Why Ecommerce Businesses Fail and How to Avoid it!

The ecommerce industry has seen massive growth in the last few years and more and more people and businesses are looking to start selling products online but like any business, failure rates are quite high but why is this?

To answer this question, I am going to explain some of the main reasons why ecommerce businesses fail and give some tips on how you can avoid doing some of these things yourself!

1: Marketing

Probably the biggest reason why ecommerce business fail is their marketing or in many cases lack of!

The simple fact is that if you aren’t getting visitors to your website, then you stand no chance of getting any sales and many ecommerce websites do little to no marketing and just hope that people are magically going to start visiting their site and buy whatever they are selling.

But in the modern world of internet marketing, the build it and they will come mentality simply does not work and if you don’t have a marketing strategy in place, then your site is destined to fail.

Now as each ecommerce business is different, there isn’t a one size fits all approach to digital marketing (which is actually a good thing as everyone would be doing the same thing!) and each site needs to develop their own individual marketing strategy to identify:

  • Who is your target market? If you don’t know who this is, then you can’t tailor your strategy to get your products in front of these people
  • Where is your target market? In order to reach your target market, you need to know where they are going to be online, are they more likely to be on Pinterest over Twitter or Facebook, or is most of your traffic going to come from search engines rather than social media?
  • How are you going to reach them? Possibly the trickiest question to answer but will they be easier to reach by organic searches, building an audience or through paid adverts? This is going to be very much dependent on where your traffic is.
  • Why should they click through to your website? As consumers, we are bombarded with ads and call to actions on a daily basis, so why should the customer click through to your website? what makes you stand out from the crowd?

Answering these questions isn’t going to be particularly easy but if you put in the research, you are going to know how you can put your product in front of the people who are more likely to buy it.

One thing that should also be remembered is that marketing is constantly evolving, audiences move to different platforms and what worked last month or last year might not work today or in the future.

Digital marketing is a specialism within itself and there are individuals and businesses who do this day in and day out and are up to date with what is working and what isn’t working and that is why talking to a digital marketing professional can be very useful as not only can they provide valuable insight but you can also employ their services, which in many cases prove to be a very good investment.

2: The Website

If a site is getting traffic but not getting sales then there is an issue with the sales funnel on the website.

Now I know this sounds very much like marketing jargon but it is true as you are trying to funnel visitors through your site so that they go all the way to the order confirmation page.

This is where detailed analytics come in to play and it very much comes down to the platform being used as to the level of analytics that you get, some are good and some are pretty rubbish and ideally you want to be able to see the following:

  • How many people are visiting your site
  • Where they are coming from (search engines, Facebook etc)
  • What device they are using (desktop, tablet or mobile)
  • Are they checking other pages on your site such as Returns, T&C’s etc
  • How many people go through to the checkout
  • How many people abandon the cart, also preferably where in the cart they abandon it

By seeing all of this information, you can identify where in your funnel the issue is, for example:

  • If people aren’t clicking on the buy button, then there is an issue with your product page and it could be things like:
    • Page is slow to load so they click off and go elsewhere, this can be a big issue with mobile devices
    • Your content such as images and description aren’t selling the product
    • Your site doesn’t instil confidence, lack of SSL, contact info or T&C’s around returns/refunds
  • If people aren’t completing the checkout, then there is an issue with here that could be:
    • Are people able to checkout properly?
    • Are you offering a selection of payment gateways to give people options
    • Are your shipping charges too high?
    • Do you have a discount codes/coupons box on your checkout? If people think they can get a discount, they will go looking for a code and might not come back

This is very much about being a detective and finding out what the problem is, so that you can fix it.

It is always worth going through and checking your checkout every so often to make sure that it is working and optimised so that it makes it as easy as possible to get to the order confirmation page.

3: Service & Reputation

Reputations are a precious thing and once it is gone, it is very difficult to recover and that is why it is important to place service as high priority for your ecommerce business.

When it comes to customer service, it is broken down in to two separate sections:

1: Pre Sale

This where you converse with the customer before they place an order and when it comes to this, you want to:

  • Make it easy to contact you, email, phone, live chat etc
  • Respond quickly, be polite and provide informative and helpful responses
  • Have all relevant information easily available to the customer, such as T&C’s, Shipping and Returns policies. Don’t make them hunt for it.

If a visitor gets good service at this point, they are more likely to become a paying customer as they have built up a level of trust in your business and you have proven to be a good company to deal with.

2: After Sale

This is more important than the pre-sale, because if a customer gets bad service before they buy, they are likely to just walk away and forget about it, where as if they have bad after sale service, they will be inclined to let the world know about it!

As with the pre-sale, you want to make it very easy for your customer to contact you if they have any issues with their order and secondly to that, you want to resolve their issues as quickly and painlessly as possible, such as:

  • If they want to return an item, make the process as easy as possible and explain all the steps and a timeframe if applicable
  • If there item is lost in the post, provide any information you can regarding their order and give a timeline that you will issue a refund if the order does not arrive
  • If the item arrives damaged (even if it isn’t your fault), quickly find a way to resolve it such as arranging for a return of item or issuing a refund if it isn’t worth having it returned

While the customer may not always be right, you still want to make them as happy with the outcome as possible, this way, they are less likely to leave you a negative review online.

Online Reviews

Talking of online reviews, these can be hugely helpful to an ecommerce business as they are a form of social proof that your business is good to deal with, so be polite and ask your customers to leave you a review on:

  • Google
  • Facebook
  • Trustpilot or other dedicated review sites

Obviously, just select one of these as asking for three reviews is a bit much! But this can be very beneficial because people like to do some research on websites that they have never dealt with before, before they place an order.

4: Be Patient & Embrace Failures

Trust me, I know how hard this one is but patience is very often key to success, not only in ecommerce but also in life.

Now I am not saying just sit back and let things happen (as that just doesn’t work) but be patient in the fact that:

  • Not every marketing campaign is going to work and when you are just just getting started, you will get more misses than hits
  • You won’t always stock a winning product, some things just won’t sell and you just need to cut your losses
  • It is a constant learning process and you need to find what works for YOUR business
  • You need to learn what YOUR strengths and weaknesses are
  • When learning about different things, you need to sift through a lot of the rubbish that is online to find the true gems of info that are out there
  • This one I can’t stress enough Ecommerce isn’t a get rich quick scheme!

It can be extremely frustrating at times as business owners, we want to hit a home run every second of every day but it simply doesn’t work that way but every mistake and failure is a learning opportunity so embrace that and you will find the process a whole lot easier than beating yourself up about them!

Conclusion

As you can see, ecommerce businesses can fail for a whole host of reasons and there are many more reasons than I mentioned in this post and this is because every business is different.

But by knowing some of the pitfalls of running an ecommerce business, you can set yourself up in a better position for success, especially if your competition are falling into these traps!