Here are what other commentators are saying about the Ferrit closure. It is certainly a popular topic, and the themes are recurrent and certainly entertaining. Everyone brings a slightly different perspective, and it is worthwhile checking them out.
This is also makes a snap nice survey of the New Zealand internet/business blogosphere, including a couple of sites that I had not run into before.
Jim Donovan: Ferrit to be put out of its misery
The only surprise is that Telecom has taken so long to send in the exterminators.
Ferrit failed to capture customers because its brand personality was fundamentally flawed from Day One. It doesn’t matter how great your site is if no-one wants to visit it.
Stuff: Ferrit to fold as retailers move offline where Ferrit blames the retailers, not themselves, but
Ferrit never made a profit, and Mr Brayham said in June last year that the business was still years away from breaking even.
Telecom retail chief executive Alan Goudie said yesterday: “Ferrit has continued to grow during the past three years, but the current retail environment has meant the break-even point has shifted out a number of years.”
Juha on Geekzone:Telecom closes Ferrit
Tech journos like myself have been taking bets on when Ferrit would close, but expected it to happen much sooner after Dr Paul Reynolds took over after Theresa Gattung at Telecom.
“Journalists based across the road from the Ferrit offices in Auckland during the set up phase had a good view of the busy emerging new business. Ferrit staff’s ability to play ball games while speaking on mobile phones was envied.” (Juha was one of those Journalists)
Devour’s Barnicle Barnes: Who killed the Ferrit?
I’ve had the pleasure and the pain of working with Ferrit over the last 3 years and it was interesting to say the least. When it comes down to it the biggest problem with Ferrit is the same issue that has tripped up Telecom time and time again. That was the fact that it was run by marketers and not technologists….
….The list goes on but from the word go it was over spec’ed, over-funded, over-staffed, over-marketed and ill implemented. Next time Telecom please, please, please before you build anything ask yourself “Is this the right thing to do? Would I use this?”.
And please, be truthful and authentic. It is going to take a long time until people start to love you again.
Ben at Geek.nz Ferrit is no more
charging large commissions on all sales from day one is not the ideal way to kick off an online selling community, especially when the majority of your partners already have their own web presence.
Alister Helm at the excellent Unconditional: Does the closure of Ferrit provide any insight for real estate?
the question would naturally be – how many sales were converted from that traffic and how did that compared to the operating overhead of the company (easily $1m per month)?
Many tens of millions of dollars have been poured into Ferrit largely focused on advertising the brand which to me always felt like taking a sledgehammer to “tell” people to use a site that of itself lacked a deeply engaging or memorable experience.
Web businesses require a culture of lean operation matched to fast learning.
I think the summation is we are seeing natural “Darwinian” evolution at work – aided by the current economic climate no doubt.
Dave Farrar at the popular Kiwiblog: Dead Ferrit
It didn’t provide people with enough of an incentive to shop there, rather than elsewhere.
Vaughan Rowsell – Ferrit – an expensive lesson
PEOPLE ARE NOT THAT LAZY: Ferrit fell for the misconception that people will shop online in their undies because they can and it is less work than going to the shops. People are not that lazy. People love shopping. The trend is to research online and then buy in store.
THEY FORGOT ABOUT THE CUSTOMER: I kinda get the feeling Ferrit thought the retailer was the customer, and forgot about the people who will actually part with their cash.
Will anything fill the gap, well is there a gap? I think Trade Me have it pretty much covered. Otherwise, if you are a retailer wanting to sell online, then there are plenty of plug and pay shopping tools that you can plug into your own site.
Tony Hughes on Geekzone: Telecom’s Ferrit.co.nz online store os finally being eradicated
given the sheer amount of undisclosed millions of dollars in development, marketing and running costs comes as no surprise to anyone with an elementary understanding of e-commerce, business and/or 3rd Form Economics,
deciding “Hey lets open a website, and be successful by pouring millions and millions of dollars into it.” is NOT actually a good web strategy.
Skinny: The Ferrit is dead
It’s finally been acknowledged that the site is no longer core to the company’s business strategy.
Wow. It took three years and several hundred million dollars (at least) to work that out.
e-commerce sites became cheap enough that any retailer could set-up a presence. Obviously this was not factored into any projections for the future of the site.
Telecom was in the business of selling mobiles and phone plans. What gave them the notion that this was ever going to fly.
Natalie at SimpleandLoveable: Ferrit’s gone bust – what a surprise
We always hear about the necessity of entrepreneurs to leave their startups behind when they reach a certain stage. At that stage the skillset needed for success is entirely different. Apparently it works in reverse too. It must be hard to think small and simple when you are part of a massive complex corporate.
The Ferrit ads were stupid. They appealed only to the likes of my mother who doesn’t DO internet shopping. So the money was probably wasted anyway, but also made them the laughing stock of the very people who should have been their core initial customer base – techies
allaboutemail: Farewell to Ferrit – thank God!
A common theme amongst the myriad of comments made about Ferrit experiences was the appalling after sales service
electrictoolbox: Ferrit finally shuts down
I had a bad experience with Ferrit right at the start. I was trying to integrate Outdoor Action with their system, did a heap of work and then they went and completely changed the spec about how data was supposed to be supplied. Whenever I emailed people for support (and complaints) more and more people got included in the email and there were something like 10 people involved in the emails (although I never got any help). In the end I said enough is enough, didn’t charge the customer and decided to not have anything to do with Ferrit ever again.
Aardvark: They spent HOW MUCH on Ferrit?
I despair when I see how much money is thrown down the cyber-toilet by otherwise sensible people who seem to throw all their regular checks and balances out the window when a project has the word “internet” or “online” associated with it.
THIRTY SEVEN? My God! It was just a website for goodness sakes.
Meanwhile Twitter is all a-twittering about the closure. Check out the comments.
@nzkox: Finally ferrit.co.nz succumbs to the epic fail that is their business model, bye guys.
@deeknow: So ferrit.co.nz is to be axed, would LOVE to know how much they spent on advertising
@kingnivin: Ferrit – The fact that I still don’t know what you {are} means I’m not surprised by your closure. Later bro.
@che_tibby: ferrit was a stupid idea >.< who in their right mind tries to compete with trademe, or pricespy for christssakes. @telecom, ur idiots.
@natobasso: #ferrit I LOVE how Teleom had to buy ferrit.com that was a porn site in order to clear up confusion. Did that not tell them anything?
@Stuartm: Glad to see the end of Ferrit – only because the ads were so annoying.
@farmgeek: There are some very smart folk in Ferrit with some great IP from the whole experience – hopefully @TelecomNZ will make the most of them now.
@ad_pro: With Ferrit gone, who’s going to buy masthead adspace on Stuff and NZH?
@davesparks: I like Ferrit. Always had good times there. *Best* place to buy a kettle ever. Fact. One can only hope the knockers take time to be gracious
Lance Wiggs 
The use of twitters in this post is interesting Lance, and provides some great context for the discussion. I am impressed.
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It’s a pity that Ferrit’s out of business because it puts a negative slant on the success of e-commerce and e-business in this country.
Figures from the OECD show that New Zealand and Australia have a healthy B2C e-commerce spending per-capita.
I have had personal, insider experience of both 1-day and Ferrit. Both have ambitious e-commerce models, except that 1-day has a fabulous business model and a very user friendly, simple site, and Ferrit does not.
In our own e-commerce business, http://www.boomskateboarding.com, we have seen a growth of over 400% as consumers become more comfortable with online shopping.
Although Ferrit’s demise is something to lament for the industry as a whole, it is important to remember that there are success stories out there… and the old adage remains true… keep it simple and keep it real!
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Thanks for the great round up of opinion (as well as your own) – great post!
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Thats more than I ever learnt in Uni on one blog post. Nice one Lance, will be reading your blog. I agree they had a lot wrong.
Telecom did not realise how un-tech savvy most new zealanders are, especially retailers and those that shop at traditional retail stores regulalry.
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I wrote a technology recommendation report when I was doing some consulting work for Ferrit in their second year of operation. In the report I detailed Amazon’s technologies (based on publicly available information about Amazon because most of their technologies is still a guarded secrets – such as journal or conference articles being published by their researchers in various publications), because Ferrit management wanted to know how Amazon operates. I recommended to use certain open source projects plus custom developed ones. I also recommended certain off-the-shelf commercial softwares to use if adopting open source software and custom development seemed a costly exercise. None of my proposals in the report were implemented and I didn’t know why. That was a waste spending for Ferrit.
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What is staggering are the reported start up costs. Good websites don’t come cheap (although some do, especially these days) but really…
Ferrit businesses should move here: http://stuffonsale.co.nz/
which predates Ferrit :-)
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I think there are many other web sites who could face similar fate of Ferrit. Trade and Exchange (www.te.co.nz) and Sella (www.sella.co.nz) comes to mind.
Trade and Exchange is a NZ icon, but they need to realize that running an online website is different to publishing papers. Their site resembles the paper too much and needs to cater properly to the online users to succeed.
Sella is mixed up with auctions and classifieds and so cluttered. Again the site needs to understand that ease of use is important.
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Oh, the LOLs. Why’d you pull the pin so soon, Ferrit? I thought you had online buyers right where you wanted ’em?
The only thing these guys were ever good at was throwing good money after bad. Now that’s not fair, is it – they must also have had magnificent powers of persuasion, because they siphoned $36m out of Telecom’s coffers…
They’re gone, and we’re all glad to see the back of them. The only question that remains in my head surrounds whether the company has actually managed to develop any value in the company. And by that I mean in intellectual property. They’ve spent three years hiring contractors, surely some of this money was funneled into proprietary ideas that could be re-sold to another player in the online marketplace business?
I’m pretty sure they’ll have a hard time selling their *stunningly successful* business model, and I reckon that their trade marks are totally worthless, but they MUST have some decent software to show for it? Surely? A patent here; a copyright there – by Gods, they’ve gotta have something?!?!!??
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I agree with Don – I think $15 million to set up a website is astronomical, but then, when was Telecom ever economical ;-)
I would love to have even 1% of that budget for marketing !
What’s happening to the Ferrit database :-) maybe they should stick it up for sale on Trade Me :-) I’d bid $1 for it :-) I’m sure there would be lots of people interested in our skateboards lol !
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I was one of the chorus on Twitter.
I loathed Ferrit on sight right from the start – not quite sure why I disliked it so much, but somehow it was just all wrong. Those ads were just annoying. And the name! Who wants to shop a rodent? Reminds me too much of the Felicity Ferret column in Metro, which I always ignored back when I read that magazine (in the days before Bill Ralston became editor).
I thought they were doing better when they axed the geeky guy saying “buy cool stuff here” and instead went cartooning and articulated the benefits : compare prices from several stores, and described it in a way that made sense to the customer: It’s like an online shopping mall.
I agree that it just didn’t seem to be targeted at anyone in particular.
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Some really great comments in this blog. Years ago when Ferrit was launched I made an outlandish comment on Rod Drury’s blog about how in my opinion Ferrit was more as a decoy for tax write-off (for the Big Bro Telecom) than anything else. I mean, think about it; some 200 odd million just to break even – online shopping aint rocket science. Look at Fishpond. They used OsCommerce Open source version when they setup their shop….now they are in a massive warehouse near the airport and appear to be doing well (i hope). Innovation does not need to be expensive – just well planned and properly executed
With the amount of money spent and needed to break even, it is evident now that there was no clear strategy or desire to make a profit (let alone break even) in the first 3-5 years.
I totally agree – Their tv ads were a joke.
All up – Ferrit was going to die sooner or later – I’m just as surprised as some of the others in this post that it took them so long.
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It’s like buying SAP when you need Xero.
Falafulu Fisi and Manas Kumar I believe you have you hit the nail hard on the head here. From what I hear Ferrit chose an archaic, expensive off the shelf system then customized it using outsourced partners. That’s an almost comedic way to go about getting the most expensive and least customisable solution in the longest time.
OsCommerce has been around for eight years – predating Ferrit by five years. If they had taken that path as Falafisu suggested then we would have seen a much quicker development, programmers working in current technologies and a hugely better experience.
As it is the spaghetti code is probably worthless and certainly not going to generate any Intellectual Property sorry Roger Dodger.
Meanwhile as Rachel says Ferrit delivered comedically inept promotion and marketing. The rodent, the porn Ferrit.com domain, the premature campaigning, the list is really endless.
All this comedy is surpassed by the sheer amount of money poured down the ferrit hole – showing that poor corporate governance was the real issue here. And there will be more to say on that (in general) another time.
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We use oscommerce and whilst it has quite a few warts (and in fact may well be ‘a dead parrot’ to quote someone from the osc forum), it is still a robust technology (and free!)
We launched our site in April 08 and we’re approaching 500,000 hits – not bad for a small company selling ‘specialised’ product that has never been in the e-commerce market.
I don’t know about other online retailers, but our experience has been nothing but positive and we continually fight to cope with the demand.
We recognise that our site is not perfect, I update it daily. I’m sure we could throw money at it to upgrade the design etc ($how about 15 million lol)… however, what’s really satisfying is to watch as the orders keep growing on a daily basis, as do our customer lists – and it has been a very cost-effective method of reaching out to people we wouldn’t ordinarily have reached.
I investigated the Ferrit route because the MD saw them on TV but I was horrified at how clumsy and difficult their integration system was, and how blinkered their customer services were – the whole model smacked of “well, these are our rules and this is how we do it. Now sign up, pay us the monthly fees and the commission and that’s that”. When I requested a listing for our business in a new category (there was nothing for skateboarding sports on their site) – it was going to take them 3 weeks!
Anyway, enough of the knifing… all I really wanted to share with everyone, was that in my experience, e-Commerce does not need to be expensive, or complex, you just have to know what you are doing (I taught myself) and have something decent to sell that people want!
In the end, your customers are your judge and in the case of Ferrit (and others) they have well and truly been sentenced!!
Thanks Lance for this intriguing dialogue
sol
http://www.boomskateboarding.com
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When the news broke about Ferrit one of the first comments from our online team was ‘Finally!’. Sadly (for Telecom) it was never a matter of if but when.
Unfortunately a few of our clients (being that we specialise in eCommerce) did have fleeting concerns over whether it meant online in general wasn’t all it was cracked up to be.
Luckily bloggers like yourself, and most major newspapers, didn’t accept Telecom’s spin, and users were finally listened to about why Ferrit was doomed from the start.
My favourite comment by a Ferrit user on another blog was “Ferrit sounds like someones ‘oh that sounds great, let’s do it!’ … I wonder if there was even a business plan created before it started?”.
It was not at all user-friendly and obviously had corporate not customer’s best interests in mind (the list goes on and on as to why it failed of course).
I think Ferrit is best summed up by the old military saying:
‘Fail to Plan, Plan to Fail’
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