Common Mistakes When Starting an eCommerce Business

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As consumers, we crave convenience. This is one of the main reasons for the rise of the eCommerce industry and the soaring of online sales. More and more entrepreneurs are trying their hand at selling products or services through their own websites or online platforms, moving away from traditional brick and mortar stores.

It’s an enticing opportunity for businesses, with a lot of potential to further their reach, showcase their brand and make more sales. If you’re selling online, technically almost anyone in the world is a potential customer, and merchants that invest in technology can more easily scale their business at a later stage. It’s easy to begin to envision your fortunes with a seemingly unlimited audience, but let’s get one thing straight: eCommerce isn’t a venture for the faint-hearted. It’s a hard industry to crack. There are so many eCommerce businesses that fail due to poor preparation and planning, often launching before they’re ready.

In this article, we’ll discuss some common pitfalls to avoid when starting out.

8 eCommerce mistakes to avoid and how to overcome them

1. Forgetting to do your research

Before launching your online shop, you’ll need to have a good understanding of your profitability. This is calculated using the following formula:

Profit = Demand x (Revenue - Expenses)

Spend some time researching your market demand (finding a product), and who your audience is (customers). Ask yourself what the consumer needs or wants, and position yourselves accordingly. Conducting some financial analysis at an early stage will save you a lot of trouble later on. To calculate your profitability you’ll need to take into account all your extra costs such as marketing, production, listing fees and commissions. This research should feed directly into your product pricing. Moreover, you’ll want sound knowledge of other competitors in your industry and should also have a good understanding of the online space for your own eCommerce site.

2. Choosing the wrong product

Initially, it’s much safer to stick to a few flagship products. The products you choose to launch on your eCommerce store should be backed up with the knowledge that there is demand for these. Avoid starting out with extensive ranges and an overload of categories. Many merchants make the mistake of adding too many products to their online shop in the early days, with the hopes that they’ll appeal to more customers that way. If your product range is vague and extensive, you’ll struggle to resonate with a specific customer persona. If your range is too broad, you might actually have the opposite effect: your branding may appear vague and inconsistent, and your SEO will struggle to land in the rankings.

3. Choosing a bad eCommerce platform

When you’re starting out, it’s particularly important to choose a reliable web host so that consumers have a smooth user experience when shopping on your site. Merchants who choose to set up their online store with a dedicated platform such as Shopify can rely on superlative hosting services. If you’re running your own eCommerce store, page loading speed is essential. Merchants anticipating high levels of traffic, particularly those planning flash sales, should partner with a dedicated server to prevent any disruption to the user experience.

4. Rushing your branding

Most entrepreneurs are hungry for success and itching to get started, which is great. In some instances, however, they skim over their branding, resulting in a lack of brand identity and USP. Don’t compromise on things like your domain name, as this is virtually impossible to separate from your business at a later stage. You’ll also need to think about the future. Yes, at the moment you might just be selling handbags, but further down the track, you might want to introduce other leather goods to your e-commerce store such as shoes, belts and jackets. You don’t want your domain to limit you to ‘just a handbag shop’. Domains that stand the test of time will reflect what you’re selling now, but also embody your offering in the future. The best domains pick up on an aspect of the product you’re offering and contribute to your SEO.

5. Ignoring feedback at an early stage

Once you’ve done all your preparation and fully transitioned into the eCommerce world, your sales will (hopefully!) be on the rise. Order fulfilment is very time consuming and it will take a while to get used to your supply chain. Don’t forget to spend some time collecting insights about your product performance and customer experience. Feedback is invaluable at this stage, so find out how customers are locating your website, what they think of your brand, and if they’re likely to recommend you to a friend. Staying in close contact with consumers post-purchase is one of the best ways to ignite repeat purchases. Set up a push notification is a great way to collect reviews and testimonials. Make sure you’re segmenting email lists so that you can contact the right customers with relevant, useful information. This way, you’ll be much more effective at keeping in contact and building relationships with your customers.

6. Neglecting customer service

If you’re a small business, you’ll need to work even harder when launching your eCommerce store in order to satisfy your customers and uphold your reputation. Customers have high expectations, especially if they’re choosing you over a more well-known eCommerce store. It’s your job to prove why you’re a contender and can offer a superlative service. The best eCommerce stores provide contact information and multiple contact options in to order to meet each customer’s personal preference. By providing strong communication through social media, online chat, email, as well as an extensive FAQ page, you’ll reassure your customers. Answering a customer’s question can act as the final push to reassure them and convert them to purchase something from your site.

7. Giving too much for free

Everyone loves free stuff, and when executed correctly, online contests and giveaways can be an amazing strategy to increase brand exposure, but they’re not always the most effective way to drive sales. You’ll need to calculate if free sampling is worth it for your business: misjudging how many sales your giveaway will secure is a costly error.

8. Not delegating tasks

Most eCommerce businesses are conceived by one entrepreneur with very high expectations, based on what they believe is ‘a great idea’. The problem they’ll face, particularly in the early stages, is doing everything themselves. This includes marketing, sales, product design, logistics, customer service… everything. If you’re hoping to scale your business one day, you’ll need a reliable workforce to compliment your new business and prevent you from burning out. Hiring new staff brings on board further knowledge and motivation to fuel your business. Look out for specialists in their respective fields who can champion and enhance aspects of your business that you don’t have the time to work on yourself.

Need help setting up your eCommerce store?

Do you need help setting up your eCommerce store? Elkfox are Shopify experts with all the best tips for getting the most out of your eCommerce site and maximising conversion rates. For more information, get in touch with us!