
Shoes.com shuts down - uladzislau
https://www.biv.com/article/2017/1/shoescom-shutting-down-today/
======
busted
It's kind of amazing that very few of what you would naively expect to be the
"best" domain names, especially for selling things, are actually home to
successful business. Things like shoes.com, pizza.com, clothes.com, beer.com,
programming.com, they're all failed or nothing. Others (books.com,
computers.com) just redirect to websites that are closely or tangentially
related.

~~~
godzillabrennus
One theory I'll toss out about these failures is that it's a people problem.
They probably have marketing people leading them, hence why they bought such a
"great brand". Turning revenue doesn't mean making a profit and without enough
focus on tech automating as much as possible the businesses don't survive.

~~~
devoply
Generic words are not brands. I have no feelings about shoes.com nor can I
ever other than I like shoes. I care about certain brand of shoes because they
look nice and last a while, i.e. quality. That's why companies fight to keep
their brands from becoming generic names.

~~~
emodendroket
Surely this is less common now, but I can remember at one point it was a
pretty common behavior to say, "hm, I want some information at shoes" and just
try navigating to shoes.com. Probably this became less common because porn
advertisers caught on and started redirecting to porn.

~~~
adventured
Certainly it was expected that that style of navigation would be extremely
lucrative. It never turned out that way of course. In large aggregate domain
squatters have made some real money over the last 20 years by owning various
direct type domains (like weddingshoes.com).

I remember in the mid & late 1990s, during the insane dotcom landgrab, people
really believed having that special domain name was everything. At the time,
it coincided with people thinking they could build a business overnight and
IPO the next week, so having something like Shoes.com to sell to naive
investors was crucial. I remember one guy pitching the premise, on CNBC and
elsewhere, that he had acquired all the buything.com domains, like
buysocks.com, and he was going to build a retailing juggernaut on the back of
that.

~~~
emodendroket
Easy-to-remember domain names are still good. People make a lot of money
parking domains and you would expect that to be impossible if they were
worthless.

------
kevinoconnor7
> Its approximately 200 employees were made aware of the decision early on
> January 27, and the company said that it will compensate the employees
> through to the end of the month.

So they notified their employees that same day as they shutdown. To make it
right they offered them a severance of two whole days.

~~~
openmosix
Given this could lead to all sort of lawsuits, it's most likely they were
looking for a "plan A" that didn't work and had to quickly unravel into a
"plan B". Because they are shutting down, it's entirely possible the plan A
left them without money in the bank and they had to announce it within the
week (being Friday the _best_ day for layoffs).

------
johnnyg
Does anyone have insight into why this happened?

The guy who took Costal Contacts public buys Shoes.com and two existing shoe
businesses. The business experiences revenue growth and raises $45M.

[https://www.internetretailer.com/2015/05/21/shoescom-
raises-...](https://www.internetretailer.com/2015/05/21/shoescom-
raises-45-million)

Suppliers start having trouble getting paid. The business announces a hiring
spree. Four months later, they shut down.

This is manic. If you can build a company and take it public, make what looks
like a solid set of moves to get into a nice position and grow that position
in revenue terms - what went wrong? What is the lesson? I'm assuming the CEO
knew the ropes, perhaps not? Seems unlikely.

I suspect their top line was good but their margins were negative. That,
something out of left field or foul play of some kind. Its noted they had
lawsuits pending, which I suspect relate to collections.

I know that walmart recently purchased shoebuy. So shoes.com's competition,
already stiff, may have been overwhelming.

Even so, wouldn't you wind it down then?

~~~
lawkwok
I help operate an online shoe retailer so I have watched ShoeME.ca (the
Canadian e-retailer established in 2012 that merged with Shoes.com and
OnlineShoes.com) over the last few years. Here is what I've noticed:

\- Their prices were not competitive. Some brands sold for at least $60 more
than the MSRP found on other sites. I don't think even Zappos could've gotten
away with similar premiums – despite their renowned customer service – which
according to reviews and articles, ShoeME did not have.

\- They were a drop-shipper so every item had to first travel from the
supplier, to ShoeME's warehouse, THEN express shipped to the customer.
Shipping from their Vancouver warehouse to Eastern provinces may have cost up
to $40. Drop-shipping can add over a week to delivery time depending on how
responsive your supplier is. Frustratingly, ShoeME did not make this their
drop-shipping transparent and would instead send you an email about the delay
AFTER you had ordered.

\- Fakes sales. There was never a day without a sale banner, popup, or email
blast claiming 30-40% off. The moment a "last chance" sale ended, another one
was put on the next day. In reality many brands were permanently excluded from
the promotions. Consumers catch on quickly, especially in the online world.

\- In the past year and a half, ShoeME started buying their own inventory for
some brands so they clearly thought they were getting somewhere. However,
anyone who has run a shoe store knows how hard it is to keep size runs full.
Some styles may sell well one day, and you may not sell another pair for a few
weeks. I wonder if they had enough data to anticipate customer demand without
stocking too much.

\- They also started work on a supplier portal which never got off the ground.
While working to integrate with them starting in mid-2015 them, we constantly
received incorrectly setup credentials, changing representatives, and no
updates whatsoever.

\- Returns. It's no secret the return rate in the shoe industry can exceed
25%. I can imagine how sprawling ShoeME's warehouse must've been considering
the hundreds of brands they sold. How do you even organize all the one-off
returns from different styles and manufacturers?

This announcement pretty much caught us off-guard this afternoon, although
retrospectively you can see some customer service issues regarding lack of
transparent drop-shipping and dishonest pricing and sales. Personally, I
thought they were too big to fail and always questioned the sustainability of
their constant sales and pricing.

I feel sorry for the customers who still have outstanding orders with them.
Websites are all down. They're social media pages have posts from just a few
hours ago so I guess many were blindsided. This is like FutureShop's sudden
closure all over again.

~~~
johnnyg
I keep coming back to HN for insights like this. Thanks for taking the time
lawkwok.

~~~
lawkwok
Thanks! It's not every day I see an article on Hacker News that's not over my
head :P

------
ndespres
I remember showing my father the www, probably 20 years ago, and he was
incredulous that certain .coms would exist for any reason. "You're telling me
I could type 'shoes.com' and there would be a page about shoes? No way." I
don't remember shoes actually being on the page anywhere, prompting the
response "see? I told you it wouldn't work."

From the article: "Its approximately 200 employees were made aware of the
decision early on January 27, and the company said that it will compensate the
employees through to the end of the month." Gosh, how generous of them. A
whole 5/7th week severance. I wonder if they were in talks with Walmart for a
buyout but they acquired shoebuy instead in early January. Either way
shoes.com should have shut the doors earlier and given employees more notice.

------
cdelb
For what it's worth I'm not surprised. I had a very poor experience with them.
The actual shipping time was significantly longer than promised (pretty sure
their model was to act as a dropshipper), and then I was unable to get a
response to return the shoes I no longer needed.

------
Zhenya
My guess is the Omnibox is decreasing the value of websites like this.

Before the browser (or ISP) would suggest things like shoes etc if you typed
it into the address bar.

Now you simply get Google (or bing) results.

RIP expensive domain names with no specialized business model behind them.

------
princetontiger
This is sad to here. Roger is the man. I remember visiting him when he ran
Coastal.

~~~
teej
Given that he gave his 200 employees a 4 days of severance, he is clearly not
"the man".

~~~
gotrecruit
well if there's no money in the bank, how do you propose he give more?

~~~
jen729w
I've been involved in a failing business and we knew more than 4 days out that
there was no money in the bank.

Hoping the problem will go away rarely makes the problem go away.

~~~
princetontiger
I just got laid off from a large public tech company, and there was zero
severance in the email.

~~~
whyenot
Well in that case I guess it's ok?

------
api_or_ipa
When I'm buying things, I usually associate what I'm buying with the brand I'm
buying from, not the generic article I'm buying. For that reason, I would
respond to `allenedmunds.com`, but not to `shoes.com`.

Having a generic domain name in this case makes me think the shoes are
counterfeit or otherwise not quality. Since the site is currently down, I
unfortunately can't verify my own perceptions.

~~~
jobigoud
I associate generic domain names with "comparator" sites. If I go to
shoes.com, I want to access all and every shoe on Earth. A search engine for
shoes. It works well for hotels.

