How to Start an eCommerce Business: Mistakes, Challenges, How to Handle Them
In the dynamic world of eCommerce, both new and seasoned merchants face a variety of challenges and can easily make common mistakes. Whether it’s struggling to build a customer base, lacking web traffic, or simply feeling overwhelmed with tasks, we’ve got you covered. This article outlines the prevalent challenges and mistakes in the eCommerce industry and offers practical solutions to navigate them effectively. Updated for 2023, we’ve also incorporated cutting-edge insights from HubSpot’s latest report on emerging trends such as AI, offering a more comprehensive guide. [Download the full HubSpot report from an official website here.]
Challenges in eCommerce
#1: Building a Customer Base Beyond Friends and Family
One of the most emotionally taxing and logistically challenging aspects of running an eCommerce business is the initial phase where your customer base comprises mainly friends and family. Nobody knows about your eStore and products you are selling. The overwhelming questions here are:
- Where do I find new customers?
- How do I convince them to buy from my store?
- How to increase the visibility of my store?
How to Overcome It:
- Know Your Audience:
- Importance: Before someone discovers your product, you need to discover this person. You can’t target everyone; specificity wins in eCommerce. According to a study by Accenture, 91% of consumers are more likely to shop with brands that provide relevant offers and recommendations.
- Action Steps: Create customer personas, conduct surveys, and use data analytics to refine your target audience.
- Unique Selling Proposition (USP):
- Importance: In a crowded eCommerce space, having a unique product or story can differentiate you from competitors.
- Action Steps: Find what makes your product unique and focus your marketing messages around that. Can’t compete with Amazon? Don’t—differentiate.
- Implement a Referral Program:
- Importance: Word-of-mouth is a powerful tool; Nielsen reports that 92% of consumers trust recommendations from friends and family above all advertising.
- Action Steps: Build a simple but effective referral program rewarding existing customers for bringing in new ones.
- Personalize and Tell a Story:
- Importance: People like to buy from people. A genuine story behind your product can engage your customer emotionally.
- Action Steps: Use storytelling in your marketing content, focusing on what makes your product or brand special and genuine.
- Leverage High-ROI Channels:
- Importance: Channels like newsletters and social media offer a high return on investment (ROI). For example, according to Campaign Monitor, email marketing has an ROI of $44 for every $1 spent.
- Action Steps:
- Newsletters: Regularly send out newsletters with valuable content, offers, and product news.
- Social Media: Utilize Instagram, Facebook, and Twitter shopping tools to showcase your products.
- SMS Marketing:
- Importance: As you pointed out, SMS marketing is a viable channel with high engagement rates. According to a TextSanity study, the open rate for SMS is a whopping 98%.
- Action Steps: Collect valid phone numbers and segment your customer base to send personalized SMS messages.
By embracing these strategies, you move beyond the limited circle of friends and family to create a thriving and expansive customer base.
#2: Low Web Traffic
You’ve just started, so search engines don’t know yet that you exist. To attract potential customers, you will need to put some considerable effort to bring in traffic and strengthen your eCommerce store’s presence.
How to Overcome It:
Search Engine Optimization (SEO):
- Importance: Organic search remains the largest driver of web traffic, with research from SEMrush showing that organic search accounts for 51% of all website traffic.
- Action Steps: Start with keyword research, optimize your website’s metadata, and create high-quality, SEO-friendly content. Look into backlinking strategies and regularly update your website with new content.
Invest in Content Marketing:
- Importance: Content marketing offers a way to organically attract a targeted audience. It provides value, and in turn, enhances brand loyalty.
- Action Steps: Develop a content calendar, and focus on blogs, how-to guides, and educational videos related to your product or industry. Share this content on social media and other platforms to increase reach.
Utilize Social Media Advertising:
- Importance: Social media platforms like Facebook and Instagram offer targeted advertising, making it easier to reach your potential customers.
- Action Steps: Experiment with different types of social media ads, from story ads to carousel ads, focusing on the ones that bring the most traffic and conversions.
Pay-Per-Click (PPC) Campaigns:
- Importance: PPC is a quick way to get your website in front of potential customers, albeit at a cost.
- Action Steps: Focus on highly relevant keywords and set a reasonable budget. Monitor your campaign’s success and adjust strategies as needed.
Analyze and Tweak:
- Importance: It’s essential to continually analyze your web traffic data to understand what’s working and what isn’t.
- Action Steps: Use tools like Google Analytics to track key performance indicators (KPIs). Make necessary adjustments to your marketing strategies based on these analytics.
#3: Juggling Multiple Responsibilities and Roles
The first concern for many aspiring entrepreneurs lies in the technical aspect of setting up the store or customizing a page or two. They are under the illusion that if they can overcome these issues, the rest is piece of cake. However, it’s just one of the things you’ll be doing. People who are rookies to online business (or to any business), generally don’t know a thing about accounting practices, marketing, shipping, return/refund/exchange policies and procedures, UX and design and…oh, please, stop.
According to a survey from SCORE, 39% of small business owners report working over 60 hours a week. This statistic reveals the extent of the challenge, highlighting the need for effective task management solutions.
How to Overcome It:
Learn the Ropse:
- Importance: You need to be aware of the coming tasks beforehand.
- Action Steps: Before you start your journey into eCommerce, you need to come up with a list of all the things you need to learn at least the basics: business legalities, type of entity, taxes, returns/refunds/exchanges/complaints, customer service needs, drop-shipping or supply issues, etc. Alternatively, if the DIY approach isn’t your weapon of choice and you have funds, you may resort to finding a technical/marketing partner who will make these tasks for you.
- Importance: Without a clear hierarchy of tasks, you might end up focusing on less impactful activities, leading to decreased productivity and increased stress.
- Action Steps: Use tools like to-do lists or task management software to prioritize tasks. Identify the top 3-5 most critical tasks each day and tackle those first.
Automate What You Can:
- Importance: Automation can take repetitive tasks off your plate, freeing up valuable time.
- Action Steps: Look for eCommerce platforms that offer built-in automations for inventory management, customer communications, and other processes.
Delegate or Outsource:
- Importance: You can’t do everything yourself, and trying to can lead to burnout.
- Action Steps: Hire temporary or part-time staff for specialized tasks that you’re not skilled at, or consider using freelancers.
Invest in Learning and Training:
- Importance: The more you know, the more efficiently you can operate. Upgrading your skills can make you more capable and less stressed.
- Action Steps: Dedicate a few hours each week for learning. This could be tutorials on how to use your eCommerce software more effectively or courses on digital marketing.
By implementing these strategies, you can manage your tasks more effectively and reduce the feeling of overwhelm that comes with running an eCommerce business. This leads to not only a healthier work-life balance but also a more efficient and successful business operation.
#4: Keeping Up with the Ever-Changing eCommerce Landscape
In the fast-paced world of eCommerce, staying current with trends and technologies is not just an advantage—it’s a necessity. Marketers and business owners find themselves in a perpetual race to adapt to emerging channels and technologies. According to a hubspot study, 90% of marketers using short-form video plan to increase or maintain their investment this year, illustrating how crucial it is to adapt. Failing to adapt can mean falling behind in the race for customer attention.
How to Overcome It
Invest in Trending Channels
- Importance: In the digital age, consumer behavior changes rapidly. Ignoring emerging channels like short-form videos or TikTok can result in lost opportunities for reaching new audiences. For context, 56% of marketers plan to ramp up their investment in TikTok this year.
- Action Steps: Diversify your marketing strategy to include newer platforms. Experiment with short-form video content and consider investing in a TikTok marketing campaign.
Keep an Eye on Emerging Technologies
- Importance: New technologies can offer innovative ways to engage with customers. Staying updated is non-negotiable; video has the highest ROI of any media format for the fourth year in a row.
- Action Steps: Stay abreast of the latest technologies through webinars, industry reports, and news. Consider how new technologies can integrate into your existing operations.
Address Social Issues
- Importance: Modern consumers often choose brands that align with their values. Addressing social issues not only boosts your image but can also drive engagement. It’s noteworthy that 43% of marketers are addressing social issues in their campaigns.
- Action Steps: Develop campaigns that focus on social issues that align with your brand values. Make sure to do so authentically to avoid backlash.
Ongoing Learning and Skill Development
- Importance: The eCommerce landscape is constantly changing. Investing in ongoing education can give you a competitive edge.
- Action Steps: Take courses, attend webinars, and read up on industry trends regularly. Keep your team updated on the latest best practices.
Monitor and Measure
- Importance: Without tracking, it’s hard to know what’s working and what’s not. According to industry metrics, video has an ROI that’s 25% higher than other media formats. Use analytics to assess the ROI of your investment in new technologies and channels.
- Action Steps: Use tools like Google Analytics and native platform analytics to monitor KPIs. Adjust your strategy based on the data you collect.
#5: Navigating the Data Privacy Maze: Secure Your Business and Build Customer Trust
Data privacy is a hot-button issue that impacts both consumers and businesses. With recent regulatory changes and growing consumer awareness, data privacy is not just a legal obligation but also a competitive differentiator. As a testament to this impact, 86% of marketers report that data privacy changes have significantly influenced their marketing strategies over the past year. If that wasn’t compelling enough, 85% of marketers say their activities are reliant on third-party cookies, which are increasingly scrutinized.
Are Third-Party Cookies in Chrome Ending?
Yes, the era of third-party cookies is coming to a close. Various browsers have been phasing them out for years, and Google Chrome will discontinue support for third-party cookies by the end of 2024 as part of their larger Privacy Sandbox strategy. Google Consent Mode was introduced in September 2020, allowing your website to operate all Google services based on end-user consent. This change underlines the importance of adapting your data collection and analytics strategies.
How to Overcome It
Transition to Privacy-Preserving Methods
- Importance: With Google Chrome phasing out third-party cookies, relying on them for customer data is no longer sustainable. Adapting to more privacy-preserving methods is crucial for compliance and customer trust.
- Action Steps: Transition to first-party data collection methods or more privacy-preserving APIs. Invest in technologies that offer robust data security while still providing actionable analytics.
Stay Updated with Data Privacy Laws
- Importance: Ignorance is not bliss when it comes to data privacy. Regulatory changes can come with hefty fines, and consumers are more likely to trust brands that protect their data.
- Action Steps: Keep a close eye on changing data privacy laws, including GDPR, CCPA, or other local regulations. Adjust your data collection and storage policies accordingly.
Regularly Update Privacy Policies
- Importance: With 86% of marketers stating that data privacy changes have impacted their strategies, updating privacy policies is not just a one-time event but an ongoing process.
- Action Steps: Regularly review and update your privacy policies. Make sure they are transparent and easy for your customers to understand. Seek legal counsel to ensure compliance.
Educate Your Team and Customers
- Importance: Data privacy is a shared responsibility. Your team should be aware of best practices, and educating your customers can differentiate you from competitors.
- Action Steps: Conduct data privacy training for your team. Create content that educates your customers about how you’re protecting their data and why it matters.
Auditing and Compliance Checks
- Importance: Regular checks can prevent potential mishaps and show you where your vulnerabilities lie.
- Action Steps: Use auditing tools or hire a third-party auditor to ensure that you’re following all data privacy protocols. Make any needed adjustments promptly.
Common Pitfalls in Digital Marketing and How to Avoid Them
Navigating the ever-changing digital marketing landscape can be challenging, and even the best of us make mistakes. Here’s a quick overview of some common pitfalls and how to avoid them:
#1: Ignoring Mobile Users
Many businesses focus solely on desktop users, overlooking the rise of mobile messaging and SMS in marketing, a channel that can increase conversions by 21% when used in automated marketing workflows.
How to Avoid It
Optimize your website for mobile users and incorporate SMS into your marketing campaigns.
#2: Lack of Investment in Customer Service
Everyone is aware that providing a decent customer experience in a timely and professional manner is crucial to the success of your eCommerce store. Because even if you run a business, you’re a buyer yourself. So everyone knows that. Still, even now, it isn’t working as it should. Despite tons of advice, blog posts, and failure stories…As a matter of fact, I’m writing this part of the post and smiling: I’ve just remembered how I was trying to purchase an item from a store two days ago, but it was a complete disaster. I asked a question related to this particular item, the guy from the support told me to wait a sec and….disappeared. I spent approx 30 minutes time waiting and eventually bought the same item from their competitors.
Underestimating the power of customer service in the digital age. A study by Microsoft revealed that 97% of Americans consider customer service as a factor in deciding to engage with a brand.
How to Avoid It
Invest in excellent customer service, including adopting emerging channels like social media DMs, a method 29% of marketers already use, and an additional 15% plan to implement this year.
Multi-channel customer service is the key here. By taking advantage of different tools, you can make sure that you’re able to cover all questions which may arise. So expand your support channels with:
#3: Ignoring SEO and Content Marketing
Assuming that paid campaigns are sufficient and neglecting SEO and content marketing, areas where 88% of marketers plan to maintain or increase investment.
How to Avoid It
Incorporate SEO and content marketing into your long-term growth strategy.
#4: Rushing for Immediate Results
You invest your time and efforts, so naturally, you want to have some reward. Why not take advertisement as an example. Let’s pretend you launched an AdWords campaign. You spent some money, and you wait for the hordes of customers to invade your store. A couple of days pass, and you understand that nothing has changed. Zero. You’re frustrated and you decide to terminate your campaign (with a ringing “I will not waste any money on it in future” line in your head). However, it’s a mistake.
Impatience often leads to terminating campaigns early, overlooking long-term growth strategies like SEO and content marketing. Speaking about paid advertisement, even Google suggests that an average return of $2 in revenue for every $1 spent on Google Ads is achievable, but not overnight.
How to Avoid It
Patience is key. Be willing to fine-tune your campaigns for long-term effectiveness. You have to keep a constant eye on your campaign, experimenting with keywords (for example using keyword rank tracker) and implementing ad extensions. Moreover, you have to understand that a click does not necessarily mean a sale. Again, take your time and find the perfect combination for your business. You will do it!
Start Your eComemrce Journey with SumatoSoft
SumatoSoft is a reliable outsourcing software company. We have a talented software development team ready to develop your eCommerce store! After more than 10 years on the market of ecommerce development services, we have become a reliable technical partner to our Clients. Among more than 200 projects we undertook, 98% of our Clients were satisfied with the quality of the custom software development services we provide. And 70% of our Clients come back to us with another project. At SumatoSoft, we help companies to digitalize their businesses by providing relevant software solutions. Contact us, and we will tackle your projects in days!
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