There have been a growing number of startups and companies in the e-commerce segment right now. However, it is also a fact that there are a similar number of outgoing startups in the same industry too. This is because the competition has become so cutthroat that it is hard to compete without sufficient funding. However, we have a new report from Axios where a startup e-commerce business that had funding is also shutting down soon.
The startup we are talking about is Hollar which is known to be an online dollar store. A dollar store is basically a store where you will find the best deals and bargains and goods can be purchased under a dollar. Now, the dollar stores were only available offline but Hollar wanted to bring dollar store-like bargains online as well. They were also offering those bargains on branded products such as kitchen goods and beauty products.
Hollar’s mission was that dollar store denizens would opt for buying multiple products at one time. It was quite a thoughtful idea to alleviate the pressure on shipping costs. However, according to the source, unit economics never got the chance to pan out.
The company’s co-founder and CEO, David Yeom, started with an app worth $200, worked on its new searching venture for a new CEO. The exact reason for the change of leadership was not clear. However, their move involved the culmination of the regular tanks with the other board of directors to make Hollar as best as possible.
One thing that every e-commerce business has to keep in mind is the logistics and shipping costs attached to buying a product. Since we are talking about dollar stores, these type of stores relies on people buying in bulk from them. While it does not matter that much for retailers, it does matter a lot for online stores like Hollar. The idea from Hollar’s founders was that people will buy items in bulk and thus, the shipping costs will be taken care of. However, this is where things went wrong for them as per reports. It was seen that Hollar’s customers did not buy multiple products and thus, the shipping cost economics got messed up.
According to Axios, Hollar started looking for a buyer late in 2019. Also, it opted for a possible deal for the assets of the company that wanted to get acquired by a retailer.
The retailer named Five Below is also in the final stages of negotiation to buy out Hollar. But without surviving the transaction for the Hollar, it was backed with the venture by Perkins Caufield & Byers, Lightspeed Venture, Comcast Ventures, Greycroft Partners, Index Ventures, Forerunner Ventures, and Pritzker Group. Also, the company managed to raise more than $75M in total funding. However, we have been told that they will bring more assets and employees with them while we might see Hollar’s site and app both taken down or re-branded.