Setting up an ecommerce business can be relatively easy and fast. But creating a successful online business is more challenging with 80-90% failure rate.
Understanding the possible pitfalls in starting and running a successful ecommerce business will go along way in helping you to avoid them.
Here are the seven (7) reasons why most ecommerce businesses fail:
1. Small niche
Unsuccessful ecommerce businesses are those in a niche where everyone is trying to sell the same products and being too generic. Don’t pick a product that everyone online is trying to sell. In order to make it big time, you have to niche further down.
2. Low-quality products
Selling poor quality products is one of the fastest ways to lose customers which will in turn lead to business failure. If your product is poor, you are possibly going to get a return, a poor review, and negative comments. To ensure that you’re only providing good quality products, test or assess them yourself. Use the products, and review them. Your judgement is likely to be the same as potential buyers.
Your ecommerce idea might be brilliant but it all comes down to your website. An ecommerce site must be secure, functional, adapt well to various devices, and load very quickly. You also want to have a site that is easy to navigate. Make the process stress-free for your potential customer from searching for products they are interested in to checking out.
4. Poor Product Photography
Online shoppers cannot physically inspect the products you sell, so they will need a strong visual representation of a product to help them understand it and want it enough to buy it. Get yourself a camera or a smartphone with a good camera setup, make sure product images are clear, and focused.
5. Product price
If the prices of the items you sell are high, then you’re not going to make desired sales. Pricing begins from your supplier, if you have a high unit price from your supplier this will impact your profit. You need to settle for a unit price that will allow you to factor in other costs such as packaging, shipping, tax, ads, etc. The goal is to make a profit for every single unit of product sold after all costs are factored in. Also, don’t attract a consumer with cheap prices, only for them to realise the additional charges when about to check out. This is one of the top contributors to cart abandonment in online businesses. Make sure to deliver what you promised.
6. Poor Marketing Strategies and Misleading Ads
You need to ramp up your online marketing strategy. Your plan should include paid, owned and earned media, and consist of useful and relevant content.
Think of your audience. Who are they? What do they want from your brand? What social media platforms do they use? These are all questions will help you formulate your marketing strategy.
For all sizes of ecommerce business, social media ads are a great way of driving traffic to your online store and are relatively cheap compared with other forms of paid advertisements.
A very important tip for running ads is that they must not be misleading. Do not make customers click on an ad that takes them to a different offer, one that doesn’t align with what they saw in your social media ads.
7. Bad Customer Service
This is one of the reasons for ecommerce failure. Make yourself available or have a rep that can attend to people’s questions and complaints. If you ignore customer service, consumers will move to your competitors even if you sell good quality products.
Customer service can make or break your online business. If you have a team handling this, make sure they are patient and polite to your customers.