5 Reasons Online Stores Fail – And How To Avoid Them

E-Commerce isn't as easy as it seems. Learn the most common reasons why online businesses fail and what you can do to avoid the same fate.

E-commerce can be a brutal, unforgiving industry. A mere 10 percent to 3 percent of online stores actually survive for more than a few years. Yet in spite of a high failure rate, e-commerce continues to boom, with worldwide sales projected to top $4 trillion dollars by 2020.

In other words, even though running an e-commerce business can be grueling and challenging, it’s also immensely rewarding if you do things right. Believe it or not, that’s actually a lot easier than you’d expect.

The mistakes that doom most online businesses are surprisingly common. Here’s a look at each, along with tips to avoid them.


1. Your online experience is a headache

Picture this scenario: As you walk down the street you notice a new boutique. However, the moment you step inside, you regret it. The lighting is terrible and the merchandise is thrown about resembling a labyrinth of bad decisions. It doesn’t take long for you to turn around and walk out.


Why content fails
Photo: © Boggy, YFS Magazine

What I just described above is a frequent online experience of many e-commerce startups. The website is messy and unappealing with a host of poor quality product photos, a lack of product descriptions, terrible usability and more.

Ultimately each of these factors contribute to one outcome: online shoppers can’t find the products they’re looking for and will ultimately give up and go elsewhere.

E-commerce pro tips

Keep your e-commerce site simple and functional. Your website should be mobile-friendly with a low resource load. Remove unnecessary elements, offer searchable product categories, and invest in high-quality product photos or demos.

Include at least three high-quality photos of each product. Hire a professional photographer if you need to. 

Write descriptive product copy. Appealing product descriptions are just as important as great photos. Again, if you don’t have the chops to write them yourself, hire a copywriter to handle it for you.

Most importantly, don’t try to sell everything. Focus on a set of core products that appeal to your ideal customers. If you haven’t settled on a specific and clearly defined vertical, you’ll confuse shoppers and lose out on sales.


2. Inventory management is a disaster

Inventory management is a tough nut to crack. If you buy too much, you’ll sit on cash that could have been have been used to bolster your online business in other operational areas. Too little inventory, and you’ll miss out on sales.


Photo: © foxyburrow, YFS Magazine

You also need an adequate way to track inventory and workflow. How long does it take to order supplies from each vendor? How will you account for variable delivery times? How can you track what you have and don’t have? How will you handle shipping costs?

E-commerce pro tips

These issues can easily be solved with inventory management software. Whether you use a Shopify or WordPress plugin, a Magento extension or stand alone software, it’s imperative to invest in a tool that allows you to easily track orders, control stock, and manage fulfillment. Don’t try to handle it yourself or with an excel spreadsheet – trust me.


3. Online shoppers don’t know you exist

Even if you run a quality online store backed by a strong SEO strategy, there’s still a chance sales will be dismal. You see, it’s not enough to offer a great user experience (UX). You also have to figure out how to approach brand awareness and the right marketing mix to drive sales.

Poor marketing is one of the core reasons for e-commerce startup failure. What good is it to have a beautiful online store and no one has ever heard of it?

E-commerce pro tips

Even if you have a small budget, there are plenty of things you can do to get the word out. Marketing expert Neil Patel suggests the following:


  • Create online videos

    Online videos should be designed to both educate and entertain. Feature your product, benefits and features, and create a compelling offer.

  • Study SEO

    There’s a good chance most of the content in your online store doesn’t benefit from quality SEO. Do a bit of research and change that; Moz’s Beginner’s Guide to SEO is a good place to start. Most e-commerce platforms are compatible with SEO plugins as well.

  • Build a social community

    It costs nothing to create a Facebook Brand page or Instagram account. all you need in order to interact with people through either is some spare time.

  • Work with influencers

    Create an influencer marketing campaign. Find people with the same audience and interests as you who can drive traffic to your site. Reach out to them and offer value, but don’t be too pushy.

  • Focus on content marketing

    Content marketing is an effective brand awareness tool and it costs less than you’d think.


4. The shopping and post-purchase experience is horrible

Does your online store have a help desk? What about 24/7 support? How do you handle order fulfillment? Is your shopping cart intuitive and easy to use, or an absolute nightmare? These are all essential questions you need to consider and answer.


Photo: © GaudiLab, YFS Magazine

E-commerce pro tips



Invest in dedicated support

    If you’re not able to hire support staff yet, then shop around for help desk software. Most online help desk solutions offer free trials and easy set-up. Think back to your most memorable customer experiences. I’d wager that they included easy access to a help desk or strong customer support component.

  • Evaluate your online shopping cart

    Can customers get in touch with anyone should they have a pre-purchase question? Do you offer order security (through trust seals, encryption, or other safe ordering methods)? Are related products relevant to the item selected? Review your checkout process and see where you can improve it.


5. People don’t trust you, yet

Maybe your online store looks low-budget, shoddy and unprofessional. Perhaps you haven’t featured trust marks or ensured you website is secured with SSL. It could be something as simple as how your product descriptions are written. Either way, a lack of trust is one of the fastest ways to kill a sale.

E-commerce pro tips


  • Display trust badges

    Trust marks have a proven impact on conversion rates. Include a few relevant trust marks on your site, especially during the checkout process. 
SSL Certificates. Take measures to offer a secure shopping and checkout process.

  • Offer customer testimonials

    People don’t trust a site without customer reviews and the option to submit a review of their own. This is a simple way to build your online reputation and trust.


Build a thriving e-commerce business

It can be difficult to succeed in e-commerce, but when you do, the results are more than worth it. By making yourself more aware of the ways you can fail, you’ll be well-equipped to avoid them. Now get out there and start selling – you’ve got this.


This article has been edited.

Amy Brueckman is a tech publicist for Northcutt, an inbound marketing group. She has an extensive background in web journalism and specializes in networking and digital outreach. Away from the desk, you can find her biking next to Lake Michigan in search of bubble tea. Connect with @northcuttHQ on Twitter.


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