Starting an ecommerce business can be life-changing, but that change isn’t always for the good. Just one wrong decision can see a business fail before it’s even truly begun.
Luckily, there are many who have walked this path before and shared their woes. So sprightly entrepreneurial newbies like you can avoid the pitfalls they fell into and go on to thrive. If you want to secure a great start to your enterprise, check out these seven critical mistakes that kill new ecommerce businesses.
Overspending On Warehouses Not Savvy Fulfillment Options
Locking yourself into an expensive warehouse lease and fulfillment costs before you have any cash flow is a big mistake. Consider something more flexible and cost-effective, like the best 3PL warehouse providers in your area. They enable you to scale your inventory management without having to commit to sky-high costs and lengthy contracts.
Ignoring Long-Term SEO Strategies
If your business does not rank on search engines, you are missing out on free advertising to the many, many search engine users across the globe. Optimize your content so that people see it when they search for you or the products you sell. It’s a basic starting point to get your young business out there.
Poor Customer E-commerce Website Experience
Nearly half of all customers will leave a website if it takes more than three seconds to load. Even if it takes more than a second, many customers will consider that to be a poor website experience. This can then impact their likelihood of spending money with you.
This proves that a strong, well-designed, quick-to-load website is a great investment as an entrepreneur. It’s certainly not an area to skimp on.
Being Too Hot Out The Gate With CAC
Many entrepreneurs will invest a lot up-front on their customer acquisition costs (CAC) with paid ads, social media influencer paid posts, and other brand recognition tactics.
A good metric to keep in mind here is that the customer’s lifetime value needs to be around three times higher than their acquisition value, but their lifetime value is hard to know as a starter business. For that reason, it is important to be a little more prudent with those CAC costs while you don’t know the customer’s CLV.
Poor or Unclear Return Policies
Around two in five consumers feel that the ease of returning a product is of high importance when they make a purchase, and they will check the policy before buying. Satisfy consumer needs by creating and communicating a strong, competitive, and importantly—legal—return policy that is clear and followed by all your employees.
Forgetting About Customers After They Buy
The journey of the customer does not end when their product is delivered. By neglecting them after they buy, you risk losing their future business, and any important information they can give you to improve your business, like a review. Follow-up emails, phone calls, and care for every customer is essential to ensure their CLV is maximized.
Ignoring Those E-commerce Analytics
KPIs must be tracked. Otherwise, you have no idea what is working and what isn’t. Track all the information you possibly can, including abandoned carts, newsletter signups and average order value. Armed with this info, you can create an informed, impactful business strategy moving forward.
Avoid Mistakes and New E-commerce Business Soars
Ecommerce has never been about the products alone. It is also about clever, well-thought-out business decisions. Avoid the seven mistakes above so you can strengthen your chance of business survival, and hopefully, see your entrepreneurial dreams come true.
