Sellers who built businesses on online marketplace Jane.com say they’re owed $10 million after site’s collapse- but have no idea how it can be recovered
Sellers who used e-commerce platform Jane.com say they are struggling to recoup millions of dollars owed to them after the site suddenly shut down.
The Utah-based online marketplace owes more than 1,300 sellers more than $10.1 million after it announced it would close last month, documents show. NBC News reported.
Employees and sellers said they were “misled” by Jane.com, a platform once considered an alternative to Amazon and aimed at women-owned small businesses and female consumers.
The company, founded by Megan and Michael McEwans in 2011, stopped fulfilling orders and communicating with sellers in early October, according to business owners.
The closure has also forced sellers to look for alternative platforms to sell their goods, especially during the holiday season.
Sellers on e-commerce platform Jane.com, founded by Megan and Michael McEwans (pictured) in 2011, claim they are owed millions of dollars after the site abruptly shut down last month.
Dana Hicks (pictured), owner and CEO of the T-shirt retailer, noticed the delays in payments and asked company employees what was going on before being told the problems arose because one of the employees was on vacation.
Employees and sellers said they were “misled” by Jane.com, a platform once considered an alternative to Amazon with a focus on women-owned small businesses and female consumers.
“It was a shock,” Dana Hicks, owner and CEO of T-shirt retailer Limeberry Designs, told NBC.
“It was hard to get through Black Friday this weekend without the typical Jane numbers you see.”
Hicks has been selling graphic T-shirts on Jane.com since 2014. Last year, sales totaled more than $2 million, with Jane accounting for 90 percent of those sales.
In October, she noticed late payments from Jane.com and contacted company employees, who said the problem arose because an employee had gone on vacation.
According to her, payments have been reduced from three to four times a week to once. By October 26, she had not been paid for more than a week.
That same day, co-founder Mikhail emailed her, apologizing for the delays in payments and reassuring her.
“Hi Dana, I’m sorry you’re on a slower payment schedule. I assure you that we are doing everything possible to ensure that everyone is paid,” he wrote.
He mentioned a new product feature called “Moments,” which he said will help “increase engagement with your products.”
“While this is not a solution to your immediate problem, in the long run, if sellers get involved and take advantage of this opportunity, I believe it will be,” he wrote.
Documents show the company owes more than 1,300 sellers more than $10.1 million after the Utah-based online marketplace announced it was closing last month.
Payments have dropped from three or four times a week to once, Hicks said. By October 26, she had not been paid for more than a week.
Founders Michael and Megan, now divorced, did not play an active role in the company’s day-to-day operations.
Founders Michael and Megan, now divorced, did not play an active role in the company’s day-to-day operations.
The documents showed that they each received $350,000 annually from the company until the end of 2022.
In early November, after Hicks again inquired about her payments, Jane.com paid her $40,000, part of what she owed.
Hicks wasn’t the only seller facing this problem: many large sellers removed their products from the website after the company stopped making payments.
Mike Allen, co-owner of clothing company Johnny Threads, wrote in an email: “They stopped paying us for about 5,000 orders that were shipped and delivered back in early October.”
On November 17, Jane.com transferred its assets to DSI Assignments, which will help liquidate the business’s assets to pay off debts to creditors in the Delaware Chancery Court, where Jane was registered.
At the time, sellers suspected the company was on the verge of collapse after weeks of failure.
“It’s very frustrating for a small business owner. … It will destroy families,” said Jen Abegg, who began selling jewelry on the platform for more than a decade. Salt Lake Tribune.
Jane’s website has been “down for maintenance” since November 17th.
Hicks has been selling graphic T-shirts on Jane.com since 2014, generating more than $2 million in sales last year, with Jane accounting for 90 percent of those sales.
Documents released by DSI Assignments show the company owes more than $10.1 million in sales to more than 1,300 sellers, including 13 with more than $100,000 in sales each.
DSI said it was looking for buyers and trying to maximize the value of Jane’s assets, which could help pay off creditors and sellers, but Allen said he was not optimistic.
Documents released by DSI Assignments show the company owes more than $10.1 million in sales to more than 1,300 sellers, including 13 with more than $100,000 in sales each.
A private Facebook group called “Jane’s Sellers Helping Each Other” has been created as sellers try to reconnect with each other and seek solutions.
“This group is for former Jane’s salespeople to come together and bond,” they wrote in the group description.
DSI said it was looking for buyers and trying to maximize the value of Jane’s assets, which could help pay off creditors and sellers, but Allen said he was not optimistic.
“Obviously we won’t have any money,” Allen wrote.
Two unnamed sellers filed reports with the Lehi Police Department, but there was not enough evidence found to charge them with fraud, the Salt Lake Tribune reported.
DSI has asked sellers to file claims for money they owe by March, but there is no guarantee they will pay it back as they are “unsecured creditors” whose debts are not secured by assets.
“In most of these cases, although there may be some financial negligence involved, it is usually not a serious crime,” said retail expert Neil Saunders of GlobalData.
“These are simply companies that forecast cash flow incorrectly or take on too much debt and can’t pay it off.”