6 Reasons Why Your E-commerce Business Will Fail

August 28, 2013 Blogging Guide

Having your own e-commerce website gives you certain freedoms you won’t find on a selling platform like eBay and Amazon. Less direct competition (and resulting race to the bottom in regards to price wars), no complicated fee structure, no change in terms and conditions that sees your best seller banished from being sold because of some inexplicable rule change.

You have the freedom to do as you please on your site, but that also means you have the freedom to get it so very wrong.  Let’s look at six common problems that can cause an e-commerce business to fail:-

1. Selling Commodity Products

This is the most common problem I’ve come across.  Commodity products are items that are commonly available from many vendors and aren’t distinguishable by vendor – other than by the price they sell the item at.  If you sell such items, you’re facing two huge problems:-

• an enormous amount of competition
• being engaged (like it or not) in a price war

Why do sellers opt to sell such items? Because these products are often in huge demand.  That’s great, but if you don’t carefully study the supply side of the equation, you’ll soon discover what anonymity feels like.

Moreover, the bigger competitors can happily sell at a loss if it means shoppers will buy more profitable items from them.  How can you compete on price with companies that are happy to make a loss? Often, you can’t, unless you have some other means of differentiation up your sleeve?

What’s The Solution?

Provide a niche product or service.  Ensure you CAN differentiate yourself from your competition somehow. Services offer a myriad of opportunities to stand-out; products less-so… Unless you can offer customisations to products, or attach a service to the product you provide.

2. Lack of Basic Information on the Website

A buyer needs to trust a seller before a decision to purchase is made.  On your e-commerce website, you have to give reasons why any buyer would trust you.

• Not publishing delivery times
• No returns policy
• Lack of basic terms and conditions
• No contact address or even a phone number
• No company history or “about” page
• No payment information

These are all common mistakes that I see all the time and they are all barriers to making sales… In fact, such omissions of information are signs that perhaps this vendor should NOT be trusted.

If buyers don’t even know who you are, where you are, what your basic delivery / returns policies are, how they can pay for their items, they’re very unlikely to buy anything from you, and for a brand new e-commerce business, losing those few vital sales can spell disaster.

What’s The Solution?

Simple: Publish your delivery and returns information.  Publish your terms and conditions in plain English, and make them as short as possible.  Publish a physical address and phone number.  An FAQ is a good idea too.

3. Forcing Me to Register / Checkout Woes

When you buy something in a high street shop, you don’t need to register or sign-up to anything.

So why force your customers to register when they buy something online?

Don’t put a wall in front of your customer just at the point that they are about to give you their money.

If creating an account is really essential (and it almost certainly isn’t!) then wait until the end of the payment process – You will be given enough information from the shopper to create accounts for them as they make their purchase.

Also, don’t ask for fax numbers, or how they found your site, or anything else extraneous to the purchase.  As a shopper, all they want to do is buy your item as quickly as possible.

What’s The Solution?

You’ll likely need to consult with your website developer, but if your checkout process is onerous and demands shoppers to register, see if there are options to remove such barriers.

Studies often show that the best checkout processes are the ones which break up the process into easy steps so that you don’t put your customer off with extra questions. Start with a name, email and postcode if you can and then fill in the address on the next page and payment on the next.

Whatever you do, just don’t needlessly complicate things!

4. Lack of Activity on the Website

A lot of websites give off the appearance of the Mary Celeste – the lights are on, but is anyone home? These sites have that uncanny appearance – the latest blog entry was made three years ago.

What catastrophic event happened to stop the site owner?
Why are there no signs of life since then?

Not so much catastrophe, more lethargy.  Many sites wither on the vine through lack of motivation, belief, effort or a combination of all three.   A vicious cycle ensues – the site looks dead, so people don’t buy.  People don’t buy, so I’m not updating my site.

What’s The Solution?

Update your site regularly!  Be bothered!

• Publish reviews / testimonials from happy customers
• Post case studies of what you’ve done
• Upload photos of events you’ve been to
• Blog about news associated with your niche
• Put on daily deals for your products

Healthy signs of life are a big, positive trust signal for shoppers.

5. Getting Your Marketing Approach Wrong

…and not focusing enough on improving your product or a service…

A successful business is one which secures a lot of new work through word of mouth, reputation and repeat business from existing clients. This usually happens when a business focuses on improving their product / service they provide.  The pursuit of excellence.

They’re putting their faith in the very product / service they provide to sell itself!

Of course, you need a solid marketing strategy, but over-relying on finding customers without also improving your offering and keeping your existing customers is a huge mistake.  While you may gain in the short-term, you’ll find your competitors offering much better products / services as time goes by.

What’s The Solution?

See improvements to your product / service as a great investment of time.  Remember that word of mouth marketing and repeat business involves no marketing spend whatsoever. Repeat custom can make unprofitable advertising become profitable.

6. You’ve Got Technical Issues

Does your e-commerce site have a responsive design so that it’s easy to browse on a small screen? Is it search engine friendly? Is it navigable without using a mouse? Can every page be accessed by a search engine spider? How quickly do your pages load?

There are many technical issues that can arise when selling online – therefore your website developer will have a significant influence on the failure of your online business (sadly).

What’s The Solution?

Research thoroughly the website development companies you short-list.  If you know anyone who’s selling online successfully, find out who their website developer is.  A good website developer certainly doesn’t guarantee success, but a bad developer will almost certainly guarantee failure.

Additionally, research your target audience and know what you need from your website. Don’t make assumptions; instead try to learn whether your website needs to be accessible on different devices or for different types of people.

Featured images:

•  License: Creative Commons image source

About The Author
Hi there, my name is Adam. I am an SEO and digital marketer. I love working online and writing about e-businesses. I work at Digivate, we are a digital marketing agency. What to learn more? Check us out here.