Decline and Bankruptcy
VA was plagued by communications problems with the manufacturers they worked with. At the time, the idea of selling directly to customers without a distributor involved was still new and not well tested among the large consumer products companies VA represented, and since VA had no warehouses, traditional supply lines couldn't be used. Shipments would be delayed, go missing, and arrive badly packed or with the wrong product inside. Billing was also a problem, and charge backs were difficult to perform due to the mishandling of shipped goods. VA was also harmed by problems with rebates on computers requiring the acceptance of long-term Internet access contracts, a problem that also affected several mainstream retailers and which attracted the attention of the Federal Trade Commission. Also, many of the products Value America was trying to sell were easily available in many other places, making it difficult for them to compete by methods other than low prices. Towards the end of 1999, VA decided to lower its aims, drastically reducing its product catalog and focusing on information technology products and office supplies, items that were sourced from traditional distributors. As the company floundered, Winn and executives enjoyed the 'dot-com lifestyle', spending large amounts of money on expensive perquisites such as private jets, as well as plans for a large campus that were never executed.
By 2000, Value America was failing due to the negative effect that the communication problems had on their customer service. The stock had fallen to 72 cents and Value America filed to reorganize under Chapter 11 of the Bankruptcy Code on August 11, 2000. The remains of the company (in particular the custom supply chain management system they had commissioned) were sold to IT product distributor Merisel in October 2000.
Founder Craig Winn has self-published the book In the Company of Good and Evil., arguing that others are to blame for the firm's failure.
Read more about this topic: Value America
Famous quotes containing the words decline and, decline and/or bankruptcy:
“Or else I thought her supernatural;
As though a sterner eye looked through her eye
On this foul world in its decline and fall,
On gangling stocks grown great, great stocks run dry,
Ancestral pearls all pitched into a sty,
Heroic reverie mocked by clown and knave....”
—William Butler Yeats (1865–1939)
“Reckoned physiologically, everything ugly weakens and afflicts man. It recalls decay, danger, impotence; he actually suffers a loss of energy in its presence. The effect of the ugly can be measured with a dynamometer. Whenever man feels in any way depressed, he senses the proximity of something “ugly.” His feeling of power, his will to power, his courage, his pride—they decline with the ugly, they increase with the beautiful.”
—Friedrich Nietzsche (1844–1900)
“You must get your living by loving. But as it is said of the merchants that ninety-seven in a hundred fail, so the life of men generally, tried by this standard, is a failure, and bankruptcy may be surely prophesied.”
—Henry David Thoreau (1817–1862)