Why Some Ecommerce Businesses Fail
The world is business is constantly changing. Physical stores are being replaced by online stores with more and more people preferring to shop online rather than going to a physical store.
There are thousands of ecommerce stores selling products ranging from household items to big machinery. Almost everything is now available on the web, and usually at lower rates.
Forbes recently called ecommerce the future, and most experts seem to agree with the notion. However, still, the success rate is not as high as one would like it to be.
According to estimates, 90% startups fail within the first five years. That’s a very high number, yet the number of people starting an online business is on a constant rise.
One success story is that of Ahmed Mady, CEO at Fab Glass and Mirror, an online store selling glass tops and mirrors.
He started his business only a few years ago, but today it is one of the most known businesses in its niche. How did Mady find such great success in such a short span of time? He says it is all about hard work and proper planning.
We talked to the CEO about online businesses and asked him to highlight why some businesses fail. Let’s have a look:
1. They Market to The Wrong Audience
According to Mady, one major reason why businesses do not succeed is due to their failure to reach the right audience. It is quite understandable why such a thing happens. There are tonnes of users on the web, 3.4 billion to be exact. However, not all of these 3.4 billion users would be interested in what you have to offer.
Let’s assume you sell toys for kids under the age of five. From this perspective, your audience would mainly consist of parents with children under the age of five. You will find success only if you reach to that specific audience. If you market on a whole, a huge marketing budget would go to waste since you’d be trying to sell your product to someone who has no interest in it. As a result, your bottom line would suffer causing you to fail.
2. They’re On The Wrong Platform
Mady recommends to use a mix of marketing platforms, ranging from email marketing to PPC. Contrary to the popular belief, marketing on the web isn’t free. While you can start a website or a Facebook page for free and might even be able to make a few sales without having to spend a lot on marketing, the truth is that you will need to have a proper marketing plan if you really want to hit the roof.
There are several ways you can market on the web, but not all of them would be suitable for you. The right option largely depends on the nature of your business, your target audience and your marketing budget.
For example, marketing on social media has been proven to be beneficial, however not all social media platforms are equally good. For example, Instagram is considered to be an ideal platform to promote products related to fashion and beauty. But, if you promote business related products on Instagram, you will not have the same ROI, eventually resulting in failure.
3. Not Concentrating on Customer Service
“Today’s customers are spoiled for choice. There is no monopoly, and one product is being sold by thousands of stores. The differentiator at the end of the day ends up being how you treat your customers and not what you have to offer,” says Mady.
Think about yourself. Why do you prefer Amazon over Ebay or vice versa? Both stores offer similar products at same rates. You pick one because of the overall experience. Your customers, too, want an overall soothing experience.
You need to provide great customer service. Remember to cater to their needs. This also means to go the extra mile by having customer friendly policies and offering features such as free shipping and discounts. In fact, free shipping is said to be the #1 priority for most online customers.
In a nutshell, marketing poorly and not catering to customer’s needs is the main reason why businesses fail, according to Mady. If you wish to find success on the web, you must be willing to go the extra mile and provide to your customers what they want.