10 Reasons eCommerce Websites Fail

10 Reasons eCommerce Websites Fail

It seems another ecommerce website is being setup every second and every new business always believe that their business model is totally unique.  The reality is that most of these websites will fail because the owners lack the knowledge and experience to make them successful.

Whilst every business may sell something different these are the top ten reasons why ecommerce websites fail.

1) No Money Pumped into the business

It may seem a no brainer but doing business online is no different than doing business off-line.  Many customers think that they can spend a few thousand dollars on website and that’s the end of the investment.

Wrong!

A good website will cost more than just the upfront costs, if you want to do this correctly you need:

  • Excellent Website Design
  • Excellent Product Images
  • Excellent Product Descriptions
  • Ongoing Advertising Budget
  • Ongoing SEO Budget
  • Ongoing Design Budget for Banners and website changes
  • Bandwidth costs for when you get busy
  • Hosting Costs for servers
  • Transaction Costs

Then biggest pitfall we see are customers who already have a bricks and mortar store and have spent hundreds of thousands on the store but have a total budget including marketing the website of less then $10,000.

Even worse some people think they can build it themselves with a free web service and then become disappointed with their results, all because they failed to invest in their online store.

So when starting out or upgrading you need to have a realistic budget not just for the upfront costs but the ongoing costs as well.

2) No Patience

A business takes time to grow especially online.  You can’t expect to launch your store and become an overnight success in a month.  The reality of people who are “overnight success stories” is that they have been slowly building their business for years.

If you are an impatient person to begin with, running an online business is going to frustrate you even more.

More people throw it all away because they are too impatient to let the business grow.

3) No Plan

It’s the fundamental problem with most small businesses online and offline that fail,

They have no plan in place!

Like any business you need a solid plan in place for every aspect of your business, in an ecommerce website you need

4) No website Visitors

For a website to make sales you need visitors to your site and you need to market the site.  The most common marketing techniques are:

  • SEO
  • Google Adwords
  • Facebook / Social Media

At the end of the day any tool or technique that brings the right customers to you website cost effectively is good!

5) A Bad Website

If your website does not work, has broken images or is hard to use customers will not buy from you! They will do a Google Search and go to another website that is easier to use.

6) Bad Product Photos

A recent study suggested that high quality product images can add up to extra 2% sales conversion rate!

People buy products by seeing what they look lick, if the product images are not up to scratch then it’s almost as if you are saying your product are not up to scratch.

Product images should be:

  • High quality
  • Standard sizes across your website
  • The same aspect ratio
  • Not copied from somewhere else

It’s ok to take the pictures yourself just make sure they are properly touched up afterwards so they look professional.

7) No Cash Flow

Businesses take money and that’s especially true in ecommerce where you need to spending money to make money. Advertising costs money and Google Adwords, remarketing, SEO, Content all need cash to do.

Make sure your budgets have enough cash flow in them to run the business properly.

8) Poor Stock Management

No one wants to wait for their order for weeks and weeks and weeks, make sure if the item is not in stock it can’t be ordered or have a note to say when it will be back available.

If you do your own Pick and Pack it’s easy to manage your stock control, if you use a Drop Shipper or direct from the manufacture model make sure you understand every day where your stock levels are.

9) Too much Competition

You can succeed in a crowded market but more often than not at some point if there is too much competition in the market the cost to acquire the customer base and market share may be more than the potential profits.

Even so to succeed in a competitive market you need to differentiate yourself from the other retailers.

10) No Differentiator

Imagine two stores that both sell the same product in a shopping centre side by side.  Unless they differentiate themselves it’s hard to know which to buy from.  There are many differentiation points such as add-ons, customer service, sometimes money or other extra value adds.

Many businesses fail because they do not properly differentiate themselves.