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7 Reasons Why Most eCommerce Businesses Fail

Alekh Verma | February 7, 2023
ecommerce business-2

Starting an eCommerce business at this point in time sounds like a dream. You will source the products from another country, place them on your website, set an urgency discount timer, and voila, you’re a millionaire overnight, right?

Wrong! Here are some sobering statistics:

  • 90% of eCommerce companies fail within 120 days of starting up.
  • Only 78% of eCommerce companies survive the first year of doing business.

But, why is that? After all, the expected sales growth worldwide is expected to reach $6.54 trillion by 2023. When the potential to sell a product online is that high, why is there so much failure in the online shopping industry?

Modern consumers have countless options to choose from. They can look up the products online themselves, and decide which shopping cart will be filled with products, and which one they will abandon.

As a retailer, you must be particularly savvy to win over potential customers.

As the eCommerce marketplace evolves, you must stay cautious and not make one of the most frequent mistakes that impede sales and conversion rates. With that being said, let’s look at the reasons why most eCommerce businesses fail, and how those issues can be addressed.

1. Lack of Product Strategy

One of the biggest reasons why an eCommerce company won’t succeed is the lack of product strategy. It seems like most of the online stores are marketplaces for everything! You often have electronics, clothes, cosmetics, and food sections all on one website! That is not a focused strategy, and the only stores that succeed with that approach are usually the ones that pioneered it.

Selling every little thing from everyone will make you look unfocused as a company. If you want to brand an eCommerce store, selling many types of products won’t make you an authority in your niche. You need to ensure that you’re only selling top-of-the-line niche products that your target customers want to buy.

Here are the aspects that you need to consider if you want to find the right balance of products to sell in your online store:

  • Products that Solve a Problem: Offering a solution means a greater potential for sales. Keep an eye on common frustrations and the products that can help people resolve their everyday problems.
  • Attract the Fanatics: When a specific demographic is inclined towards a movement or particular trend, then they will want to buy a related product from your site and interact with your brand.
  • Sell Your Expertise: Have you resolved a particular problem in your industry through your service? Good, it means that you can turn that expertise into profit and have a unique eCommerce product at the same time.
  • Cash in on Trending Products: Stay on the lookout for trends and be among the first ones to offer an emerging product on your website. Listen to your marketplace and your target customers, what they’re curious about, and what they’re looking for online and in online marketplaces.
  • Find High-Profit Products: If you want to sell physical products, start with low-cost products that can bring up your high-profit margins. When you price these products, consider the entire investment from sourcing the products to marketing them.

2. Missed Opportunities Because of Weak Content

Even if you’re selling the best products at the best price, without good content, you won’t be able to maximize profits for your eCommerce business. Low-quality content destroys the search ranking of the site and discourages users to click and learn more about your products.

When people open your website, they make quick decisions on whether you’re different from your competitors. Good content is crucial to convincing others that you offer something more than other comparable websites whether it’s a product description, photo, video, or a blog post.

Quality content improves conversion rates and strengthens the relationships with your current customers. When creating content for your eCommerce website, consider the following:

Good Visuals

People want to see products in a visually-pleasing way. That is why you must have good imagery that supports your content. It’s the perfect combination that makes product pages stand out. Need proof? Check out this example from Stormy Kromer. It’s a clear image that you can zoom in on. Buyers can now visualize the product online.

Always Provide More Value

Some people buy products at a snap of a finger. Others need a bit more convincing. By providing useful tips, product videos, demos, and educational posts on your eCommerce site, you instantly become a thought leader in your niche. Customers will trust you more when your content is more than a sales pitch.

Pay Attention to Details

Everything from your company’s About page to the product description must be carefully detailed.

A thorough product description convinces better. The important elements of a quality product description are:

  • Copy targeted towards the customers’ needs
  • Product characteristics and benefits
  • Targeted keywords that improve search engine visibility

3. Weak Search Ranking

Even by having unique products, it’s no guarantee that they will rank well on Google. When your customers search for a product, they’re taken to a SERP:

As an eCommerce business, your goal should be to rank your product pages in the top ten search results. But that’s easier said than done. SEO is not an easy task, and it can be especially challenging at times. Here are common mistakes made by online stores:

  • Ignoring What Customers Say: More than 90% of consumers read online reviews before they buy a product, and 84% of them trust reviews as they would trust a friend. Not only that they serve as proof of the product quality, product reviews are also an invaluable SEO asset. When the reviews are positive and regular, it’s a positive signal that your eCommerce site is relevant, which moves you higher in SERPs.
  • Poor Descriptions: There are countless eCommerce websites that either describe the product in one sentence or just copy the description from the product supplier. Don’t be one of them! The more unique your content is on your product pages, the better for your search ranking and your sales.
  • Not Using Schema: Google uses a schema markup to understand your eCommerce site and page components better. Apart from making the search results for your website stand out, proper schema markups are also a signal to your target customers that you have the value that they’re after.
  • Using Duplicate Title Tags: When you sell similar products or multiple products that are under one brand, having unique title tags can be challenging. Nevertheless, you should aim for it. Make sure that each of your product pages is unique, starting with titles, to the content, and the URLs.
  • Wrong URL Structure: Speaking about URLs, too many product categories and pages can make your URLs a mess, especially if you don’t know how to format them correctly. It’s not just about adding products to your online store. It’s also about speaking to search engines, and even more importantly, talking to your customers through your URLs. Make sure that the entire product name is in the URLs, and that each of them is unique.
  • Including the Wrong Keywords: When it comes to SEO, you should not rely too much on brand language and assumptions. You need to rank for the terms that your target customers type into their search queries and will see their SERPs.

Targeting too many keywords means that you’re not focused enough. You need to narrow things down to the search terms that matter most to your customers. The following considerations should be applied when choosing keywords for your eCommerce site:

  • Search Volume: The more volume a search term has, the higher the chances of traffic to your site. Using tools such as SEMRush or UberSuggest can help you gauge search volume data for a given term. However, keep in mind that high-volume search means increased competition.
  • Keyword Competition: The less competition you have for a search term, the bigger the chances to rank for it. Once again, you can use a tool such as SEMRush or Ubersuggest to uncover the keyword ranking difficulty (KD), and additionally, use the MozBar to evaluate competitive domains.
  • Keyword Intent: You want to rank for relevant keywords with marketplace intent. Look at each keyword and analyze whether it helps you sell products or not.

4. Non-Targeted Marketing Efforts

As an eCommerce business, you depend on a regular stream of high traffic. But a wider marketing net does not always result in more profit. Attracting untargeted traffic to your site only decreases the conversion rate.

Take a look at the bigger picture, and ensure that you’re not making any of the following eCommerce marketing mistakes:

  • Vague Brand Voice: A weak and inconsistent brand voice is the quickest way to become ignored as an eCommerce site. Without a clear and relevant brand voice, you’ll lose any trust that prospects have in you, which reduces the chances of converting them to zero. Make sure that you have a consistent brand voice throughout every marketing and sales channel.
  • Over-Promotional Ads: There’s a fine line between marketing and sales, and between a well-sounding and over-sales advertisement. A pushy sales language will drive people away from your online store. Instead, you need to focus your efforts on meaningful content that will make people interested in your products.
  • Unsegmented Email Blasts: Email marketing can be one of the best channels to convert potential customers. Everyone who signs up usually has some interest in your products. However, if you want each newsletter to convert, you must segment your subscribers. For example, your newest subscribers should get something of value first, instead of an offer. Or, the ones that have purchased before should get a complimentary offer. Whatever you do, don’t send the same newsletter to everyone.
  • Using Only One Marketing Channel: So, you’re great on Instagram. What about Twitter and Facebook? Snapchat, the new trending networks, and channels? You should always be on the lookout for new marketing approaches and create content that’ll engage on each channel.

Don’t be afraid to experiment with your eCommerce marketing approaches. Providing value attracts traffic to your store. The right customers will acknowledge your originality and continue shopping with you.

5. Design Overwork

In any type of business, not just in eCommerce, it is important to have a well-designed website and make your brand memorable. However, the rules of web design and beauty standards may vary depending on the online store.

A modern eCommerce website should be functional, safe, responsive, and fast. But also, it should not look or feel complicated. If you overdo it with the design, the conversion rate won’t be as high as you want it to be.

As the great Leonardo Da Vinci said:

“Simplicity is the ultimate form of sophistication.”

When people open your eCommerce website, they are there with one purpose in mind – either they want to look around or directly buy the product. Your website needs to make that experience as quick and straightforward as possible.

It all comes down to how functional your website is. And to make up for it, you will have to sacrifice some popular and modern features that you might’ve seen in trendy web design portfolios.

One of the eCommerce websites that have nailed their design and functionality is Target.

Their featured offer is always highlighted with a large header, and the rest are below the header. The navigation menu is pretty simple, and browsing through the site is even better than walking into one of their stores.

When you shape the messaging and the copy of your product pages, focus on your calls-to-action. When an image or a product title appears, the CTA should be nearby and highlighted.

The shopping cart should also be easy to locate so users can open it right after they’ve chosen their products.

Every scroll and click should motivate users to take further action towards the checkout. Practical design, visible CTAs, and easy navigation will always outdo modern design trends when it comes to online stores.

If you want to learn more about the current state of the design of your eCommerce site, you can start with tools such as HotJar to get more info on what users experience when navigating your website.

6. Not Being Good Enough on Smaller Screens

Nowadays, people shop on the go and directly through their mobile devices. In 2020, non-responsive eCommerce websites are less frequent, but still, there are a lot of them that aren’t optimized properly for mobile shipping.

The stats say everything. By 2025, approximately 75% of the world will be using smartphones to access the Internet. In 2021, mobile will overshadow desktop in sales by 54%. Furthermore, up to67% of Americans buy things for fun on their smartphones, proving that everyone is heavily involved in the mobile digital window-shopping era.

The users themselves know what they want:

  • First-Rate UX: Studies have shown that 52% of consumers will not interact with a website that has a lousy mobile UX.
  • Helpful Content: 73% of users say that they’d instead buy from companies that provide them with useful information regularly.

Without a properly optimized site, users will either stay around to see if they can push their way towards the checkout or walk away immediately and never come back. A responsive site results in better product presentation, faster experiences, cleaner navigation, and functions that can be done in a few clicks.

Put yourself in the customer’s shoes, or even better yet, conduct a usability test to see if everything is optimized as it should be on your eCommerce site.

7. Complicated Checkout Process

Through online shopping, both you and your customers can save plenty of time. However, nobody wants to spend an hour filling out forms and going through endless checkout steps. People are desperate for simplicity when purchasing online.

More than 20% of American shoppers have abandoned a cart due to a “too complicated checkout process”. With an average cart abandonment rate of over 74%, some mistakes that online retailers make when it comes to the checkout experience:

Checkout Mistake #1 – Mandatory Accounts

Pushing new users to register before they can buy a product is one of the best ways to push them away from your eCommerce site. People will refuse to create an account either because they don’t want to give their personal information too early, or they don’t want to receive sales newsletters.

To avoid that, you should let potential customers opt to buy as a guest user.

A guest option speeds up the checkout experience and doesn’t force users to create an account. It’s a brilliant way to boost mobile conversions because let’s face it, creating an account on a smartphone is worse than on desktop.

Checkout Mistake #2 – Too Many Steps

The fewer the steps, the better. If you have your checkout steps spread out on more than one page, customer retention will stay low, and the cart abandonment rate higher. Instead, if possible, make a one-page checkout experience.

Also, consider adding a progress bar. Your customers like to know the stage of the buying process they’re at, and a progress bar will allow them to visualize how long it will take to complete an order.

Checkout Mistake #3 – Asking for The Money First

Of course, if you want to grow, securing revenue is important. However, for customers, it can be a turn off to give their credit card details before they are certain that they’ll get the product delivered to their homes. As a result, your cart abandonment rate might be higher than expected.

Instead, you can ask for the shipping and contact information first, and ease your way to the billing information as the final checkout step.

Wrapping Up

If you want to succeed as an online retailer, you must persevere and learn from challenges that come your way.

We know that running an online store is not easy, and that’s why we hope that with this article, you’ve learned a thing or two that can help you focus your approach towards becoming successful in online sales.


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