There are a million E-commerce sites out there, and probably only 1%-5% of them are remotely successful.  We all know about the burst of the dot com bubble, but just because many E-commerce business failed doesn't mean that there is no money to be made in electronic commerce. 

There are many reasons that E-commerce sites fail.  A large reason many of the E-commece businesses failed in the late 90's is due to the fact that there was no underlying business model.  People were starting E-commerce sites with no plan or process for fulfilment.  Thus, customers weren't recieving their products, and no one returned by buy more products.