You would have heard the saying, “First steps are the most difficult.” But, that’s not true with ecommerce businesses. Today, with plenty of off-the-shelf ecommerce store setup software and affordable ecommerce website design companies, starting an online store is quite easy – and you can even get started on selling your products within a few days.
But, the most challenging part is – converting your ecommerce startup into a successful and profitable business. Recent industry reports state eight out ten ecommerce stores get abandoned within 24 months of operation.Other researchers peg the number even higher, stating 97% of all ecommerce businesses don’t make a profit. That’s a shocking lot.
So, what’s going wrong? Why do the majority of ecommerce businesses fail, especially when they have a passionate founder or team behind it? Here, in this post, we dive into a deep analysis of the top reasons why ecommerce businesses fail and how to provide a solution for the most common causes of failure.
You’ve got a great product, and you’ve spent a lot of time designing it or sourcing it from the best of suppliers. You’ve done your market research, and you know that there is a demand for the product.
But, then your product listing on your site is a few poor grainy photos with a poorly written copy. If your product listing looks like something that you would see on eBay, then it’s time to get it updated. Poor quality product images and badly written content not only prevent sales but can seriously make a subpar impression on your product and devalue your brand.
How to Solve It?
If you’re interested in product photography, then start by investing in the right photography gear and learn a few tips and tricks to click pictures in the best light. Provide multiple views of your product and include detailed descriptions. Don’t use generic descriptions, instead describe your product from the perspective of the customer – what they would like to know about the product, etc. If photography isn’t your groove, you can hire professional photographers to get the job done or get the help of professional woocommerce development services, to help you set up your product listing and the rest of your ecommerce store.
Don’t rely solely on price to pull in customers. Instead, entice them by highlighting the best features of your product. Showcase your products in the best way possible.
While this may seem like a minor issue, not displaying your full contact information prominently on your site or burying it deep in the corner of the site, prevents customers from trusting you. When a new customer arrives on your site, he/she will look for information about your brand – like where you are based from, the story behind your brand, etc. Customers choose brands that are easy to contact since they can contact you quickly if something goes wrong.
How to Solve It?
Make sure to display your complete contact information – email ID, phone numbers, address, social media pages to build the trust of your potential customers.
Lack of tracking and monitoring the financials will kill any business quickly. Let’s illustrate this point with an example. Ecomom was one of the early ecommerce companies that were started in 2007. The company had a solid product line – natural and eco-friendly products from expecting and new moms, as well as natural baby food, toys, and clothing.
The idea was a good one, and the company had a growing consumer base, thanks to the increase in the demand for natural and chemical-free baby products. But, then the company went bankrupt in 2013, just six years after launch.
So what went wrong?
Jody Sherman, the Founder of Ecomom, was, in fact, able to obtain a massive $1 million as funding for his online business. But, the biggest problem was Jody was an entrepreneur and not an accountant. He failed to hire the right financial team for his startup. While it looked like revenues were growing, the company was actually losing money, failing to get returns on their investments. Driven by his losses, Jody committed suicide in 2013 and the business folded.
Not to scare you, but the lesson is stark clear – you need the right accounting or financial team to help you stay on track. If you don’t have the funds to hire a professional accountant, take some time, and learn the basics of business accounting. Understand where your money is coming from and where it’s going, thereby avoiding financial mishaps down the line.
No one loves to do more than the basic minimum, especially when shopping online. Amazon revolutionized online shopping when they put away the complicated checkout of the last decade and moved to single click purchases.
If you have a complex, multi-step checkout process, then it’s high time you change the design. Hire a Magento web developer to help you refine and redesign the checkout process. Don’t make it compulsory for customers to register or sign into their account, before they can complete the process. Instead, give the customers the option and let them decide if they want to sign in before they complete the purchase. If not, let them check out as a guest, without having to create yet another registration account.
No matter your business model, or the types of products you sell, you cannot expect to taste success with a poor performing website. Your website is the shop front for your online business. Irrespective of the other channels you use to sell your products, your website is the cornerstone of your entire ecommerce business, and it needs to reflect that.
While designing a website, you need to ensure that it is functional, responsive, updated, and offers the best user experience. An easy-to-use website not only improves conversion rates but also ranks higher on Google. Look for simple, clutter-free layouts.
And don’t forget the mobile user experience. Mobile ecommerce sales have been steadily increasing over the years, and by 2021, 1 out of 2 ecommerce sales will happen on mobile. Let’s say; you have a potential customer who comes across your site on their home desktop. The customer then gets reminded of your site, while on the move and decides to complete a purchase from his/her mobile device. If your site isn’t optimized for mobile or offers a sub-par experience, you not only lose the sales, but the customer is never likely to return to your site.
There’s no excuse to offer a poor mobile experience in 2019. Understand the nuts and bolts of good mobile user experience, and hire a competent ecommerce website design company to get your online store optimized for all mobile devices. Apart from a mobile website, you can also invest in a mobile shopping app, if needed. However, remember that you need to provide customers with good experience on the app as well. So, ensure that it’s robustly tested and don’t make it an afterthought.
Once you have refined your website, mobile website, and mobile shopping app, take the time to test every nook and cranny. Load it from different mobile devices, browsers, check how it appears on tablets, laptops, etc., try differing web speeds and more. Ensure that your online experience is seamless across devices to provide existing and potential customers with the best experience.
This is a huge drawback. One of the main reasons for cart abandonment is hidden fees. 61% of customers abandon a cart a cart when they are presented with an extra cost at the end, like shipping fees. To avoid this, make sure to share your shipping costs with the customer upfront. You can also turn it to your advantage by letting customers know that they can avoid shipping costs when they shop beyond a particular amount.
You can also provide customers with shipping costs calculator to know how much they will have to pay beforehand.
Let’s say you open a café in a remote corner of your city, and not advertise it. Apart from the handful of walk-ins, you will not have any customers. The same applies to online stores.
You may have the best products on the market, excellent customer service, and a seamless web store, but without targeted marketing, you will not be able to reach your sales targets. This is where digital marketing comes into the picture.
Start by creating a robust online marketing plan. Identify your goals, and then work on how to achieve them. If possible, hire a dedicated digital marketing team to help you across channels – social media, email marketing, paid ads, organic SEO, and more.
There’s no doubt that ecommerce is a great way of launching your business, with minimal overhead. However, it requires work, effort, and planning. Make sure to avoid the fatal mistakes listed above, and succeed in your ecommerce venture. Focus on sustainability and growth, rather than on short-term goals. Do your research and build an outstanding online business that continues to pull in customers and generate sales, in the long-term