With Shopify, setting up an online store is not a difficulty and doesn’t require a great investment. Selling online can be a big moneymaker because of its low cost including: no rent and utilities of a real store.

However, running an online business or offline business won’t guarantee profit. It’s not so easy to attract new customers and sell them your products. Indeed, 80% of entrepreneurs starting an e-commerce site fail within the first 18 months. What are the reasons for this colossal failure rate?

Although each business has its own essense, we will introduce you some common reasons for this failure. If you understand these factors, you should know what makes your ecommerce succeed.

Mistake #1: Too competitive market

Product is the core issue of any business. What should you sell? – the first biggest question of any storeowner. Many people come up with selling either T-shirts, girl clothing, shoes, or bags when thinking about starting an online store. You know what? Although these markets are easy to join, they are ultra competive ones.

So what is the impact of choosing a competitive market?

• You may never appear in search engines because of competitive keywords in that niche.
• You are new late comer so you might have to compete by lower price, which means less profit.
• It is hard to be better than the old one. There is narrow space for you stand out.

You know the equation of selling:

Profit = Demand * (Revenue – Expenses)

If you come to a niche that is too narrow, there won’t be enough customers. If you pick a niche that is too broad, you’ll have too much competition.

Ideally, you had better pick a product or set of products that isn’t readily found in brick and mortar stores and doesn’t have a lot of online competition. More importantly, there should be enough demand for you to make profit that meets your business goals.

Most people pick a niche that they are passionate about but they don’t take into account the potential profit. These entrepreneurs find it hard to have customers and barely make any money.

Mistake #2. Lack of Customer Service

What is customer service in ecommerce when you don’t have sale representative to speak to customer face-to-face? Customer service is the support you offer your customers — both before and after they buy your product — that helps them have an easy and enjoyable experience with you. It’s more than just providing answers; it’s an important part of the promise your brand makes to its customers.

What happen if your business is lack of customer service? Customer requests are answered slowly; Customers don’t know how to contact you; When customers have problems with your product, they will be frustrated if they dont’ receive support from you.

Let’s see the impact of poor customer service:

Decline of Word-of-Mouth Sales

Customers have tendency to discourage other people to purchase from the company that they have negative experience with product and service. This is very dangerous because it marks down the brand image and finally could lead to a finanacial problem of your business.

Decline of Repeat Customers

You know that it costs less to retain current customers than it does to attract new ones. If you offer good products as others but you have superior service, you can keep customers. If a company has to spend a constant portion of their operating budget on  attracting new customers, it can lead to a cash flow problem.

Mistake #3: Don’t know your ideal customers

After you do research on products, you come to hunt for customers. Most people know the statistics about their customers but the step that many don’t consider is to visualize the ideal customers and profile them.

If you dig deep enough, you will find that niches have niches within them. The more you can target, the better, since it will be easier to identify with your customer’s needs.

Customer understanding is also meaningful when you use information to tartget customers in facebook advertising.

Mistake #4: Lack of A Marketing Plan

“Fail to plan, plan to fail”

When you already know who your customers are, setting up a marketing plan should be easy. If not, it seems like you are walking in the dark. You do one thing one day, and some other thing in other day. You don’t have strategy to focus your resources on.

While every ecommerce store should have a well-rounded marketing plan that covers all bases, some channels will obviously be more effective than others. For some businesses, SEO is good but for others, social media is better.

Giving customers free gifts is also a good marketing strategy when you are just starting out.

Whatever your plan is, don’t forget to track it then have suitable in time adjustment.