Kozmo.com was founded in March 1998 by two young Wall Street professionals, Joseph Park and Yong Kang in New York City. It was an online company which provides home delivery service for free within an hour. It is designed to be the convenience store of the Net. Kozmo.com running from magazine to CD’s to movies to food which customers had wide-variety choice to consume at Kozmo.com site. The main client of Kozmo.com is college students and young professionals because it is bringing convenience to the people.
Kozmo.com is shutting down in April 2001 after the collapse of the dot-com bubble by laying off its staff of 1,100 employees. Kozmo.com had filed an IPO before layoffs. Based on the Securities and Exchange Commission, the company had revenue of $ 3.5 million with a net loss of $26.3 million in 1999.
Causes for failure :
1. The cost of delivery is expensive when a small good which ordered by customer is delivered point-to-point within one hour.
2. Kozmo.com had expanding their business to 11 cities. Some business analysts said that Kozmo.com’s business model only can run efficiency in the packed and hustler city. They also commented that the services can work in only a few other cities around the world, such as London and Paris.
3. Kozmo.com is stopped catering to their main client when they are target to upscale clients who expected to order expensive products.
http://news.cnet.com/2100-1017-255710.html
http://en.wikipedia.org/wiki/Kozmo.com
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