7 Reasons Why E-commerce Businesses Fail

In this post I'm going to share 7 main reasons why e-commerce businesses fail. With the current innovations in technology many businesses are adopting e-commerce as the primary way of making their sales. It is however important to indicate that a lot of these businesses end up failing. But what are our businesses doing wrong? 

Some entrepreneurs make their success purely out of luck, but of course, you can't rely on luck. You need certain knowledge, good planning and organisational skills. If you pay attention to 7 of the 'failing factors' below, you'll be prepared to tackle your next business with much more confidence. 

#1 Shipping Costs

One of the biggest disadvantages to e-commerce business is costs associated with shipping. Charge too much and you might lose your customers, but make it free of charge and you might make a loss. If your target customers are from all around the globe, this is more of the case. It is advisable to take note of the different countries that you choose to ship to.

Imagine a case where more than 1,000 customers place an order and at the same time. Bulk shipping can cost you less, therefore you should find a good courier company who charges reasonable rates for bulk orders. Otherwise you might make a good revenue from the sales but you'll end up making losses as a result of shipping costs.

It is also important to indicate that when you choose to select an option where your customers are forced to pay for shipping costs they might end up leaving your website without placing an order because they do not want to incur an extra cost from the purchasing cost.  

There are other competitors that will also offer the same product and at the same time offer a free shipping. Carry out your research very well and make sure that you are selecting a plan that is both profitable to your business and attractive to your customers.

#2 Lack of Content Marketing

Marketing is an essential part of any business. If you fail in marketing then your business will most likely fail. Content marketing is about sharing a valuable content with audience for free in order to draw public's attention, generate leads, increase brand awareness and online sales. As opposed to a simple form of advertisements, a content marketing can be by blogging, YouTube videos, podcasts, infographics, e-books, and via social media. Basically to drive traffic to your website. The more traffic you have on our website the more likely that your products will be bought. 

I'd like to point out that content marketing is not exactly the same as blogging. The basis of content marketing is the fact that you can push your product on several ways such as a form of analysis or review, and not just simply blogging any subjects on your website.

Make sure that you sign up to all platforms that can play a role in pushing your product. Make use of influences and collaborators to make sure that your product is accessible to as many people as possible.

When writing a blog about a particular product, ensure that you write a longer one because it attracts hire ranking on search engines such as Google. More than 2,000 words if you can. The reason behind this is the fact that it will give search engines access to many different expressions and keywords. It means they will consider your content as authentic and informative, hence valuable for the relevant users. The second reason is the fact that it helps you generate more content ads. So Google will identify that and drive visitors to in-depth articles.

I would also like to point out that you attract more backlinks because there are more data insights as well as useful resources.

#3 Bad User Experience

In sales business the main goal is how you'll be able to attract your clientele not once, but repeatedly. UX (user experience design) matters - always ensure that the floor on website is user-friendly. This is an important element because it helps attract repeat customers. Websites with slow loading speed are a failure; Some websites that are too sluggish and have been designed in a manner that is not attractive.

Take time to choose the most updated website builder, theme and plugins. Always prioritize the usability when building a website. It's also important to test it and ask for feedbacks from other webmasters so as to make sure that it is working in the right manner.

Needless to say, mobile responsiveness is absolutely essential. Check if your website is mobile friendly or not from here (Google Mobile-Friendly Test). If the result comes out negative, it means your web platform is outdated and therefore you need to change it (change the WordPress theme, in most cases), no matter how it looks good to you. You also need to physically check your webpages on your phone to ensure it maintains a good readability.

#4 Lack of Email Marketing

With more traffic coming to your website, you need to consider your email marketing strategy seriously. "Money Is In The List" - lead generation is an important element especially when it comes to return on investment.

Bigger challenge is how you write your email newsletters / autoresponder. How you retain your subscribers, keep them interested but not push them too hard. In CyberCash Worldwide, Ray talks a lot about email marketing and recommends good tools and also training courses, Easy Profit Makers for example. Email marketing requires seasonal developments according to discount sale periods and various holidays throughout the year. It may not be exactly an easy task to keep up for some businesses, but with the right technique you'll be able to improve the customer retention rates.

#5 Poor Data Analysis

You don't just publish web contents blindly or send emails to your subscribers for the sake of it. Your priority is to attract new potential customers as well as to keep them coming back. You need to analyze your data very well. Everyone knows that data analysis is not an easy task.

Google Analytics is essential for your website to monitor your visitor behaviors. SEMRush is an all-rounder tool which includes keyword searches, and also allows you to analize your competitors' sites.

As for email marketing, you need to know that customer X will buy product Y before send them an email with data Z. OptinMonster allows you to generate leads according to the type of invitations placed in different pages. Whereas tools such as AWPro Tools can help you segment your subscribers in the most effective way.

#6 Bad Photos

In order for your website as well as products to look presentable, you need to use photos that are attractive in the eyes of a customer. If you are selling your own products, a decent photo equipment including a white background screen will make a dramatic difference. If you are selling already-manufactured products, images should be supplied to you, therefore you need to choose ones that are clear, easily recognizable and attractive.

Alternatively, see if you can have an extra budget and hire a professional photographer that can take high resolution photos to be used on a website. Sometimes it can be a costly affair but in the long run it will prove profitable.

Needless to say, all the photos on your website should be adequately optimized to avoid the sluggish loading speed as I mentioned earlier.

#7 No Reviews

You will need reviews if you need your product to be associated with your customers. Products with no reviews suffer a large deal. But there is a solution to it.

You can contact bloggers and social media influencers, ask them to test your products and write reviews in exchange for the products for free or at a discounted price. You can either ask them to write reviews on your website or on any of their platform.

Don't be afraid of receiving some negative reviews. Because we all know there is no product with all-perfect-10 reviews. And we also know that products with only a few "all positive" reviews always raise suspicion of stealth marketing. It will only lead consumers to believe that you might have paid people to create false reviews, or your team of staff may have made them up.

7 Reasons Why E-commerce Businesses Fail

As you may have noticed, 5 of the reasons above are directly to do with very basic digital marketing technique. For any e-commerce business owners, it's crucial to have a good knowledge in email and content marketing, as well as to have a certain level of ability to monitor your website.

With all that said, it's only the beginning that you may be overwhelmed by technical information. By learning persistently and keeping yourself updated with new analysis results and statistics, you will be able to continue your successful e-commerce business for years to come.

Why E-commerce Might Not Be Your Best First Step

1. Overwhelming Competition

Imagine launching a brand-new, brick-and-mortar store right next to Walmart or Target. Intimidating, right? This is what the e-commerce world often feels like for newcomers. With heavyweights like Amazon, eBay, and Alibaba dominating the scene, standing out becomes a herculean task. Sure, there's a bigger pie out there, but only a tiny slice might be left for you.

2. Hidden Costs Galore

Many think that setting up an online store is cheaper than a physical one. The lack of rent and utilities sounds enticing. But wait till you see the costs that aren't immediately apparent. You'll need to invest in website design, hosting, SSL certificates, and payment gateway integrations. Then there's the cost of ads, since organic traffic won't come pouring in overnight. Before you know it, your budget has ballooned without any guaranteed return on investment.

3. Logistics and Shipping Nightmares

Shipping products sounds simple. However, ask any seasoned e-commerce entrepreneur, and they'll tell you tales of lost shipments, angry customers, and refund chaos. Not to mention the added headache of international shipping, customs duties, and varying delivery timelines.

4. The Returns Dilemma

Physical stores often deal with returns, but e-commerce businesses have it harder. Customers can't try or test products before purchasing, leading to higher return rates. This not only affects your profitability but also ties up your inventory and can lead to wasted resources.

5. Intense Customer Expectations

In the online world, customers are pampered. They're used to next-day deliveries, impeccable customer service, and websites that load in the blink of an eye. When they don't get what they expect, they're quick to leave negative reviews. The pressure to meet these lofty expectations can be taxing, especially for someone new to online business.

6. Cybersecurity Threats

Physical stores need to worry about theft, but at least they can see the thieves. In the online world, your threats are invisible but just as damaging. Cyber-attacks, frauds, and data breaches are all too common. Protecting your e-commerce business from these threats requires a significant investment in security measures, both in terms of money and time.

7. Personal Touch, Where Art Thou?

Engaging face-to-face with your customers is an advantage that brick-and-mortar stores have. E-commerce eliminates this human interaction. Converting online visitors can be challenging without that personal touch. Automated chatbots and email sequences are helpful but can't replace genuine human connection.

8. Regulatory Hurdles

Regulations related to e-commerce are ever-evolving. Whether it's related to digital taxes, consumer protection laws, or international trade agreements, staying compliant can be a maze. Falling foul of these regulations, even unknowingly, can result in penalties and a tarnished reputation.

9. The Allure of Instant Results

The digital world often creates a mirage of quick success. Platforms showcase success stories of e-commerce businesses skyrocketing overnight. However, what they don’t highlight is the time, effort, failures, and persistence behind that success. Newbies might find themselves disillusioned if they don't see immediate results.

10. The Burnout Factor

E-commerce isn't a "set it and forget it" model. It requires constant attention. From updating product listings to handling customer queries, from monitoring website uptime to tracking inventory - it's an endless cycle. Without a proper team or resources, this can lead to quick burnout.

To wrap things up, this isn't to say e-commerce is a terrible choice for everyone. Many thrive in this space. However, for those just dipping their toes into the world of online business, understanding these challenges can help set realistic expectations. Maybe starting with a different online venture or blending both physical and online channels might be a more palatable first step. Whatever you choose, go in with both eyes open!