7 Reasons Why ECommerce Businesses Fail

Table of Contents

Did you know 22% of ecommerce businesses fail in their first year?

We’ll show you why ecommerce businesses fail and how you can avoid being a bad statistic.

1. Failure to Invest

The first reason is simple: lack of investment in a good website hosting, professional design, and solid marketing all lead to ecommerce failure. You need a plan for where to invest to get the best ROI in the early days.

2. Fall Victim to an Established Ecommerce Company

There are between 12 and 24 million ecommerce websites. Failing to understand the competition and create a niche product will probably lead directly to ecommerce failure. Ecommerce startups need to understand how they will stand out.

3. Bad Design

A poorly-designed ecommerce site doesn’t appeal to customers. Sounds simple, right? It is simple to say, but design is complicated. Failing to partner with a great design company will just bump up the failure rate when your site is included.

4. Poor Checkout Process Frustrates Customers

Lack of free shipping sends 40% of shoppers away. This is just one thing that can go wrong at checkout. The average cart abandonment rate is 68.8% for ecommerce websites. Getting checkout wrong costs a lot in lost revenue.

5. Poor Inventory Management and Marketing Hinders Sales

Inventory management and marketing relates to product photos and descriptions. This is the sole ‘shop window’ for ecommerce websites. Not spending time perfecting these just drives up the failure rate.

6. Lack of Search Engine Visibility Kills Growth

Investing in ads and marketing is huge, but also costly. Ecommerce websites should have an SEO-focused content marketing plan to ensure they rank highly in search engines. This will bring ‘free traffic’ that is more sustainable than paid ads.

7. No Marketing Plan Means No Sales

Without a plan for how to bring their products to market, ecommerce websites invest randomly or not at all in advertising. When the results don’t come in, investment drops off. The death spiral to failure is then well under way. The answer is a better plan.

The Good News

Ecommerce is big business and it’s only going to get bigger. The percentage of retail sales that will be ecommerce is expected to grow to 22% in the next few years. No one can deny the widespread use of online shopping. The real trick is knowing how to use it to grow your business.