Why most e-commerce Businesses Fail

failStarting any business, be it Fairfax Tow Truck or any other company is never an easy task.  However, starting an e-commerce business can be relatively easy and fast. Sustaining a business and growing it to prosperity is the main deal. E-commerce businesses have a failure rate of about 80 percent and creating a successful one is even more challenging. Although any business is unique, there are common contributors to e-commerce failures.

If we can understand the common pitfalls to business success, then we stand a better chance to avoid them. Here are common reasons why most e-commerce businesses fail.


No real investment

It is possible to open an online store with a few hundred dollars but that doesn’t mean your capital will be sufficient to cater to the needs of your business. Just like any other business, an online store requires a good injection of cash to support various departments. If you have a brick and mortar business and you are planning of expanding online, think of going online as opening a new location and work towards all the requirements a new business would need. You need to cater for cash flow issues and ensure that you spread out expenses.


Poor management of inventory

Inventory management can cause a lot of problems depending on your business model. If you have too much inventory, you could be crippling cash flow. On the other hand, if you have too little inventory, you could be missing out on sales and disappointing your customers. The point you have to understand is that ordering products are not as easy as many people think. Vendors may be operating at different times meaning that it may take one supplier a few days to get a reorder effected.

A lot of competition

The internet is a land of very many opportunities. However, there are lots of people who are too lazy to innovate, all they want is to copy. This makes the survival of most online businesses to be difficult in the wake of competition. This is one of the reasons new e-commerce stores struggle to survive as they try to sell the very same products offered by major retailers. You need to sell products that are least sold by your competitors. The bottom line is to try to avoid competition as much as possible.

Others issues that affect the success of an e-commerce business include a bad website, poor product photography, no website traffic, no patience among others.

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