Two serial entrepreneurs are poised to launch an online marketplace for brand-name household items that boldly aims to compete not only with the likes of Amazon and drugstore.com, but mega-retailers such as Wal-Mart, Target, and CVS Caremark as well. It’s also up against something else that might be just as powerful: memories of past online consumer-goods debacles.
On June 23, after a beta test period that was prolonged by tortuous negotiations with big consumer-goods makers, many of whom are still not on board with the venture, Alice.com will make its debut. The site will offer 7,000 products made by 55 manufacturers, such as Procter & Gamble, Colgate-Palmolive, and Clorox. It is the brainchild of Mark McGuire and Brian Wiegand, who sold their last endeavor, online ad business Jellyfish, to Microsoft for a reported $50 million in 2007.
The pair readily admit to having absolutely no experience in retail. What prompted them to enter the stodgy, $350 billion consumer-products realm? “When we left Microsoft we wanted to swing for the fences,” says Wiegand.
Platform to Bypass Retailers
No question, the odds seem to be running against success. Some previous attempts to deliver low-margin household goods online, most notably Webvan, blew up in spectacular fashion. Today there are plenty of well-capitalized competitors in related areas of online retailing: Amazon offers thousands of packaged goods like cereal, coffee, diapers, and detergent alongside its traditional books and electronics, but does not break out sales of those items.
Drugstore.com has been around since 1998 and now carries more than 45,000 over-the-counter (nonprescription) products, but has struggled to turn a profit, posting a net loss of $8.3 million last year. Nearly 100 grocery chains also offer some form of online ordering through an e-commerce outfit called MyWebGrocer, which was founded in 1999. “The competition is broader than they think,” says Mike…