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The world of e-commerce is a very harsh place. The e-commerce failure rate is high, and most e-commerce startups wither away within the first few years of their operation. However, those that can stick it out and solve its problems are usually perfectly poised for sustainable growth. We here at Dropship USA work with dropshipping hopefuls and help them realize their full-potential as e-commerce entrepreneurs.
As an organization that works explicitly with e-commerce businesses, we have seen the highs and lows of the sector, and we often get asked the question, “Why E-Commerce Businesses Fail?” Well, there are several internal causes of business failure. Some are related to e-commerce only, and others can be considered as small business failures and causes. However, the most common reasons why the e-commerce business failure is so high are down to only a few various reasons, and those are the ones we will address here. So without further delay, let’s begin!
Choosing The Wrong Product To Sell
If you talk to any successful e-commerce entrepreneurs, they will say that they enjoy the success because their products sell like hotcakes. Choosing the right product is the most significant factor in success, and most often or not, e-commerce businesses fail because they didn’t choose the right product to sell.
If you are selling something that no one is buying, how do you expect to succeed? The first thing you need to do when setting up your e-commerce business is to research the niche and find the product you want to sell. Odds are you won’t be able to find a unique product that only you are selling. To ensure success, you need to offer your customers value. Please find out your value proposition and make sure your customers see the upside in giving you their money.
As we eluded before, people online are looking for value. If you are a dropshipper, then you’ve seen the people and heard the stories of how relatively new e-commerce entrepreneurs are making millions. One of the reasons they are succeeding where others fail is that they are offering the best prices for their customers. You will see many different e-commerce sites attracting thousands of traffic and generating hundreds of thousands of dollars in revenue each month with bad design.
Granted, these stores will do better with better design, but the point of this example is to show you the importance of how much pricing is essential when thinking about success. Pricing is vital outside, yes, but the importance of correctly pricing your product is even more critical for an e-commerce store as the next store is just a click away. So if you don’t want to fail, then figure out your pricing.
No Clear Marketing Strategy
We’ve seen plenty of dropshippers think that just because it is easy to operate, it should be easy to generate business as well. Many e-commerce websites take digital marketing lightly and believe that just doing it will bring out the desired results. You see a successful business doing things, and following their madness seems like the correct approach.
However, there’s a method to their madness. That’s something you don’t see. Without the right marketing plan, your e-commerce website is like a ship without a rudder, and you will float aimlessly along the online sea until you sink, and you don’t want that. So if you don’t want to be another e-commerce failure, then take your time and develop a marketing strategy. Remember, you don’t have to do it all. Just do simple, small things really well, and then scale up your efforts from there. The first thing you need is to set small achievable goals from your marketing plan, so start now!
Your Website Doesn’t Rank
We here at Dropship USA work with many different types of e-commerce startups who specialize in many other things. In our experience, we’ve talked to plenty of e-commerce owners who started with the idea that focusing on Social media is the primary aspect of digital marketing. However, they soon realized the importance of SEO and how it contributes to sustainable growth and success. SEO is Search Engine Optimization, meaning your online store is optimized to rank on Google and other search engines. This is vital if you want to reach many people online, which will legitimize your website to the market as it ensures success. So if your website doesn’t rank, then the website is bound to fail. Make sure you put in some effort when starting your e-commerce business.
When we say bad design, we don’t mean that it looks ugly. What we mean is that the design doesn’t focus on the user experience. Things like how easy it is to navigate, how long does it take for the user to get what they want. All of these aspects go into creating a preferable user experience. Not having an intuitive user interface that enhances user experience is considered a bad design. If the user isn’t comfortable, they won’t visit your website, and if they don’t visit your website, you will have no business. As you can see, bad designs are a significant factor in why e-commerce businesses fail. This is why we here at Dropship US put a lot of our efforts into finding out the perfectly optimized website that encourages user engagement.
Very Little Call To Action
As we’ve been saying all this time, making things easier for the user is the first thing you should think about. That means you need to have a lot of call-to-action buttons in your design. Call to action buttons work as easy access to the things they want, so putting very little of them will mean the customer needs to find the place to go to the next step and often give up. So make sure you don’t let that happen. Integrate as many calls to action as possible.
Lacking In Quality Content
Content is the only way to persuade customers to pay. If you create quality content around your products and business, it helps people learn more about you and your vision. Modern customers look for that personal connection, and quality content helps you out with that. Detailed pages, long format content like buying guides and “how to” guides, videos, high-quality demonstrative images are all considered quality content and are vital for success in the e-commerce sector.
Even if you have the best product at the lowest prices, you will see no sales if your shipping costs are too high. Research shows that people love free shipping. People love free shipping and are given a choice between discounts or free shipping; they would always choose free shipping even if the discount is higher than the shipping cost. So if you don’t want to add to the current e-commerce failure rate, make sure you have your shipping sorted.
Not Enough Urgency
As an e-commerce business, you need to show that buying your product is an urgent matter. Meaning you have to create situations where the customer feels like they need to buy your product now, and you do that through promotions. Put out offers and limited-time promos that will entice customers to buy your product now. Show some urgency and make them believe the value in buying now rather than later.
Bad Product Images
“A picture says a thousand words” this is so true for e-commerce stores. One of the significant reasons many e-commerce stores fail is that the product images on display are bad. Understand that people are not physically checking the product. They see it on your website. So if they don’t feel satisfied with the product they see, they won’t buy it. It’s as simple as that. So make sure when you set up your website, you have high-quality product images.
Value Proposition Is Key
We’ve been building up to this moment. As an e-commerce store, you know that you will have to compete with other stores because they sell similar products. However, where you can beat them is the value you provide. Everyone looks for value, be it the best bang for the buck or something different. So you have to make a value proposition to your audience so that they see that buying things from you is better than buying from your customer. Once you can make that happen, there’s no stopping you.
Having The Perfect Platform
So there you go; those are some of the reasons why e-commerce businesses fail and what you can do to avoid adding to that failure rate. We here at Dropship USA specialize in creating perfectly optimized websites that aid in sustainable growth and success. So if you are looking for something better to elevate your e-commerce business idea, then contact us! And with that being said, that’s all we have for you now. Let us know in the comments below what you think about the e-commerce sector and your best e-commerce experiences. Also, hit us up on our socials to send in your ideas for what we should talk about next. We will come back with something new soon. Until then, see ya!
Don't forget, you can get a fully automated USA based dropship website, built for you, in whatever niche you want, in 72 hours or less. Go to https://learn.dropshipusa.io/webclass to register for our free webinar that will teach you our secret dropship model, and how you can get it built for you in only 3 days!