Value America

» see valueamerica.com as it lived, on the wayback machine

~ the obituary ~

in 2000 i was sixteen, online at home in ankara on a modem that topped out at 56k, and the idea of buying a television off a website was not a thing that existed for me. Value America was an american store, and even in america it was a store for people with a credit card and a shipping address the whole system trusted. it sold to a country i did not live in. i read about the dot-com crash later, the way you read about weather that happened somewhere else.

Value America was founded in 1996 in Nevada by Craig Winn and Rex Scatena, then moved to Charlottesville, Virginia in 1998. the pitch was clean on paper. instead of holding inventory, the site would take your order and pass it straight to the manufacturer, who shipped it directly. no warehouse, no stock sitting around losing value. it was the same just-in-time logic Dell and Wal-Mart had made famous, aimed at selling every category at once.

the money believed it. Paul Allen's Vulcan Ventures put in cash and FedEx's founder Frederick Smith backed it. the april 1999 IPO closed its first day at fifty-five dollars a share, which valued a three-year-old company with no profit at around two and a half billion dollars. for a few months Value America was the future of retail.

~ the case file ~

~ the slide ~

the model that looked elegant on a slide fell apart in practice. when a customer ordered several things at once, the parts came from different manufacturers at different times, and Value America had no clean way to track any of it. orders shipped late or shipped wrong, and the company had to cover the cost of every mistake. its marketing spend stayed enormous while its margins stayed near zero.

~ how it actually ended ~

by early 2000 the stock had collapsed from fifty-five dollars to under a dollar. the founders were pushed out and layoffs came. on 11 august 2000 Value America filed for Chapter 11. the useful part that survived was the custom supply-chain software, sold off to a distributor called Merisel that october. the store itself was gone barely four years after it started.

~ the long tail ~

Value America landed on the same shelf as [[pets-com]] and [[webvan]], the dot-coms that raised fortunes on a story about logistics and then learned that logistics is hard. [[boo-com]] and [[kozmo-com]] are buried in the same row. the odd thing is that the idea was not wrong. selling everything from one website with no warehouse of your own is roughly what the big marketplaces became. Value America just tried to run before the plumbing of the internet could carry it.

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