The jewelry "dot-com" sector just had another casualty. Miadora.com—which
had raised over $50 million from venture capitalists, enabling it to purchase
another web site, jewelry.com—recently said on its web site that it had ceased
operations. It’s not the only site having problems. Ashford.com is
still losing money and having problems with its stock price, and Mondera.com has
reportedly had a few rounds of layoffs.
All this shows that neither customers or investors are willing to foot the
bill for these sites’ promotions and advertising. Soon, they have to raise
prices on the items. But if they are as expensive, then they lose a good part of
their competitive advantage versus traditional retailers. This shows that the
day of a "free ride" and discount prices in the dot-com sector are
over.