competition

You can read more about their failure here.

Totsy

Totsy

Totsy was a flash sale company that offered high-end fashion brands online for a low-price. Flash sales lost their attractiveness and became obsolete.

Details of the startup:

  • Founders:

    Christophe Garnier, Guillaume Gauthereau

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2009

  • Closed in:

    2013

  • Nº of employees:

    50-100

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Poor Product

You can read more about their failure here.

Wantful

Wantful

Wantful was an e-Commerce founded in 2011. After experiencing exponential growth, it shut down in 2013 due to stiff competition from other companies.

Details of the startup:

  • Founders:

    John Poisson

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2011

  • Closed in:

    2013

  • Nº of employees:

    +10,000

  • Funding Amount:

    $1M-$10M

  • Specific cause of failure:

    Competition

You can read more about their failure here.

Zulily

Zulily

Zulily was an online store selling clothing and other products. They declined in popularity because of their poor marketing and user-attention strategies.

Details of the startup:

  • Founders:

    Darrell Cavens, Mark Vadon

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2009

  • Closed in:

    Active

  • Nº of employees:

    1,000-5,000

  • Funding Amount:

    > $50M

  • Specific cause of failure:

    Bad Marketing

You can read more about their failure here.

140 Canvas

140 Canvas

After dropping out of university, Harry went back home and found a gift: a fake big tweet from Federer. That’s when he came with a business idea: fake tweets printed and sold for £30. He partnered with a friend and launched the project within 2 months. However, after a Youtube’s influencer campaign, the site got 17,000 visitors and only 20 sales. That’s when they realized not so many people were interested in their product...

Details of the startup:

  • Founder:

    Harry Dry

  • Country:

    United Kingdom

  • Industry:

    e-Commerce

  • Started in:

    2017

  • Closed in:

    2018

  • Funding Amount:

    $0

  • Specific cause of failure:

    No Market Need

You can read more about their failure here.

Chowdy

Chowdy

Steve and his housemate were always complaining food was expensive in Toronto. So, they came with a solution: hire a chef for themselves and 20 friends. This simple idea quickly escalated into a business, that, within a few months, was making +$110,000 per month. But, as it went up fast, it also came down rapidly. The business was involved in some legal problems, which forced the founders to shut it down. Read Steve’s failure story and learn from his mistakes!

Details of the startup:

  • Founder:

    Steven Long

  • Country:

    Canada

  • Industry:

    Food & Beverage

  • Started in:

    2014

  • Closed in:

    2016

  • Funding Amount:

    $0

  • Specific cause of failure:

    Legal Challenges

You can read more about their failure here.

FreshConnect

FreshConnect

Tarun co-founded Freshconnect, an online B2B marketplace for fresh agricultural produce like fruits & vegetables. After making mistakes like lack of focus and bad hiring, they couldn't secure a funding round and eventually got acqui-hired by another company.

Details of the startup:

  • Founder:

    Tarun Gupta

  • Country:

    India

  • Industry:

    e-Commerce

  • Started in:

    2018

  • Closed in:

    2020

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Management

You can read more about their failure here.

Howell Market

Howell Market

Howell Market was an online store where individual sellers could go to sell their products. Cody, the founder, partnered with his family and friends, but things didn’t work out as his partners weren’t passionate about the vision of the company.

Details of the startup:

  • Founder:

    Cody Howell

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2017

  • Closed in:

    2017

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Management

You can read more about their failure here.

Mongoose Cricket

Mongoose Cricket

In 2009, Thomas Evans began working alongside Marcus, the creator of a radical new cricket bat named the Mongoose. After spending over $130,000 on glitzy marketing, and failing to break through the heavily traditional cricket market, they were forced to shut down.

Details of the startup:

  • Founder:

    Thomas Evans

  • Country:

    United Kingdom

  • Industry:

    e-Commerce

  • Started in:

    2009

  • Closed in:

    2011

  • Funding Amount:

    $100K-$500K

  • Specific cause of failure:

    Bad Marketing

You can read more about their failure here.

NE Lounge

NE Lounge

Following his objective of reaching $10k/month from his online businesses, Jake launched NE Lounge, an Amazon FBA store selling inflatable products. 1 year and $16,000 later, the startup shut down. Choosing the wrong product in an unfamiliar niche is the cause to blame.

Details of the startup:

  • Founder:

    Jake Lang

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2017

  • Closed in:

    2018

  • Funding Amount:

    $0

  • Specific cause of failure:

    No Market Need

You can read more about their failure here.

NOX

NOX

Jeremiah is an ex-entrepreneur who co-founded NOX, a nightlife app that allowed users to book events, services, and VIPs. The 5-person-team raised $90,000 from several angel investors but had to pivot into an e-commerce platform for alcoholic beverages, which was eventually making $20,000/month. However, the lack of both financial discipline and ideas to scale led to its failure.

Details of the startup:

  • Founder:

    Jeremiah Lam

  • Country:

    Singapore

  • Industry:

    e-Commerce

  • Started in:

    2015

  • Closed in:

    2018

  • Funding Amount:

    < $100K

  • Specific cause of failure:

    Mismanagement of Funds

You can read more about their failure here.

Okami Pack

Okami Pack

Tim is a 32-years-old entrepreneur who in 2014 spent 10 months working on a Kickstarter project that would never launch: the Okami Pack. He quit his job to follow his dream of creating this survival pack, but as the months went over, he started running out of cash and saw himself forced to shut the startup down.

Details of the startup:

  • Founder:

    Tim Chard

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2014

  • Closed in:

    2015

  • Funding Amount:

    $0

  • Specific cause of failure:

    Lack of Funds

You can read more about their failure here.

Reality Hunt

Reality Hunt

Toby founded two projects that gave him lots of valuable lessons for his current Startup Mill projects. They were RealityHunt and "I Voted Remain". He learned to build a simple landing page before committing to building it and to build processes that simplify your way of working.

Details of the startup:

  • Founder:

    Toby Allen

  • Country:

    Belgium

  • Industry:

    Software & Hardware

  • Started in:

    2016

  • Closed in:

    2017

  • Funding Amount:

    $0

  • Specific cause of failure:

    No Market Need

You can read more about their failure here.

Ropero

Ropero

Ropero was an e-commerce aiming to sell t-shirts in an unprepared market. Many expenses and little earnings.

Details of the startup:

  • Founder:

    Rafael Soto

  • Country:

    Mexico

  • Industry:

    e-Commerce

  • Started in:

    2005

  • Closed in:

    2006

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Market Fit

You can read more about their failure here.

The Punjab Kitchen

The Punjab Kitchen

Amit is a hard-core sales professional, who decided to set up a home-made food business with his wife. They started investing $1,200/month to set up the startup and get the first customers. However, once running they had to confront a big problem: the prices of their competitors were much lower. After some pivots, they decided to shut it down.

Details of the startup:

  • Founder:

    Amit Gogia

  • Country:

    India

  • Industry:

    Food & Beverage

  • Started in:

    2014

  • Closed in:

    2015

  • Funding Amount:

    $0

  • Specific cause of failure:

    Competition

You can read more about their failure here.

ToyGaroo

ToyGaroo

Toygaroo was the Netflix of toys. Funded by a great group of people based in Los Angeles, the company appeared on Shark Tank asking $100k for a 10% stake. They ended up raising $250K in 2 funding rounds, but after some months, they had to shut down the company. Inventory and logistical costs were too high, so capital rapidly disappeared.

Details of the startup:

  • Founder:

    Phil Smy

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2010

  • Closed in:

    2012

  • Funding Amount:

    $100K-$500K

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Vivalatina

Vivalatina

Nicolas started an e-Commerce that imported sterling silver jewelry from Mexico and resold it in France. His lack of knowledge on marketing made it impossible to him to achieve customers. After some big mistakes, he decided to shut it down and start re-thinking the business model. He is now making $7,200/Month.

Details of the startup:

  • Founder:

    Nicolas Tranchant

  • Country:

    Mexico

  • Industry:

    e-Commerce

  • Started in:

    2012

  • Closed in:

    2014

  • Funding Amount:

    $0

  • Specific cause of failure:

    Bad Marketing

You can read more about their failure here.

VO2 Sportswear

VO2 Sportswear

After realizing no triathlon clothing brand was properly catering to the market from a design point of view, Matthew decided to do it himself and started VO2 Sportwear. Through social media, sponsorships, and SEO, the business made £250k its third year, but then failed to manage their cash flow and had to shut down.

Details of the startup:

  • Founder:

    Matthew Tomkin

  • Country:

    United Kingdom

  • Industry:

    e-Commerce

  • Started in:

    2012

  • Closed in:

    2016

  • Funding Amount:

    < $100K

  • Specific cause of failure:

    Lack of Funds

You can read more about their failure here.

Zor Technology

Zor Technology

When he was 16 years old, Mat wanted to help his family improve the standards of living. So, he started a business which imported consumer electronics and re-sold them at almost x10 the original price. Through affiliates, he was able to put his business on the track to 6 figures in the first year. However, one day he received a call from a law firm which forced him to shut down the startup.

Details of the startup:

  • Founder:

    Mathew Carpenter

  • Country:

    Australia

  • Industry:

    Software & Hardware

  • Started in:

    2008

  • Closed in:

    2009

  • Funding Amount:

    $0

  • Specific cause of failure:

    Legal Challenges

You can read more about their failure here.

The All-In-One Newsletter for Startup Founders

Every week, I’ll send you Failory’s latest interviews and articles, curated resources for founders, and updates on how I’m growing the site to $10k/mo. Join +7,000 other startup founders!