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Custom Software Solution

2012-04-19 14:31:01

Setting up your eBusiness - series

A: Last month, with assistance from www.ecommerceoptizimation.com and other sources, we talked about the top reasons why online retailers are successful. This month we will talk about the top reasons why online retailers might fail. Many startup and beginning merchants sometimes wonder what some of the most common reasons are that eCommerce retailers may fail in their attempts to successfully launch and grow an Online retail business. Why is it that some succeed where others have failed? What am I doing wrong that they are doing right, or vice versa. This article is meant to outline many of the common reasons why retailers might fail selling online. Remember, the merchants who have failed selling Online probably wouldn’t have had they known what to learn in the first place and what to expect from an online retail business. Generally, the merchants who are not successful probably failed to either conduct quality market research, didn’t understand their customers, overlooked competitor researching or just didn’t learn very much about how retail online works before jumping in. Fails to Conduct Market Research Perform as much quality research about your potential market as possible. Conduct research on competitors, consumer demand, product performance, target market and anything else you can think of that might give you an edge over your competition. Knowing everything there is to know about your market can be the difference between eCommerce success or failure. Fails to Understand Customer Needs In addition to knowing your target market, you’ll need to know equally as much about your customers’ needs. Understanding customers’ needs can be important if you hope to develop and improve your products or site to cater more towards a specific group or demographic of customers. Researching consumer markets and knowing about the ones you target can be the difference between eCommerce success and failure. Fails to Research Competitors Knowing as much about your competitors as possible will help you to understand what you will need to overcome in order to remain in a certain market and sell competitively. Learn about their marketing initiatives, who they target, what makes them successful and anything else you can use to learn from their time selling Online. Knowing about competitors can be the difference between eCommerce success and failure. Fails to Understand Retail Online In general, you’ll want to learn all you can about selling online, marketing online, designing a usable site, keeping customers happy, instilling customer trust, engaging customers, who your competitors are, who your customers are, legal issues, Online business issues, market research, pros, cons, success and failure factors and anything else you can possibly think of within your eCommerce niche. Understanding how Online retail works can be the difference between eCommerce success and failure. Fails to Change, Grow, Adapt or Expand During any retailer’s time in business online there will be certain leaps and bounds that should be made. Industries change and grow, customers come to expect more, products change. As time passes, if a business fails to adapt to industry or niche changes it can affect later success and marketing efforts may even go to waste. Failing to adapt to changes or expand and grow when needed can be the difference between eCommerce success and failure. Fails to Find Niche Products Some retailers experience failure right at the beginning by not finding a product niche or industry niche to sell within. Entering an already saturated market when first starting out can create a gap where more work is needed to yield the same type of return as if a niche had been established. Find niche products or a consumer niche to sell in. Not having a niche can be the difference between eCommerce success and failure. Fails to Design a Usable Site Try to consider as many eCommerce design and usability best practices as possible. Create a site that is simply laid out, easy to use and easy to navigate. Display the items you customers want in the places they expect to see them and make it easy for them to buy from there. If customers cannot use your site, or if you design a site that is difficult to navigate, it may be the difference between eCommerce success and failure. Fails to Design an Attractive Site Once the site is usable, you’ll want to include aesthetically pleasing graphics and other design elements that make the site pleasing to look at and attractive to the customers you target. Use vibrant colors and branding elements within your design, keep up on new graphic design trends like gradients and reflections often found on Web 2.0 site designs. Not building an attractive site that looks pleasing to your customers can be the difference between eCommerce success and failure. Fails to Plan Financially Over budgeting and spending too much of a budget in one place can cause many financial issues down the road. Many merchants will budget too little towards marketing and too much towards design, or vice versa. You will want to create a clear plan of where all your finances are to be used and when there will need to be additional finances set aside to continue any of your campaigns or steps. Consider using a financial adviser or someone who has a sense for sound financial planning to help get you started in the right direction. Not effectively planning out your finances can be the difference between eCommerce success and failure. Fails to Provide Customer Service Many merchants succeed at launching their retail business but end up shooting themselves in the foot later by not providing adequate customer service. Some merchants do not plan the time required to deal with customer issues brought up during the Online buying and fulfillment processes. Leaving phone calls unanswered for days, not responding to emails and keeping customers out of the sales or shipping loop can be devastating to any Online business. Be sure to provide quality customer service from the very moment your store launches, it could be the difference between eCommerce success and failure. Fails to Gain Customer Trust Before you can properly service your customers they will need to trust your brand and the site they are purchasing from. Use an active SSL, trust certificates and security badges so that customers who visit your location online are not hesitant to purchase products from your site. Respond to issues or complaints right away and keep customers in the loop regarding any orders or fulfillment. Not gaining the trust of your customers can be the difference between eCommerce success and failure. Fails to Learn About Legal Issues Know where you stand legally. Learn as much as possible about federal, state, county, city or other jurisdictional laws related to your Online retail business. Research what you need to do to become fully legitimate and learn about special taxes or business structuring laws. Consider using a legal adviser or attorney who specializes in the type of law you require assistance with. Not knowing about the laws or legal ramifications about conducting business Online can be the difference between eCommerce success and failure. Fails to Develop Competitive Edge Develop ideas and strategies that will enable you to build a competitive edge within your niche or industry. Formulate new ideas and campaigns that help you to stand apart from other competitors. You can gain an edge through marketing initiatives, branding ploys, link bait, contests, prizes, special offers and more. Anything that can assist in gaining that edge over competitors is worth exploring. Not developing unique ideas to build a competitive edge in business can be the difference between eCommerce success and failure. Fails to Commit Fully in Business Don’t second guess yourself and the decisions you make in business. Not knowing the answer and taking certain risks is OK, but the second you start wondering, if something is going to work, you’ll likely find it is already failing. Be positive and confident in your decisions, if something isn’t working refine it or remove it. Instead of saying to yourself, “is this going to work,” think of it more in a sense of, “when it works.” Having confidence in yourself, your abilities and your decisions can be the difference between eCommerce success and failure. Fails to Track Return on Investment Track everything!! It’s a rule I will always preach and it’s pretty clear why. Without knowing what you are yielding off of spend you won’t know what is working and what needs to be eliminated. Use tracking tools and metrics for all your campaigns (especially marketing spend) so you know what you make off of what you spend on a given initiative. Track off site sales, on site sales, customers, emails, walk-in business, everything. Not tracking ROI affectively can be the difference between eCommerce success and failure. Fails to Price Products Competitively Knowing what your competitors are charging for the items you sell will help greatly when deciding on how to price the products you sell. Keep prices competitive, don’t overshoot and don’t charge to little. Use sources like comparison shopping engines and eBay to see what others are asking for the same types of items. Be flexible and consider changing prices during changes in the market trends or niches. Not having prices that are competitive in the market you sell within can be the difference between eCommerce success and failure. Fails to Sell Quality, Unique Products In addition to finding a niche, you’ll want to be sure that the items you sell are indeed quality, unique products that are in high demand. If you sell items that are manufactured poorly and end up breaking upon delivery or first use, you’ll have a harder time becoming known as one of the best in your niche. If you sell the same thing as many others, in the same manner, within the same channel, you’ll find it harder to reach your selling goals. Selling items that are quality and unique can be the difference between eCommerce success and failure. Fails to Remain Passionate, Looses Focus The biggest reason why many Online retailers are not successful is that they fail to remain passionate about their niche, product or customers. In addition, if the merchant loses focus on the main goals of the business or gets side-tracked, it can be harder to overcome the difficulties of selling Online and may hinder any chances of future success. Stay positive, don’t lose focus of why you started the business, try not to let frustration get you down on yourself, remember others have dealt with the same issues. Don’t be your own worst enemy, stay positive and remain passionate about your business, products and customers. Loosing focus or passion can be the difference between eCommerce success and failure. Next month, we will talk about exploring the potential of your online business and operation of the same.