Top 5 Things E-commerce Entrepreneurs Find Most Challenging
Up to 80% of e-commerce businesses fail!
All entrepreneurs experience obstacles in their businesses at some point or another. However, when it comes to e-commerce, things get much more complicated. The realm of e-commerce presents its own set of difficulties.
When you consider that up to 80% of e-commerce enterprises fail, you can see how harsh this market can be to those who are unprepared and unaware.
Fortunately, this is a sector with a lot of potentials. In recent years, global e-commerce consumption has surpassed $2 trillion. Moreover, analysts expect that by 2021, it will have reached $4 trillion.
This article will discuss some of the most common challenges that e-commerce companies face. If they can overcome these obstacles, the journey ahead will be much easier.
#1: TECHNOLOGICAL DIFFICULTIES
The convenience of not dealing with the hassles of running a physical business is sometimes the appeal of e-commerce. However, do not be deceived; the technological challenges of running an internet store can be excruciating.
a) Fundamental Concerns
E-commerce stores are often confronted with technical issues.
- The speed of the website
- Server upkeep and maintenance
- Database constraints
- Data privacy and security concerns, and so on
Technical challenges aren’t merely inconvenient. Ever the tiniest technical issue with your website might cause you to lose many prospective long-term consumers before they’ve even given your company a chance.
According to a recent Google survey, 53% of smartphone users will quit a website if it takes three seconds to load.
This is why e-commerce business owners should carefully choose and test their service providers. The hosting service and support must be of the highest quality.
Having a safe and reliable IT support system in place from the beginning aids in the smooth running of the performance.
b) Lack of Integration between Operational Systems
E-commerce businesses use data management systems that span numerous departments. It could be disastrous if these systems are not adequately integrated.
It’s a massive chain that starts with receiving orders, checking client information, then moving on to the physical side of organizing and packing things and getting them out on time.
Every team and procedure should be streamlined to ensure that everyone is on the same page.
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#2: ATTRACTING AND RETAINING CUSTOMERS
E-commerce sites may require a different approach to mastering the sales funnel.
a) Attracting the Customers
Getting the attention of potential customers in an e-commerce store is very different from getting the attention of potential customers in a physical store.
These customers are unlikely to come upon the store by accident when wandering along the street or in a shopping mall.
To attract customers to your online store, you’ll need a solid marketing approach incorporating various ever-evolving digital techniques.
It’s crucial to remember that launching a business is less challenging than generating leads and customers. That is why the marketing department is continuously looking for new opportunities.
b) Converting Site Visitors into Sales and Leads
With e-commerce conversion rates ranging from 1% to 3%, getting potential leads to a site is only half the battle.
To keep the average online shopper’s attention and close the deal, an e-commerce site requires deliberate design and optimization.
c) Retaining Customers
There is no shortage of rivals. Customers flee at the first sign of technical or logistical discomfort. Therefore e-commerce businesses must engage in creating client loyalty.
It is critical to respond to each customer’s voice.
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#3: SECURITY
Security is a significant issue that many internet clients have.
Customers are cautious of it, but e-commerce enterprises want to deliver a risk-free shopping experience for their customers.
In the e-commerce industry, consumer fraud is on the rise, with US retailers alone losing $32 billion in 2014.
E-commerce business owners can combat this by educating customers about fraud and establishing customer and payment verification processes.
Customers should only be asked for the necessary information to complete the transaction. Using the most up-to-date technological tools, databases should be made more robust.
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#4 CUSTOMER SERVICE
Knowing that 78% of customers will leave a transaction due to bad customer service motivates you to devote extra attention to this area.
This is especially true when this fact is combined with the industry’s fierce competitiveness.
a) Lack of Personal Assistance and Personal Contact
E-commerce enterprises may be at a disadvantage in this area. They don’t have the same face-to-face interaction that physical stores do.
Customers must be able to communicate with e-commerce enterprises regularly.
b) Personalization in Client Liaison
E-commerce thrives on one-on-one consumer engagement, such as sending personalized emails regularly, providing help, and sharing special offers and schemes.
This will necessitate a great deal of attention. Customers in today’s world are astute. They will switch if they do not receive customized care.
#5 LOGISTICS OF INTERNATIONAL OPERATIONS
The new opportunity in the e-commerce business is to tap both local and off-shore customers. However, catering to international clientele is difficult and time-consuming.
a) The Legalities and Logistics of a Borderless Economy
It can be challenging to cope with selling and transporting things across multiple countries:
- Various and complex government laws on cross-border commodities.
- Managing transactions in various international currencies, all of which are subject to constantly fluctuating exchange rates.
- Accounting for and taxation of “stateless income.”
b) Localization and Globalization of Products
While shipping products to an international market increases client reach, it also adds the operational cost of needing to localize products for multiple regions.
To suit the needs of international customers, e-commerce shops delivering to worldwide destinations must constantly strike a balance between localizing and globalizing their items.
c) Shipping Logistics
Shipping may be a pain for both customers and businesses in the e-commerce world. Shipping returns cost e-commerce billions of dollars every year. In a single year, the retail economy in the United States lost $351 billion due to returns.
As opposed to 10% return rates in physical locations, online shopping has much higher item return rates of 30–40%.
Many potential clients are turned off by long shipping timeframes and expensive freight charges. Yet, according to research, 80% of customers regard free delivery as a crucial element in their shopping decisions.
Many aspects of shipping are beyond the control of e-commerce enterprises, such as varied shipping costs, varying shipping laws, and delayed shipping timeframes.
On the other hand, business owners can take steps to adopt wiser shipping practices, lowering these costs to a reasonable level.
d) Staff Management and Collaboration
Most firms struggle with a lack of effective employee communication and collaboration.
It's not easy to keep track of everything when you add several geographical locations, a lack of face-to-face communication, language difficulties, and different time zones to the mix.
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Final Thoughts -
E-commerce produces excellent results because the items and services are more widely available, and e-commerce has impressive results. However, efficiently running it might be a challenging undertaking.
E-commerce companies must invest in their procedures and resources regularly. All efforts are required to maintain a smooth website to supply a product and court client loyalty.
The ability to overcome ongoing bottlenecks defines a brand’s long-term financial success, regardless of its popularity.
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I’m a professional blogger and social media expert. Emerging technology and advances pique my interest. When he’s not working, you’ll find him listening to music or reading about technology.
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Any earnings or income representations are aspirational statements only of your earning potential. There is no guarantee that you’ll receive the same results or any results at all. Your results will depend entirely on your work ethic, experience, etc. As always, there is a risk with any business. I am not a financial advisor, and nothing in this video should be considered legal advice.
