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9 out of 10 eCommerce failures happen because …

By: Taru M. Taru M.
23 Jun, 2022

Why do eCommerce startups fail? To answer this question, you should know what it actually is- Electronic commerce is referred to as buying or selling of goods, services and all the commercial transactions that take place electronically on the internet.

Pff.. now you’ll say, “it’s so obvious as I already knew it.” Success and failure are always there. The eCommerce failures rate needs to be understood in detail. It is like looking at an iceberg without going into the ocean. In this blog, you’ll see how.

As we all know that the main types of online business are:

  • Business-to-business [B2B]
  • Business-to-consumer [B2C]
  • Consumer-to-consumer
  • Consumer-to-business

But what we know less about is that research shows that around 90% of new startups lead to failure. The eCommerce marketplace is not far away. One needs to understand that the eCommerce success rate might be less but not impossible.

It might give you second thoughts about your E-commerce startup, but don’t you worry! To be honest, learning from others’ mistakes is the key to success. Looking at the reasons for failure and not repeating what they did wrong is a wise enough reason to keep going rather than not trying to improve due to fear of failure.

Why B2B Ecommerce fails?

It is said that only around 10% of B2B initiatives accomplish their goals. Surprising? Here are a few points squeezed out of 90% of B2B failures-

  • Neglecting or forgetting to use customer-specific costing can lead to a poor online marketing strategy. Read more about the best eCommerce marketing strategies you can follow to grow more sales in your store. Different products, same work!
  • Customers with highly tight delivery schedules can create obstacles to the flow of your online business. The eCommerce business does not favor promoting multiple product brands in the name of one parent company.
  • Customer relationship management. Your online retail store should respect all online shoppers equally and be helpful to them, just like any physical store.
  • Branching into B2C and in the meanwhile, ignoring conflicts related to multi-channel sales.
  • Not having a pleasing online marketing strategy for your eCommerce business.
  • Having negligible online search visibility. Your online visibility is exactly what is going to acquire customers for you.
  • Not testing your product thoroughly also falls under poor online marketing.
  • Time management and working fatigue-If you are not happy selling it, they are not happy buying it.

Why does B2C eCommerce fail?

Poor publicity– social media is the voice of your E-commerce service. All kinds of consumers are always willing to share products or E-commerce services they like with their friends and family. By working on your strategies, you will want to sync your product offering nicely with social media.

Lack of trust– winning consumer trust needs to be your priority. Lack of authentication can push your users away. Quick and easy access to limited and significant information will help the user to stay. Unlike a physical store, you cannot communicate with the shopper over here.

Negative web user experience– Any successful online business got there through the ratings on mobile devices. The experiences of users vary with the generations. A user experience rated by Generation X as the best online store might be called substandard by Generation Y, and possibly be poor for a Generation Z shopper so you cannot say that your website is user-friendly throughout. No way!

Inconsistency in devices– Screens! One of the main reasons why consumers abandon their carts is nothing but the inconsistency between the big screen and the small screen. Your eCommerce website and apps should not fail to demonstrate the same things to all eyes.

Unavailability of marketing resources– In case you cannot tap into E-commerce digital resources, the least you can do is know about it. Arrange many tools and a handful of e-resources well beforehand.

Dry checkout process– Another main reason for shopping cart abandonment is the tedious checkout process. Long and complicated steps to checkout can frustrate your shopper away.

Upfront sign-up– Don’t compel your customer to sign up even before having a sneak peek of your online store. Have patience and think with multiple points of view.

Our eCommerce web development company is well aware of social worth, screen consistencies, and many more. Complement with this comprehensive A to Z guide on eCommerce Website Development.

More reasons for eCommerce failures

Pricing & Ads alignment– social media is the voice of your service. All expectations of your shoppers need to be managed.

The fact is that hidden costs play a huge role in shopping cart abandonment. Ensuring that what your consumer sees and gets is crucial, so don’t hide any unexpected fees until the last minute. It will also kill the urge of the customer to visit your store next time.

The same goes for pseudo ads as well! You will trigger all your hard work if you send the consumer to an offer or a landing page that’s not aligned with the ad they clicked. This way, you are just playing around with your customers’ trust.

Return policy– unclear return policy threatens customers even if they are 100% sure what to buy. Not having an understandable product return process will make your E-commerce business look non-credible.

You cannot expect a shopper to buy from someone who does not mention correct information regarding their return policy.

Having clear and easy pickups and refunds can help you attract your audience and keep them engaged with the mental satisfaction of being able to send back an item they don’t like.

Financial Management– Any E-commerce business or, in fact, any business that involves money. Apart from making sure at the beginning that you have the right amount of cash in your pockets, you must also spend it wisely. Cash flow management is more about overspending & underspending, not how big the amount is with which you started your online business.

To sum up: Taking out the common and topmost reason for eCommerce failure isn’t cash but poor online marketing process.

You have done product and customer research and invested in the latest technologies, best platforms, developers, and designers to build a product your customers are waiting for. But your target audience is unaware of this perfect solution designed by your fabulous team. That’s why you need to boost your ways of online marketing. Your plan should include paid, owned, and earned media and comprise useful and relevant content

According to a survey by MarketingSignals, the most common reasons for their new eCommerce business failure were either poor digital marketing and search engine visibility or lack of funds.

If you ever start to wonder that any of these factors is/are swooping in from outside into your online shops, then your startup ain’t too far away from crashing!

The lowest percentage of online retailers are unsuccessful in eCommerce due to mistiming product launches or inappropriate products.

Solving challenges for E-commerce marketplaces

To resolve this issue, just knowing your mistakes won’t lead you anywhere nice. It is much wiser to be aware of how learning from others’ mistakes can help you excel efficiently in your e-business.

Fortunately, using a strategic approach of a multi-vendor marketplace will minimize technical expenses, and this will donate a platform to develop eCommerce businesses owned by eCommerce companies. As opposed to custom builds, multi-vendor business plans need less time and energy, thus allowing an operator to outpost logistics to the platform’s technical support. Make sticky notes of below eight points and ensure you work on them to not land up in the 90% cateogry.

1. Set the Right Goals, cash flow & timelines

2. Prepare a practical Budget.

3. Consider every user’s unique journey.

4. Do not muddle up B2B & B2C

5. Appreciate the Complexities of B2B.

6. Understand Critical Integration Requirements

7. Choose the right partner for your business

8. Build a marketing strategy before launch.

Are you looking for an eCommerce development company ? Check out our services, and feel free to connect with us!

Taru M. Author
Taru M.

For over 18 years, Taru M. is a successful technology entrepreneur by profession and a tech enthusiast by spirit. She takes pride in offering expertise in her domain to business people's success across the globe. As a business woman and technology expert, she manages to keep her balance along with her family responsibilities. She did her masters in computers, and her work delivery shows the expertise of her education. Connect with her via Linkedin profile to know more about her exciting personality

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