6 Reasons Why E-Commerce Businesses Fail
As an entrepreneur, one of the most appealing business models is e-commerce. These days, online shopping has become the norm, meaning that there is high demand from consumers. However, because starting an e-commerce company is relatively easy and cost-efficient, the competition is fierce.
Unfortunately, if you’re not prepared for this industry, you will face brutal failure, and you could lose a lot of money. To help prevent that from happening, we’re going to look at the top reasons why so many e-commerce businesses fail. Avoid these mistakes, and you’ll be a lot better off.
1. Lack of Quality Content
Since your customers can’t browse through aisles or look at items physically, you need to recreate the shopping experience as much as possible. All too often, online retailers figure that one or two pictures are enough to illustrate the look and feel of a product.
In this case, however, more is better. When it comes to e-commerce content, here are a few tips to ensure that your products look good enough to buy.
- Simple Backgrounds – use a white or black sheet to highlight the item’s colors and appearance
- Focus on Context – don’t just show the product itself, show people using and enjoying it. Another way of saying this is “don’t sell the steak, sell the sizzle.”
- Write Descriptive Copy – use words that evoke emotions. Instead of warm, it’s cozy – instead of delicious, it’s a rush of flavor in your mouth. Also, try to tell a story with your descriptions to illustrate the value of the product.
2. Lack of Customer Support
One of the best reasons to shop in a brick and mortar store is that you can always ask an associate for help. Whether it’s an item out-of-stock, a query about what comes with the product, or anything else, customers will always have questions. However, if you’re nowhere to be found, they will simply go to another website.
Ideally, you’ll have a variety of customer support options, including live chat, email, and phone. However, if you’re a small business, email and phone are a must. You can dictate the hours of operation, but you need to be available regularly.
3. Lack of a Streamlined Website
One of the problems with online shopping is that it’s too easy to get lost in product pages. When building your site, you need to make sure that customers always know where to go to get what they want. Have clear and easy to read buttons and labels. Allow customers to return to the home page quickly. Show how many items are in their cart. The simpler the shopping process is, the more likely that people will buy from you. If the website is too confusing, most users will shop elsewhere.
Another element of streamlining your website is to use keywords and consistency. URLs, product names, meta-tags – everything should have the same (or similar) keywords so that customers don’t get confused. It’s a simple thing to do, but many online retailers don’t take the time to do it properly.
4. Lack of a Simple Checkout
Cart abandonment is a real problem for e-commerce businesses. You think that a customer is ready to buy, items locked and loaded, and then he or she leaves the site, never to return. While there are a few reasons for that (we’ll discuss more in the next sections), a complicated checkout is one of them.
Limit the checkout process to as few pages as possible. If you can, try to get it all on one page. Yes, you need to get a lot of information from a customer (contact details, mailing address, etc.), but you don’t have to make it an ordeal. Here are a few tips.
- Utilize Google Autofill – Google already has the information for millions of users. Let it help them fill out forms faster.
- Show Progress – let customers know where they are in the checkout and how many pages are left.
- Allow Saved Data – enable repeat buyers to save their info for future purchases, making checkout even faster next time.
5. Lack of Upfront Fees and Costs
While complicated checkout processes can lead to cart abandonment, the number one issue is unexpected fees. If you’re going to charge for shipping and handling, you need to be upfront about it. The vast majority of customers will bounce at the sight of anything fishy. Nothing is fishier than an undisclosed fee.
6. Lack of Strong Marketing
Finally, if you don’t market your e-commerce business correctly, how can you expect to succeed? As we mentioned, the competition in this industry is fierce. Not only do you have to compete against other entrepreneurs, but major retailers like Amazon and Target. Here are a few tips to ensure that your marketing is on point.
- Utilize SEO – we already touched on keywords, but they can go a long way toward driving traffic from web searches.
- Find Your Niche – don’t try to sell everything; Amazon already does that. Instead, focus on a particular niche, like fishing enthusiasts or single moms.
- Demonstrate Value – why should customers buy from you instead of a competitor? Lower prices? Less hassle? Free returns? Find your value and promote it vigorously.
Bottom Line: Understand This Industry
Overall, the primary reason why e-commerce businesses fail is that they don’t take the time and effort to know what to expect. All too often, shop owners believe that simply building a website is all it takes to rake in money. Starting an e-commerce company requires the same level of investment and energy as any other business. Thinking otherwise can be your downfall.