Business-to-Consumer (B E-Commerce (2C) - Pure Players

PURE PLAYERS

Most pure-play e-tailers had little concern for profits when they first launched. They focused on acquiring market share, spending to gain new customers, and building their brands. They succeeded in driving traffic to their Web sites, but their margins were not enough to achieve profitability. As a result, many pure-play e-tailers went out of business in the wake of the dot-com shakeout of 2000. Others faced cash shortages and needed to raise funds to cover their cash-burn rate and lack of profitability.

In early 2001 some of the leading pure-play etailers, such as Amazon.com and Buy.com, took steps to become profitable by the end of the year. Amazon.com cut its work force by 15 percent, laying off 13,000 employees.Buy.com announced plans to focus on higher-margin products, such as technology and consumer electronics products, instead of its entertainment offerings.