[robocat]

When anything fails (even a business) a suitable excuse is found (maybe a story that executives can sell to investors). If you were there then sometimes you know what the actual hidden reason was (often an intersection of multiple causes).

It's a human pattern for businesses to discover a strawman, build a story about that strawman, then share that story widely.

Not saying the above answer about pets.com is wrong - just that in my experience you need to be cynical enough to ignore the story and then resourceful enough to find a better causal reason.

Edit:

Scaling is NOT given as a reason. "Despite only earning $619,000 in revenue, the business spent more than $70 million on advertising and marketing", "the company sold its pet products under their original purchase price", "bulk items like dog food were expensive to ship".

I guess another reason is that people make up stories like blaming scaling?

I'll make one up: Amazon owned 50% of pets.com and Amazon encouraged it to fail.