5 Reasons Why E-Commerce Businesses Fail

- Pooja Singh

August 21, 2021

5 Reasons why your E-commerce Business Fails

It might be your first time with e-commerce? There might be many chances where you will be likely to make many errors. There’s no need to get scared!! Just go through this and get to all those reasons that might be the cause of your defeat!!

Let us have a brief look at the contemporary e-commerce scenario.

2021 has witnessed superabundance of online businesses. The most straightforward reason for this is the shift in consumer behavior from offline to online. The scenario that begun with buying books and clothes online, it has now expanded to buying groceries, stationeries, daily supplies, and whatnot.

In a nutshell, the e-commerce business has definitely blown up in no time. From small local companies to start-ups to designer/luxury brands, everything is online. This pretty much sums up that starting an online business is not that hustle after all.

But did you even know that 22% of the e-commerce business fails during the first year? Were you expecting these stats? We are sure not! But it is what it is.

Let us tell you that starting an e-commerce business is pretty simple. You got to buy a domain name, buy hosting, build up a website, list your products, enter some payment gateways, and voila, done.

But, retaining that business is a tough deal.

Think of it this way. You came up with an idea, launched your business, worked well for a few days, and then everything stopped. It happens to a lot of companies.

Have a look at the top 5 reasons as to why e-commerce business fails.

1. Product Failure leads to Business Failure

Let us start with the very first reason why any e-commerce business fails. It is because of selling the wrong or non-needed products. No matter how excellent your product/service is, it is a waste if no one wants it. You need to be sure that the products you have decided to sell are actually required or meet the criteria of the present trend.

Let's say you are selling antiques on your website, and many others are just doing the same. You still have a chance to stand out and attract customers. But your value proposition must be correct. If you are selling antiques that no one is interested in, your e-commerce business will eventually fail.

The best solution for this is to start with finding out whether your product/service has a market or not. Once you know that there is a target audience possible for your products, you can go ahead.

You must know what you are selling, to whom you are selling, and why.

P.S - Poor management of feedback can also lead to product failure. Read to know more.

2. No marketing plan to bring customers

Expecting people to find you from nowhere without any marketing strategy is an unrealistic expectation!

Having no marketing plans for your e-commerce business means having no sales at all. Marketing is all about promoting your products/services and attracting customers. If your e-commerce business doesn't have any marketing strategy, how are people supposed to find you?

This is what differentiates an online business from an offline one. An offline business might not require as strategically planned out marketing techniques as the online ones. It is because an offline business has a physical identity that people can find out. It isn't possible with the online business. Moreover, there are millions of e-commerce businesses around the world. It massively decreases your chances of organic growth.

Investing in marketing for an e-commerce business is a must because that brings sales. This is how money flows in the industry. It’s high time to start with an effective marketing plan.

Don’t worry if your marketing strategies fail. Bounce back with a better one. Also, read some epic marketing mistakes ever done

3. No Investments

By investments, we mean all kinds of investments. The very first investment to make in an e-commerce business is hosting investment, domain investment, website investment, developer investment, designer investment, photography investment, content investment, and marketing investment.

Every e-commerce business owner must know the places to invest. They must plan out the investment with the ROI ratio. This way, they will know where their assets are going and what returns they have acquired through those investments.

Learn how to invest in your business.

4. Don't know how to stand out

Did you know that there are over 20 million e-commerce websites in the world? There would be lakhs of websites of your niche. The question is how you would distinguish yourself from others?

On top of this, various e-commerce giants are nationally or globally famous. So, bringing those customers to your e-commerce platform is a laborious task. The e-commerce business owners do not know how to stand out in such a tough competition.

Until and unless the e-commerce business owners find out how to stand out, they are sure to fail

A tip to remember here is that you must believe that you have a USP. The only thing you need to do is bring it out and market it right.

With personalization, you can stand out. Check out how.

5. User (Un)friendly Website is a ''turn-off.''

Let us explain this with your personal experience. You must have visited a lot of e-commerce websites. What makes you stick to it? You might say the products, the collection, etc. But, one major thing that keeps you active on that website is its user-friendliness.

A seamless website that takes you from one page to another in seconds, to the checkout page with no hassle, helps you enter the promotion codes within a blink of an eye, is a website you love scrolling. It is a website that masters a good user experience.

A website that takes enough time to load, is not seamless, that doesn't give you a good experience would propel you to leave within regardless of how great the products are. If your experience on the website is a failure, then that e-commerce business is a failure.

Hence, a website that gives a good user experience is a must. An experienced developer would help you with that as it needs some technical aspects to set it up.

The pictures should be of the right size, the website loading time should be less, and every action should be faster.

Here are some steps to help you make your website more user friendly

Starting up an e-commerce business is not easy. It looks all fun and fancy from the other's plate, but requires a lot of backend work. As an entrepreneur or e-commerce business owner, you will have to work on your website and business as a whole every single day. Try to implement all of these in your business strategy. We assure you that your e-commerce business won't fail for sure. Do let us know if we were of any help.