ecommerce failure reasons

Running a successful ecommerce company is hard… but failing is a piece of cake! Whether you’re a seasoned online retailer or a brand new startup, it’s unsettlingly easy to fall victim to the biggest mistakes in online retail. The good news is, you can still avoid them if you know what to look for.

In this article, we cover the 7 biggest and most common ecommerce mistakes that lead to failure. Keep your eyes peeled for the pitfalls below, and heed our advice on how to steer clear of them.


1. Customer Base is Too Broad

Ecommerce, and all online industries, have a predilection for niche marketing. Before you can build a truly successful ecommerce brand, you first have to carve yourself a small dedicated following among specialized niches. Even Amazon, when it first began, started in the used book niche!



Try to make a few shoppers love you instead of a lot of shoppers like you. If you already have an online store, see what your best-sellers are or which customer groups spend the most. Prioritize those areas with better marketing and product options, and fund those extras by cutting money from poorly performing segments.

If you need help finding the most profitable niches or the niche that’s right for you, check out our all-encompassing guide The Top Ecommerce Niches of 2020.


2. Poor Product Presentation

The advantage of brick-and-mortar retail over ecommerce has always been seeing the product in person. In a store, if something interests you, you can pick it up, try it on, or play with it in your own hands. Ecommerce has to do its best to compensate using visuals and text, so if your product pictures are low-quality and your written descriptions are uninspiring, customers won’t have enough faith to buy it.



Invest more in product presentation: high-definition images, thoughtfully written descriptions, and more advanced visuals like videos or even augmented reality. If you have money to spare, product videos can increase product sales by 144%. Not to mention the money you save on returns, because customers know better what to expect. If you’re on a tight budget, you can still improve your visuals with these 3 cheap product photography hacks.


3. Clunky Site Design

Substandard ecommerce website design is one of the most common causes of ecommerce failure. This category itself is really just a collection of many different design-related mistakes, so even if your site excels in one area, it can still fall short in another area. In particular, evaluate how well you handle these aspects of site design:

  • Checkout — Checkout should be as fast as possible, with minimal fields to fill out.
  • Mobile Responsive Mobile ecommerce has been rising steadily for the last few years. Don’t alienate mobile shoppers – make sure your site is usable on mobile devices.
  • Search & Categories — It doesn’t matter how good your products are if customers can’t find them. Make sure you use intuitive product categories and simple site navigation.
  • Loading Times — If your site loads too slowly, shoppers will abandon it for faster ones.
  • Guest Options — Disregarding the perks of personal accounts, allowing checkout for unregistered guests will increase sales while creating an easier user experience.



We recommend redesigning your site every few years to stay current with the latest ecommerce trends. You can start with the most up-to-date 2020 Ecommerce Web Design Trends.


4. Inadequate Marketing

Digital marketing is a separate beast from the traditional practices of years past. A brick-and-mortar store might pull enough traffic just by existing on a busy street, but digital brands need to actively attract visitors at all times. And in the digital space, you have to use digital hotspots: social media, blogs, SEO, and digital advertising.



Build a comprehensive digital marketing strategy. Social media is a must, and can take you far as long as you follow the best social media marketing principles. Blogs help too as something to post on social media, but their main advantage is SEO as long as you follow blogging best practices. Above all, strike a personal chord with shoppers by using emotional marketing in all of your outreach.


5. No Reviews or Feedback

It’s one thing if you talk about how great your products are, but it’s a whole other thing when other shoppers do it. According to Inc., 84% of online shoppers trust reviews as much as personal recommendations from friends, and 64% make a purchasing decision after reading 1-6 reviews. If you don’t have reviews, you don’t have credibility.



Reach out to customers after they buy a product and kindly ask them to review it. A small email will suffice, but some channels also allow direct messages. Try to time your correspondence so that it arrives soon after the delivery — that’s when they will be most excited about the product.


6. Inefficient Inventory Management

Ecommerce success is defined by making enough profit to cover costs. If you’re deadlocked in raising profits, try lowering your costs instead.

Inventory management is a great place to start streamlining your overhead costs. Stored, unused inventory is worse than dead weight, it’s an expense. Those storage fees can add up to kill an otherwise successful business model.



Get inventory management software like Ecomdash. Our automated software makes your inventory easy to manage through a complete, user-friendly platform, with all your sales and inventory data available at your fingertips — not to mention all the other time-saving advantages like automatically updating your stock levels on all your channels.


7. Unsympathetic Shipping and Return Policies

The fierce competition of ecommerce means more than just brutal pricing wars — it also ups the ante for shipping and return policies. For companies that can’t undercut their competitor’s costs, they aim to create a better shopping experience overall through policies.

While in the past options like “free shipping” were seen as optional, they’re quickly becoming necessities. If you’re selling the old-fashioned way — charging shipping rates for a standard delivery period — the first thing customers will do is check Amazon for the item to see how much two-day Prime shipping costs. After all, why not? If they’re paying for shipping, they might as well get it sooner.



For one thing, offer free shipping if you can. That’s a hard pill to swallow for online retailers — and “swallow” is an apt metaphor because you’re the ones who eat the shipping fee — however, with smart budgeting practices even small companies can make free shipping a reality.

You can also go the extra mile with generous return policies, which may dig into profits, but at the same time increases customer loyalty, positive reviews, and repeat shoppers. In other words, your return policy can actually help you.


Takeaway: Don’t Panic!

Take a deep breath. Listing out the most common mistakes, one after another, can be overwhelming. Yes, these mistakes could happen to you, but, no, they don’t have to. For each possible mistake that could bring down your ecommerce business, there’s an equally possible method for dealing with it. And knowing what to look for is the first step. Now that you know what mistakes to look for, be sure to not commit one of these seven bad ecommerce habits.

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