E-commerce has gone from being an emerging trend to becoming the fastest growing frontier for monetizing online traffic. Internet giants Alibaba and Amazon are resounding examples of this, easily displacing brick-and-mortar stores with a streamlined service. E-commerce sites can offer faster service, quick delivery, and a range of options unheard of until recently.
As consumers continue to migrate their activities to the web, businesses are also learning how to better build their online presence. Nevertheless, constructing an e-commerce site is harder than it seems.
While the prospects of success are great, the potential pitfalls make it vital to be careful when creating a business. These are some of the worst mistakes e-commerce businesses can make when starting business
1. Starting without a game plan
Any successful entrepreneur and venture capitalist knows how important it is to enter the game with a proper business plan. Although they are not set in stone and things can quickly change, business plans answer several important questions. What will the business sell? Who will the company target? How will the business measure and reach its milestones? Without answering these questions from the start, companies are doomed to fail. Entering a market without a plan creates too many hurdles while needlessly wasting time and resources.
Taking the time at first to evaluate the business and doing demographic research, finding pain points, and meeting these demands is crucial. Moreover, a plan creates a rough outline of operations, expenses and revenues, and even how long it will take to break even. Companies that do not understand their business have a difficult time meeting their goals. Additionally, smart businesses know to plan for success, but prepare for the potential of failure.
2. Not investing in proper online security
Coming up with an e-commerce business necessitates proper security for two reasons: the obvious one would be to prevent sensitive client information from leaking out, and the other is to signal your clients that your store is a safe entity to conduct business with. Nowadays, SSL certificates have become an industry standard, up to a level that even Google uses them as a website ranking indicator. For just a few dollars a month, SSL technology allows businesses to encrypt their data and keep clients out of harm’s way. With that, investing in web security is a “no-brainer” decision.
3. Not having a marketing plan in place
One of the hardest aspects of e-commerce is gaining traffic. Creating a website is not a guarantee that customers will visit it, or even find it amongst the thousands of options available to them. However, companies should avoid the mistake of assuming that traditional advertising methods will give them comparable results. Moreover, companies must place great emphasis on creating a cohesive and comprehensive marketing strategy. Scattershot attempts at different channels are more likely to result in wasted money than higher traffic.
Smart businesses will invest in a variety of channels working in unison. Email marketing campaigns can help turn one-time shoppers into loyal customers. A/B testing can create buzz and traction on social media, and help companies create funnels to convert traffic. By establishing a means to go from views to clicks to sales, companies can create a reliable pipeline for new business.
4. Ignoring the product
At the end of the day, e-commerce sites are built for one purpose: selling a product. The online experience offers many benefits, but it limits customers’ abilities to directly interact with the goods they are buying. In some cases, this can create a barrier to sales, as certain products are hard to buy without physically inspecting them. The worst thing a company can do in these cases is to neglect their descriptions and explanations.
Customers are likely to turn away from a website that does not tell them why their products are good. Moreover, they will not purchase a product they do not fully understand or connect with. For the best chances of success, companies should spend time crafting rich, detailed descriptions of their products. By creating a need and desire for their products, businesses can improve their sales and bottom line.
5. Lack of payment options
Unlike brick-and-mortar stores, e-commerce sites rely exclusively on digital payments for sales. This can create a bottleneck for companies that do not properly plan for customers with different needs. While credit cards remain the standard for transactions, many people do not have them, or prefer not to use them online. By closing the available options for payment, companies can inadvertently turn away sales before they are even made.
Smart companies will give their customers alternatives. Today, payment alternatives have become more established and efficient. Companies such as Trustly – which offer customers the ability to pay for goods directly with their bank account – have simplified transactions. By connecting directly with consumers’ accounts and making direct transfers, Trustly, for instance, has created a safe system to buy goods and services from e-commerce stores. Businesses should always be on the lookout for innovative new ways to help customers purchase their products quickly with a sense of security.
“E-commerce is becoming increasingly cross-border. If you’re online, you increasingly want to sell to not only your own market but also across Europe. If they integrate with us, they can get paid by consumers across all of Europe. No one else can do that,” said Oscar Berglund, the company’s CEO.
6. Neglecting customer service
Physical stores have one major advantage over e-commerce sites: personalized service. When shopping online, most customers cannot count on having someone personally help them find the right product. This does not mean that e-commerce sites should absolve themselves of helping their shoppers. Neglecting customers is the easiest way to lose sales in a hurry.
E-commerce sites should be designed to help customers through the process of buying. Tools such as live chat, around-the-clock phone support, and even an active social media presence can make a huge difference. Companies should actively engage their consumers, find their likes and dislikes, and improve their service consistently. Bad service is a catalyst for a bad reputation, and customers put faith in company reviews. Moreover, good service can be the difference between a happy customer and a brand loyalist.
7. Failing to stand out from the crowd
As far as barriers to entry, e-commerce means new companies face significantly fewer hurdles when opening a shop. This is one exceptional benefit, but it concurrently makes it difficult for companies to carve out a place in a crowded market. Sites that put little effort into differentiating themselves are doomed to be ignored and passed over. With so many available options and similar offerings, customers can simply go elsewhere for a better deal or a nicer website.
Businesses should focus on showing customers why they are different, and why customers should buy from them instead of competitors. The regular consumer will not stick with a company long enough for a lengthy pitch. Instead, a well-designed website, catchy marketing, and better deals are ways to quickly stand out from the crowded field.
The key takeaways
Starting an e-commerce business does not have to be difficult, but companies should always be conscious of their decisions. Diving in with an established plan and clear goals can make all the difference between a quick exit and an established, well-loved e-commerce site.