5 Reasons Why E-commerce Businesses Fail And How to Avoid Them
The idea of e-commerce businesses might seem very appealing at first.
The process is fairly quick, easy and not very expensive.
But now it’s time to disappoint you a bit – about 80% of e-commerce businesses fail.
Turns out that operating an online business successfully is way more challenging than many entrepreneurs imagine.
So why the vastness of the internet isn’t welcoming businesses? And what are the mistakes on behalf of entrepreneurs that doom their businesses to failure? Let’s find out.
Not Enough Investment
You can open your online store with a few hundred bucks but you won’t be able to sustain it. More and more cash investment will be necessary along the way. The minimum to establish an online store ranges between $5,000 and $10,000. If you want your business to thrive and attract costumers you obviously have to put considerable thought and money into it. Invest, work, repeat, that’s your initial plan.
Lack of Traffic
No traffic no revenue, as simple and fundamental as this. If the awesome website you’ve sweated over for months isn’t getting traffic, there is no way you’re going to sell. Pay-per-click advertisements are good to draw traffic. However, those are not cheap, so think twice before investing into them.
Up to this point, content is still the marketing king. So, take your time and creativity and put together a good content strategy. And finally, there is no better way to introduce your content to the world than through social media. So, make that a priority too. This scenario is much slower, but it benefits e-commerce businesses as no other.
A Bad Website
No matter how thought-out your business plan is if your website sucks you’re not going to make it. If you want customers, you should know how to please them. Your website should be safe, functional, have an adequate search, load quickly and be adapted for mobile devices. And less is more doesn’t work here, those are the least you should do. You should think of how each and every aspect will contribute to the overall shopping experience. Are you playing around with language just right? Is the website visually attractive?
The key thing here is your product photos. Those are the first thing your customer will judge your services by, so they better be good. Unprofessional photos will turn even the best products into crap in the eyes of a customer.
No Cash Flow
It is the money that floats in and out of your business. Yes, business budgets can be pretty limited at first and e-commerce businesses are no exception. But it’s not the quantity that matters, it’s the quality. And it’s not about what you have but how you manage it. By putting too much money in stock and very little in marketing definitely won’t get you all the customers.
The ultimate tip when it comes to cash flow is to plan around the current sales revenue rather than projected ones. One more tip is carefully dividing expense. So, you won’t be required to pay everything at once.
Too Much Competition
Well, the internet is not always a magic land. Despite all its opportunities, it is extremely difficult for evolving startups to compete with established companies in the same niche. The Internet lets the fittest survive and only the best to thrive.
You can fall into a no-win game when trying to sell the same products which larger retailers also offer. Be prepared for Amazon, Walmart, and many other big names to become your enemies. So, what’s the takeaway? Find your niche. It’s not a secret that coming up with something totally unique is a tough task nowadays, but striving for it will only do good.
By no means be afraid of competition! Challenge is hard work and hard work is success. Leadership is the top characteristic you need to have as an entrepreneur. So, you should see every challenge as a new journey that will boost your creativity and take your business to a new level.
Now you see how difficult it is to secure a place in the online world. E-commerce businesses are a tough job but you now learned the tips that will pave your path to success. But be ready that it won’t happen overnight. There is one thing you need alongside hard work – patience. So, take your time, do what you love and do it well!