As per a report by Grand View Research, the global e-commerce market will be valued at over $27 trillion by 2027. This shows that the e-commerce industry is growing rapidly. However, the industry is also filled with challenges. There are plenty of reasons why so many e-commerce businesses fail, but there are also ways to avoid these pitfalls and build a successful business.
In this article, we’ll discuss some common mistakes that new e-commerce businesses make which eventually lead to their failure.
#1 Poor Website and Mobile App
If you want to sell online, you need a good website and mobile app.
Your website is the first impression that people will have of your brand, so it must be professional and aesthetically pleasing. It should also be easy to navigate, with all of the information about your business clearly laid out for visitors.
WebFX’s insights suggest that it will cost you $12,000 to $150,000 to build a website in 2022. The costs will vary depending on the features you want on your site. Additional security measures and website maintenance will also add to this cost and will usually require you to make these spendings yearly.
Your mobile app should have the same look and feel as your website so that people who visit you via their phone or tablet can get the same experience they would on a computer.
Compared to websites, app development will cost a lot more, as per insights provided by SPD Load. An app will cost you around $40,000 to $300,000 to develop. The reason behind this high cost is that app development requires developers to build apps for at least two operating systems (Android and iOS). At the same time, given the wide range of mobile devices available, apps require more testing and prototyping since they need to be able to work the same across all those devices.
If they can’t use your website or app easily or if they don’t like what they see, they’ll probably go somewhere else, and it’ll take forever to get them back again.
#2 Poor Supply Chain Management
One of the reasons why so many e-commerce businesses fail is poor supply chain management. The supply chain is a set of activities that companies use to get their products from the manufacturer to the consumer. It includes things like manufacturing, packaging, shipping, and warehousing. If you’re not managing your supply chain well, then it’s likely that your customers will have a bad experience with your business.
When businesses don’t manage their supply chains correctly, they often run into issues with customer satisfaction and brand loyalty. For example, if an e-commerce company doesn’t use good packaging materials or doesn’t ship its products fast enough, it may end up disappointing its customers or losing them altogether.
#3 Inability to Predict Customer Demand
One of the most common reasons why e-commerce businesses fail is because they can’t predict customer demand. This means that they’re not able to anticipate how many products they’ll need to stock, or how many orders they should expect in a given period.
Understanding the demand forecast is vital when you’re running a business in the e-commerce industry. When you don’t know how much inventory you should have on hand or when you don’t know how many orders you can expect, it’s hard to make smart business decisions about which products and suppliers to prioritize. By knowing future demand, you can tackle customer expectations.
Supply chain management also plays a vital role here, through forecasting demand and keeping the sales forecast and supply in mind. You can ensure a steady flow of products for your customers.
#4 Poor Customer Service
One of the most important things for any business, but especially e-commerce, is to provide excellent customer service.
If you want to find success in your business, you have to give your customers what they want and need. This means that you need to be able to speak with them directly, whether it’s through email or phone calls. It also means being available at all times so that you can answer questions and address concerns as soon as they arise.
Your customers need to know that if something goes wrong with their purchase, whether it’s a broken item or a shipping issue, someone will be there to help them figure out what went wrong and how to fix it.
#5 Not Using the Right Marketing Channels
Using the right marketing channel is one of the biggest factors in determining how successful a business will be. There are many different channels that you can use to market your e-commerce business, but if you don’t know which ones are best for you and your customers, then you won’t be able to reach them effectively.
When choosing a marketing channel for your business, it’s important to consider what kind of customers you have and where they spend their time online. For example, if you have young customers who spend a lot of time on social media sites like Facebook or Twitter, those platforms would be good places for you to advertise. However, if most of your customers are older individuals who aren’t very active on social media sites, then those platforms might not be as effective for reaching them.
Avoiding these mistakes can help you avoid failures and grow your e-commerce business. You’re also more likely to succeed as long as you can avoid these things.