Around 90% of startups fail—this fact puts fear in e-commerce business owners like us every time we read it. And it’s not too different when it comes to e-commerce, as around 80%–90% of new platforms fail, coming to a success rate of under 20%. Just 2.86% of people visiting e-commerce websites convert into paying customers.
You can learn a lot more from business failure stories than from success stories. This article looks at how to make money from a website and how to avoid the most common mistakes so your business ends up in the top 10–20%.
1. Checkout Is Not Straightforward
Imagine that someone decides to buy a pair of shoes. They have added them to their shopping cart and clicked on “Checkout.” Now, all that’s left is choosing a delivery option and entering the address. No, wait—add a hieroglyph, a 5,000-word essay in APA format, etc. You get the point.
Exaggeration aside, the checkout processes many e-commerce businesses have in place are overly complicated. This issue shouldn’t be neglected, as it’s often cited as the main reason consumers abandon their shopping carts.
Consider using checkout trust signals to prevent customers from dropping out at the last minute. Your platform and brand are new, and consumers can be skeptical of newcomers. You can reassure them by joining forces with well-known payment gateways.
Customers who see secure e-commerce payment gateways feel more confident purchasing from an e-commerce website. Repeat business should be your main goal. You can reach it by giving customers a great experience.
2. Poor Money Management
If you don’t have enough cash flow to fund your e-commerce business, it will soon cease to exist. Business owners are prone to overspending in different phases, including software and marketing. Spending too little and learning from that mistake is better than being left with nothing.
One common mistake is ordering too many products. Excessive stock will take a long time to sell. What’s more, your customers will get angry if your supplier takes too long to fulfill an order and ship the product.
Test a smaller amount of inventory to check the demand for your product and adjust the order. Likewise, see how you work with different suppliers before you commit to one. Order from several and decide which one works best.
3. Bad Marketing Strategies
Considering that about 80% of Internet users have made at least one online purchase, e-commerce companies have to increase their online marketing. Many businesses mistakenly believe that search engine optimization (SEO) is where their whole marketing budget should go. This is particularly true if their industry is competitive and other brands predominate on Google search engine result pages (SERPs).
Start with social media advertising, which may attract customers very quickly, rather than jumping straight into SEO right away, which is usually a very drawn-out procedure that takes months to show results.
For example, suppose you are in a highly competitive niche, such as sports sneakers. In that case, it’ll be impossible to compete for a keyword like “sports sneakers,” as brands like Adidas and Amazon are dominating the SERP. You have to go for a less competitive keyword, start with social media, or do both.
You have to consider what your target audience looks like, what they want and how you can provide for their needs. In this day and age, you have to have a marketing budget. Think about what social media your customers might use. You won’t go wrong with Facebook, which will have 2.9 billion active monthly users in 2024, according to Statista. However, if you are trying to get the engagement of a younger crowd, then Instagram is the answer.
After social media, pay-per-click (PPC) can be your next approach. It is one of the most efficient methods of getting traffic quickly to your website. While SEO is much more effective in the long run, you will have to at least consider PPC advertising at the beginning of your journey. The fact that PPC only requires payment when someone clicks on your advertisements is one of its strongest features.
Additionally, 23% of online sellers’ income comes from affiliate marketing. Google is the source of 43% of e-commerce traffic, with just over a quarter of that coming from Google Adwords.
4. Not Finding a Niche
Products like fitness watches, dog collars, etc., are everywhere, and everyone is trying to sell them. You won’t get anywhere in an oversaturated market. For example, if you niched down into the most advanced fitness watches, you would have a better chance.
Avoid selling products like sneakers, gym apparel, and others with world-known brand-name competitors. Trying to sell something in a niche dominated by Nike is unreasonable.
Researching keywords is one of the best ways to determine how competitive an industry is. You can determine the precise level of market saturation in a certain area using tools such as Semrush.
If you have a passion for a certain niche, try to find the least competitive sub-market for that niche. For example, instead of picking a broad market like shoes, make it more specific, like “leather brogues.” This localization of a market makes it easier for you to advertise while also appearing as a trusted business for people who are simply interested in brogues.
5. Not Keeping Up with Market Trends
Suppose for the moment that you succeeded in every way and have been reaping the rewards of your efforts in the e-commerce industry. Your competition is continuously keeping up with what’s going on in the industry, so your best course of action right now should not be to sit around doing nothing.
Market trends come in waves, and they keep businesses alive, even those that have been struggling. So, it’s wise to keep up with current trends, whether or not your e-commerce website is performing successfully.
For example, recent research suggests that people are now more interested in buying products that align with their values. Gen Zers are put off by businesses that do not respect environmental impacts or get their products from third-world countries via exploitative means.
As a result, it is high time for businesses to become more environmentally friendly and take a moral stance on subjects of exploitation. You can do this by getting your products from the most ethical means and marketing them as such.
Identifying market trends is not the hardest job you will have. You just have to keep up with your competitors, listen to customers, and keep an eye on recent technological wonders.
For example, artificial intelligence has become a big topic of conversion in recent years, and many e-commerce businesses are utilizing this technology to further increase their profit margin. It is another emerging market trend that will provide longevity to many companies.
FAQ
What are the biggest e-commerce challenges in 2024?
- Targeting the right customers
- Cyber security and avoiding e-commerce fraud
- Converting visitors into paying customers
- Meeting customers’ high expectations
- Creating customer loyalty
- Offering high-quality customer service and support
- Competitive prices and shipping
- Avoiding cart abandonment
How can I keep my e-commerce business from failing?
Customers are the key to success in e-commerce. Ignoring their concerns will make them unhappy and harm your sales. Listen to and seek out customer feedback and use it to improve your operations.
Put effort into customer retention, which is pretty easy in online businesses as you already have the leads of people who have previously made a purchase from your store. You can contact them via email, send thank-you letters or let them know about exclusive discounts as a returning customer.
What’s the most important e-commerce survival tip?
In the face of persistent inflation, you need to be flexible. Diversify suppliers and monitor inflation indicators diligently. Moreover, you will need to put more effort into being connected with your customers than in a brick-and-mortar business, as an online business does not provide people with the same intimate experience as physically going to a store.
Final Words
With more and more businesses perfecting the craft of creating perfect e-commerce websites, it is naturally going to be much more competitive to create an online presence that will garner attention. However, as you can see, avoiding some of the more common mistakes can be the most important step to creating a successful website for your business.
