Common Reasons Why eCommerce Business Fails!

Why Does Your eCommerce Business Fail

Entrepreneurs and businesses want to reach customers worldwide, so running an eCommerce business is becoming increasingly common. However, you must plan and act correctly to succeed in the online market.
Surprisingly, up to 90% of online stores fail, and less than 20% of eCommerce businesses succeed. This is a depressing fact that can be scary for people who are starting or running an online business.
Since eCommerce has grown, people worldwide have more choices than ever before when they shop online. However, some things could be improved in the eCommerce world. A shocking 22% of online shops fail in their first year out of business.

If you run an online store, you need to know the most common reasons why your competitors’ stores fail if you want to beat them. By finding and addressing these factors, entrepreneurs and business owners can improve their chances of long-term success in eCommerce’s competitive and always-changing world.
This article will give you helpful information and advice on dealing with the problems and avoiding the usual reasons why eCommerce businesses fail.

Why do Online Businesses Often Fail? 

Reason 1- Marketing Incorrect Goods

A lack of correct understanding and attention to the demands and preferences of the target audience might cause marketing and selling products that don’t connect with potential customers. If a teen-oriented online apparel business promotes dressy clothes instead of fantastic, casual options, it might not be successful.

Reason 2- Excessive Pricing of Products 

Customers may decide not to buy from you if you charge too much or don’t offer competitive pricing. For instance, a web-based electronics retailer that charges a hefty premium for identical products sold on other well-known eCommerce sites would find it challenging to draw in and keep consumers.

Reason 3- Backdated Marketing Strategies 

The online shop’s capacity to attract and retain customers might need to be improved if it continues to use antiquated or unsuccessful advertising methods. Consider an online retailer that ignores the potential of social media advertising and personalized web ads in favour of old-fashioned print ads.

Reason 4- Lacking of Smart Return Policy 

Customers may be hesitant to make purchases due to concerns about the inability to return things if needed, which can be caused by a poorly structured or too stringent return policy. For example, prospective consumers can be put off by an online shop that has a short return policy or charges exorbitant restocking fees.

Reason 5- Poor Shipping Policy 

Customers may get frustrated and look for alternatives due to poor delivery procedures, including slow or unreliable shipping, high shipping rates, or an absence of openness. client dissatisfaction and lost sales can happen when an online store fails to satisfy client expectations, such as with long delivery delays or hidden shipping fees.

Reason 6- Poorly Written Articles

Informational and entertaining written content, such as product descriptions and blog entries, is vital in online retail. Customers may become confused, lose faith, and eventually abandon the online store if the content needs to be revised or better written.

Reason 7- Photo Quality Issues with Products

Online retailers rely on high-quality product photos to effectively promote their offers in the absence of actual interaction. Customer discontent, returns, and distrust in the brand can result from deceptive or low-quality visuals.

3 Ways To Save A Failing eCommerce Business


Way 1- Redefining Your Brand Identity

In today’s competitive market, it’s not enough for a company to have a fantastic product; it must also use branding and marketing to reach its target demographic. Customers may not notice or care about your items if you don’t do this, regardless of how good they are.

Rebranding can effectively reach more people and boost sales if your products are well-received and selling well. Nevertheless, before starting the rebranding process, it is essential to perform comprehensive market research and collect insights. Changing the packaging, the copy or the marketing channels can sometimes dramatically affect how your intended consumers receive and use your items.

Think about a casual fashion business that just opened a store. Nonetheless, they have a large following among members of Generation Z due to impressive sales numbers and positive reviews. Social media influencers targeted advertising and a strategic rebranding effort aimed at a younger demographic boosted brand recognition and sales.

The realization that there was a gap between their original demographic and their newly formed clientele was crucial to their success. They successfully connected with their new audience by accepting this transformation and adjusting their branding strategy accordingly.

Businesses need to be alert to new trends and customer preferences in the ever-shifting world of online retail. Strategic rebranding supported by data-driven insights may revitalise an old product line, open up new markets, and set your company up for success in the long run in the cutthroat digital economy.

Way 2- A Strategic Move for Company Expansion

Before establishing their operations, many entrepreneurs and company owners fail to conduct comprehensive studies and analyses. Because of this omission, they may suddenly discover that their goods are underperforming or that their company plan isn’t working. When this happens, you must step back and look at your company from every angle. To do this, you must determine what is working and what isn’t, what parts of your message connect with your target demographic, and what drives consumer engagement with your offerings.

Strategic pivots can help you build on your accomplishments and fix your shortcomings after thoroughly grasping your company’s strengths and weaknesses. Changing course mid-flight isn’t always a picnic, but it could be your company’s saviour to avoid disaster.

For example, a software company offers a bulk order application for wholesalers at Shopify. Once they started making an impact in the industry, they found out that a good number of client asked about discounts, so they could take further steps to expand their ideas regarding the app.

The business revamped the software’s user interface and functionalities to facilitate communication and cooperation between distributed teams. They have changed their marketing strategies and pricing structures to appeal to remote workers and scattered teams. Their ability to distinguish themselves from rivals, corner a specific market, and subsequently generate substantial growth and client loyalty was all down to this strategy shift.

Their success hinged on their openness to change and ability to adjust their business strategy using data-driven insights. After seeing the merit in shifting their focus from rigidly adhering to their original plan, they saw an opportunity to become the market leader in their newly targeted category.

Changing course quickly and adjusting to new circumstances is essential for success in today’s fast-paced corporate world. You can ensure that your strategy, products, and messaging align with your target audience’s needs and help you remain ahead of the competition by regularly evaluating your business’s strengths, shortcomings, and market possibilities.

Way 3- Recognizing the Value of Specialization

Many companies make the mistake of attempting to meet the needs of everyone in their haste to develop and expand. However, this strategy usually waters down the offers, lowers the quality, and leaves the brand unrecognizable. A company could unintentionally convey that it is not great at anything when simultaneously trying to appeal to too many people.

By contrast, companies can improve the quality of their current products and position themselves as leaders in a particular domain by zeroing in on a niche market. Due to the ability to zero in on an engaged client’s specific wants and needs, niche markets can be highly effective and profitable for companies to grow.

A restaurant that offers a wide range of dishes to cater to a diverse customer base would be one good example. However, they soon discovered their efforts led to poor quality and dissatisfied customers. Because of this, the restaurant’s founders shifted their focus to delivering authentic regional cuisine exclusively.

They were able to focus all of their efforts and resources on creating a unique dining experience because they narrowed their emphasis. The direct result was acquiring premium ingredients, honing their recipes, and educating their employees to become experts in their field. Consequently, the restaurant became famous for providing an unmatched dining experience in its niche, drawing in a devoted customer base of foodies looking for freshly prepared, authentic regional dishes.

If you move quickly enough while your company is in a precarious position, it may be feasible to turn things around. You have a shot at increasing sales and rescuing your company from certain doom if you pay meticulous attention to product promotion, simplify your corporate structure, and zero in on your core competencies.

Conversely, it’s always possible that you’ll have to start again from the beginning. After exhausting all possible avenues, you have failed miserably in reviving your dormant business. The best action plan is closing down and starting with the lessons you learned from your failure. There are many cases of companies that were about to fail but remarkably turned things around and made huge profits. For example, Starbucks experienced a drop in sales in the early 2000s. With a strategy to turn things around, they battled back.

Businesses can benefit significantly from embracing focus and niche specialisation when differentiating themselves, improving their offerings, and building a loyal customer base. A company can achieve long-term success and sustained growth by specializing in its core competencies and becoming an authority in its field.

Bottom Line 

Don’t let the high failure rate of eCommerce discourage you. If you want your online store to succeed, you need to avoid typical mistakes like bad marketing and unhelpful customers.

Awareness of typical traps, such as ineffective marketing or poorly designed websites, is essential for eCommerce success. Firms can achieve sustainable growth if they tackle these difficulties and react to market trends. The secret is knowing what your customers want and need and developing new ideas.


Why do most eCommerce businesses fail?
Lack of comprehensive market research is a significant factor in the failure of eCommerce websites. It is difficult to create successful marketing strategies and meet the demands of consumers without first thoroughly researching the industry, one’s competitors, and the intended demographic.

Which is a major problem with eCommerce?
One issue with eCommerce that cannot be overlooked or disregarded in today’s digital age is data security. Data breaches and identity theft have emerged as significant worries for customers due to the proliferation of online retailers.