EToys Essay Example For Students

EToys Essay II. Company Mission; Background/HistoryThe vision of eToys is to create the premier family-oriented destination on the Internet. eToys was launched in October of 1997. eToys was created to offer an extensive selection of products from well known and specialty toy brands, a combination that would be both economical and physically impractical to stock in a traditional store like KBToys or Toys R Us. It came became known as the leading Internet retailer of childrens products, carrying more than 100,000 competitively priced items. Another key feature of eToys is the fact that people can shop 24 hours a day, 7 days a week and have instantaneous access to product information, helpful shopping services, and innovative merchandising strategies. Not only does eToys provide toys, but they also provide a number of services to the consumer. They supply gift recommendations by age, relationship, and price specification, child-appropriate gift wrapping, personalized message cards to accompany the gifts, and electronic gift certificates. eToys also provides a birthday reminders service, through which they notify shoppers of a childs birthday three weeks in advance via e-mail. Through the Wish List service, parents and children can e-mail family members and friends a list of the gifts they would like purchased for them. eToys launched http://BabyCenter.com as a resource for shoppers of infants and toddlers. Another website wholly owned by eToys is http://www.ParentCenter.com which serves as a resource for parents as their children grow beyond BabyCenters prime age range. This new parent center site also provides the company an additional high margin revenue opportunity. eToys advertises on major sites such as AOL, Sesame Workshop, Excite, Infoseek, Microsoft Network, Yahoo!, and Lycos. In October 1999, they initiated an international expansion by launching http://eToys.co Free Media Violences: Media Violence is No P EssayeToys stands behind the quality of all of their products . A consumer may return any item in its original condition, for any reason, at any time. eToys will gladly issue a gift certificate covering the value of the return that may be used to purchase any item(s) they carry. Or, if the consumer prefers, they will replace any item, or issue a fully refund its the consumers choice. If eToys made the mistake, they will also refund the shipping and any Gift Wrapping charges. Software, videos, video games and equipment, and audio products must be returned unopened. Information about their return policy is included with each shipped order on the back of the packaging slip. It takes approximately two weeks to process a return once it arrives at the warehouse. A consumer can email eToys to check on the status of a return. eToys has over 100,000 childrens products, including toys, books, video games, software, videos, music, and party goods from more than 750 manufactures. eToys carries more than 750 brands, including well-known brands such as Barbie, LEGO, and Disney, as well as specialty brands such as BRIO, which are not available at toy superstores like Toys R US. Aside from just toys, eToys offers personalized message cards, electronic gift certificates, and a birthday reminder service to its consumers. In October 1999, eToys initiated their international expansion by launching etoys.co.uk. Then, in March 2000, they launched yet another international site called babycentre.co.uk. These sites, as stated earlier, were designed specifically to meet the needs of the customers in the UK and serve as the springboard for further expansion across Europe. eToys is headquartered in Santa Monica, California, and has regional offices in San Francisco, California; Danville, Virginia, and London England. In keeping up with its strongest competitor, http://www.ToysRUs.com, Etoys has expanded its business to acquire http://www.Toys.com and http://www.eparties.com to keep up with the financial presents of Toys R Us, Inc. With similar fluctuations in their stock prices, the ever expanding ideals of eToys into other areas such as parties, videos, and overseas markets, eToys is holding its spot as the number one online retailer in childrens toys. A decision, announced in April of this year, decided to spin off the European segments of the company in order to reach that goal of finally turning a profit for the company. During our fifteen day assessment of eToys there has been a decrease in the stock prices of our company for twelve of the fifteen days. Even with the downward spiral in the stock prices, reaching a fifty two week low in the assessment, analyists predict that with the up coming holiday season it will all turn out for the better. Since the opening of the web site in October 1997, there has been a rapid growth in the net sales of the company. Yet like all of its competitors it has yet to see a profit. Some predict that within five years that eToys will see it first net profit in the companies short history. During the past year, eToys shares have fallen on the Nasdaq to less than $2 from $70.52. EToys long-term rating was downgraded to neutral from accumulate by Merrill Lynch and the assessment J.P. Morgan was also downgraded. The people at J.P. Morgan forecast a doubling of revenue to $220 million in the third quarter of this year up from $106.8 million a year ago. Five reasons for their doubts are: competition, the challenge to diversity from the toys business, heavy seasonally of sales, the cost of building three brands (eToys, http://www.babycenter.com/, and http://www.parentcenter.com/) and a shift in product mix from mass-market to specialty and private-label goods. eToys extended its position as the Internets leading site for kids-oriented commerce, content and services with the launch of its new party and Hobby stores and the introduction of new merchandising features designed to enhance the sites overall customer experience. The Party Store is a one-stop shop for birthday, holiday and other kids-oriented parties. The Party Store allows eToys for the first time to tap into the $5 billion kids party goods segment, a fast growing and non-seasonal addition to the companys product lines. The Hobby Store is stocked with thousands of hobby products including trains, planes, automobiles and rockets. Hobby enthusiasts comprise a $4 billion market in the U.S. and eToys Hobby Store is designed to make shopping for hobby products easy. There have been some major alliances between some major competitors for example Amazon.com and Toys R Us, Wal-Mart, Kmarts Bluelight.com and Target. Last year, Amazon.coms toys and related business brought in $95 million in sales, comparable to EToys $107 million. EToys has shifted its product mix to specialty retail and private-label products from traditional mass-market products, which may affect the profitability target. And Wal-Mart has implied that it will keep improving their Web site and may become a major online player by Christmas of 2001. eToys received a $40 million revolving credit facility from Foothill Capital Corp. It will use funds from the two-year facility, which is backed by certain company inventory, for working capital and general purpose. The Wall Street Journal said in September that eToys needed about an additional $100 million to sustain its operations until profitability. eToys Inc. entered into an amended agreement with shareholders of its series D convertible preferred stock, according to a Form 8-K filed November 18 with the securities and Exchange Commission. The preferred shareholders waived their rights to enter into a short sale of eToys stock. Shareholders also agreed to waive their right to convert the preferred stock at any time if eToys common stock fell below $3 a share for 10 consecutive days. eToys common shares originally closed below $3 on Nov. 8, dropping 78 cents to $2.56 a share. Since that time, eToys shares havent closed above $3. They submitted to the shareholders a conversion election notice for 2,000 shares of the convertible preferred stock. eToys issued 10,000 shares of the convertible preferred stock. They agreed to provide at least 1,000 preferred shares by Jan. 1 for a conversion to take place after Jan. 31 to shareholders with a conversion option. Bibliography:VIII. Referenceshttp://www.wsj.comWall Street Journalhttp://www.Excite.comhttp://www.eToys.comhttp://www.gartner.comhttp://www.cbs.marketwatch.comhttp://www.quicken.com/news