B2B failure and its causes

B2B e-commerce forces a company to become efficient and to provide value; if they don't, their failure will be swift. The new business paradigm that has resulted from B2B e-commerce technology has a tendency to weed out low-value players quickly, simply because the technology has created a more level, and infinitely larger playing field.

www.e-Toy.com is an example of e-commerce failure in year1997 – 2001. There are few causes toward their failure. First, failure to innovate. Innovation can be revolutionary or evolutionary. The need to innovate on the Internet is critical to success - especially the need to reduce human involvement in business processes. However, e-Toy.com did not make any develop on the innovation aspect, so that they failure in the B2B e-commerce in 1997-2001.

Besides that, they failure to adjust the compensation plan. The compensation plans as they are currently constituted in most businesses work against Internet success. As soon as any salesperson has even the threat of loss of income due to e-commerce, the politics will kick in and Internet advancement will stall.

Moreover e-Toy.com also failure to execute the Internet as a strategy. Today most marketers are looking at the Internet as a communications medium, which it is. They are not, however, seeing that it can facilitate an entirely new business model, a new strategy. Instead of using the Web to deliver leads to sales people, let the lead advance the relationship without a salesperson - a new strategy facilitated by the medium.

The most important cause is the e-Toy.com failure to budget. Companies are still carving Internet budget from other areas without providing adequate resources (the corporate word for cash and what it will buy) for supporting and advancing the Internet. It cannot be a static budget. As savings are realized and revenues generated, the Internet must have additional funding from these successes or it will fall behind waiting for the next budget cycle. Due to e-Toy.com did not have any flexible budget for the following budget, so they are failure in e-commerce industry.