Part of the beauty of starting out in the world of e-commerce is that it’s something anyone can do. All you need is an idea and a way to sell it. But such low-entry levels can also lead to a heady mix of amateurism and inexact economic science which leads to a particularly high rate of failure. One UK study suggested that an astonishing 90% of new e-commerce companies fail within 120 days. In this article, we point out four of the most common mistakes e-commerce sellers make and what you can do to avoid them.
Using the wrong platforms
The existence of major platforms like eBay and Amazon provides a basis for anyone to start sourcing and selling goods online. Unfortunately, these giants can place a serious upper limit on your growth because they take such a high percentage of your final sale fee. Equally, choosing the wrong ecommerce platform could set you back by limiting your capacity for customization as the site grows. Getting this wrong can mean having to spend money on a new setup in order to avoid security issues, stalling conversion rates, traffic reductions and as a consequence of these, revenue losses.
The bottom line: Avoid big brokers like eBay and Amazon and spend a lot of time researching the specific functionalities offered by different ecommerce platforms.
Missing out on the insurance
According to the industry publication Insurance Journal, 75% of American businesses are underinsured. This figure is likely higher in the e-commerce sector. Many people who start out in e-commerce do so as a way of testing the water. In the early days of your operation, as you take products to market in an experimental fashion, you can make do without insurance. Unfortunately, many e-commerce retailers forget to take out a policy as those ten $10 shipments scale up to fifty $50 shipments per week.
The bottom line: As you scale up your selling, invest in a comprehensive commercial cover for small businesses, such as Hiscox, which includes public liability insurance. Getting cover is still more important if you have your own premises and a workforce to protect as well.
Failure to harmonize SEO and UX
There’s a lot of information out there when it comes to SEO (Search Engine Optimization). If you’re running your own SEO on a shoestring, you could be forgiven for producing keyword-dense content with a lot of external links that’s aren’t particularly appealing to site visitors. Having a blog and choosing your keywords is all well and good, but you have to find a way of making it appealing, readable and relevant to the users who stumble upon it. It’s also vital to keep your site navigation as simple as possible (ever heard of the three-click rule?).
The bottom line: Google is increasingly trying to refine the way it handles searches to prioritize User Experience (UX). This means it’s essential to abandon outdated SEO hacks in favor of clever keyword-optimized content that keeps users on your site. Regularly refreshing of your content will also help you score highly on SEO.
Misidentifying market need
Market research specialist CBS Insights analyzed 101 major U.S. startup failures in recent years, finding that 42% of collapses were down to misidentifying market need. In particular, these enterprises reported their mistaken focus on products and services that solved interesting problems, rather than concrete consumer necessities.
The bottom line: If you’re starting out in e-commerce, it’s vital that you invest time and resources in a product which has solid market need. At the heart of this is a solid customer profiling process.