| It may be unkind to speak ill of the dead, but surviving e-retail Web sites can learn a lot from the mistakes that led to the untimely demise of so many B2C operations.
Postmortems of bankrupt e-retailers reveal that most weren’t felled by some inherent flaw in B2C Web commerce but rather by a high-growth, free-spending habits that are still common.
Industry watchers acknowledge that it’s easy to pass judgment in hindsight. But most agree that e-retailers grossly overspent on marketing and IT infrastructure in an attempt to grow too quickly. That was particularly true among dotcoms in the furniture and grocery businesses, where low margins and high shipping costs made the core economics dubious from the start.
“If you climb too fast, you generally end up not making it to the top,” said Farooq Kathwari, chairman and CEO of furniture retailer Ethan Allen.
E-retailers such as Furniture.com and Living.com based their strategies on an assumption that experts say has destroyed multitudes of dotcom merchants: the notion that “first-mover advantage” is more important than anything. In reality, slower growth is healthier for many start-ups, especially low-margin businesses, where it could take years to recoup big losses. | 
