by Brian McKay



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There is no denying that it is easy to start an ecommerce business, and fast too. You don’t need to make a massive investment either. However, this also means that ecommerce businesses come with a high failure rate. As many as 80 per cent of businesses end up closing down, which means the odds aren’t stacked in your favour. This is not said to put you off, though. By understanding the unique challenges that ecommerce businesses face, you can ensure you are prepared and put the odds back in your favour. So, let’s take a look at some of the most common reasons for ecommerce failure.

No patience

It can be difficult to patient. After all, you are desperate for your business to grow and be a real success. However, growth takes time, and it needs to be organic. Don’t assume that you are going to start making profits straight away. It can take several months to notice any type of profit. You need to build your brand and get noticed, and this is never something that can occur overnight.

No website traffic

If you struggle to get people to view your website, you are going to struggle to make any sort of impact. Not only this, but if you have a high bounce rate, i.e. lots of people come to your website, but they leave rather than converting, then you’ve also got a big problem on your hands. You need to have a professional website, which is search engine optimised, and you need to have a solid marketing plan in place. Companies like Forix Commerce can create a powerful ecommerce website that is developed for your target audience, your budget, and your goals. This is the best way to ensure your website is working for you. When it comes to the marketing side of things, it is important to use a number of tactics, which are integrated together, for the best results. Of course, the approaches you use will depend on the nature of your business, but search engine optimisation, content marketing, and social media marketing cannot be ignored. You need to get word out about your business, create high quality and high value content and links, and gain as much visibility as possible.

Poor product photography

This is another major problem a lot of ecommerce businesses face. Remember, you live and die by your products. In a physical store, people can assess products in all of their glory. Online, they are relying on your photographs. This is why it is imperative that they are of a high standard, and that they show off your products in the best light. It is a good idea to have a number of photos so that customers can get a full understanding of what the item is like. Strong visual representation is a must if your business is to succeed. Clear, clean and focused is what you should be aiming for.

Too much competition

As mentioned in the introduction, it is very easy for businesses to launch today because of the Internet. Because of this, competition is rife, and it is fiercer and stronger than it ever has been. If you have established and significant competition, it can be extremely difficult to survive. The issue with a lot of businesses today is that they attempt to sell something that is already established. Before you launch your company, you need to make sure your business is different from what already is out there. Ask yourself this: what makes your business different from the countless other ecommerce stores available? If you cannot answer this, then it is time for a rethink. You are going to really, really struggle to secure customers if you are offering something identical to what is already in the marketplace. No one is going to switch supplier for no good reason.

Poor inventory management

Another reason why a lot of companies fail is because they do not manage their inventory correctly. This can be one of the biggest problems that a lot of new ecommerce operations face. You may disappoint customers and miss out on sales if you do not have enough inventory. On the other hand, if you have too much, it could ruin your cash flow, which could spell enormous trouble for your business. Not only this, but ordering more products is not as easy as you may assume. It can take one supplier a few weeks to get something to you. For another supplier, it may only take a few days. This is because most vendors have distinctly different lead times, making it very difficult to manage. You then have the freight costs associated with getting inventory to your company, which can be significant. This is why you need to spend a lot of time and effort working on inventory management to make sure you get it right.

No cash flow

Last but not least, this article simply would not be complete without talking about cash flow. Poor cash flow is one of the main reasons why many businesses fail to survive today. At the most basic level, this is the money that is coming in and out of a business. If you do not have enough cash to keep your business operating, you are going to run into a lot of trouble. This is why effective cash flow management is a must. To ensure people pay you on time, you need to implement clear payment terms, send invoices out in a timely fashion, and chase them as soon as they become late.

So there you have it: some of the main reasons why ecommerce businesses fail today. If you can avoid the mistakes that have been mentioned above, you can give your business a real chance of thriving and make sure that you end up in the 20 per cent rather than the 80. Good luck!