The global e-commerce market was valued at over $13 trillion as of 2021. By 2027, experts predict that value to cross $55 trillion. By then, worldwide retail e-commerce sales will cross $8 trillion, which was around $5 trillion in 2021.
The e-commerce business, as it seems, is a profitable one. However, it’s still risky to be part of this industry. Almost 80%-90% of e-commerce businesses fail to succeed. Research suggests that almost 90% of such businesses fail within the first four months of starting operations.
So, what causes these businesses to fail, and how can you, as part of the e-commerce industry, avoid such failure?
Poor Online Marketing
Research shows that 37% of e-commerce businesses fail because of poor online marketing. These businesses fail to identify the need for such a marketing strategy or fail to efficiently put their resources into use and come up with a successful one.
If you want your e-commerce business to succeed, you need to make sure that your online marketing efforts are grounded in a solid strategy that is tailored toward your target audience’s preferences and needs. You also need to make sure that you’re spending enough money on these efforts so that you can get results. If those results aren’t there after a certain period, you must reevaluate your online marketing strategy.
Social media and influencer marketing are both effective ways to promote an e-commerce business. At the same time, you have to ensure proper SEO practices for your platform. Without SEO, your search rankings will fall, and people on the Internet looking for e-commerce services will rarely come across your platform. So, even if you have the products they need, they’ll never come to know of it if you don’t advertise and ensure SEO accordingly.
Not Using a Proper Delivery System
A poor delivery system will lead to dire consequences for your e-commerce business. The delivery system is often considered the heart of an e-commerce platform. After all, what good will marketing and having a ton of products do if they don’t reach the customers in time and in proper condition?
Customers must receive their products on time and in perfect condition. They must also be able to track their deliveries and be allowed to return the product if it’s faulty. For that, you have to partner with the best e-commerce fulfillment service on the market and have them handle all this for you. These services will ensure that your products reach their destination on time and in the best possible condition. They will also handle the return procedure if necessary. Without such a fulfillment service, it can get hard for you to handle the delivery process by yourself.
Distributing your inventory with the help of a fulfillment service can help reduce shipping costs by 25%. In addition to that, the total cost savings for your e-commerce business will be at least 13% if you use such services. So, it’s evident that fulfillment services can ensure a proper delivery system for your business, thereby making sure that it’s successful.
Unfamiliar Payment Methods
PayPal is the most popular e-commerce payment method, followed by Amazon Pay, Google Pay, Apple Pay, Stripe, and American Express. Other than these, VISA cards are also widely used to clear such payments. So, it’s only natural that you’ll integrate at least some of these payment options on your platform.
However, if you instead opt for an unknown payment method, people might not buy from your platform. That’s because most people probably don’t use that unknown payment method, or it isn’t that popular yet. It could also be that the payment method you want them to use has a bad reputation or is just shady.
People always avoid unfamiliar payment methods. They want security, which is why they only trust the most popular and widely known payment options. So, it’s in your best interest to use only those payment gateways and options that people are aware of and use frequently.
Lack of a User-Friendly Website
One of the biggest reasons e-commerce businesses fail is because they don’t have a user-friendly website. In fact, according to research from CB Insights, only 1% of small businesses achieve success after more than five years in operation. It means that almost 99% fail—and most often due to their lack of a user-friendly website.
A user-friendly e-commerce website needs to have a simple UI. It needs to list the products in the right categories and must allow the customer to sort products according to their types, prices, and other product-wise metrics. The website must also have clear call-to-action buttons, like the checkout button. Without these basic elements and features, it becomes very difficult to retain customers.
So, if you’re entering the e-commerce market and plan to launch such a platform, keep all these points in mind. These are easy to remember but hard to implement. Unless you can do so, you might end up as one of the 80%-90% of e-commerce businesses that fail to succeed.