Technology has been changing business for a long time now, but recent developments are particularly groundbreaking. A new survey from MarketingSignals reported that the unfortunate truth about e-commerce businesses is, 90% fail within the first 4 months of starting up. In contrast, the survival rate of the first YEAR for brick and mortar stores is 78% according to the Small Business Administration. In other words, almost 8 times more brick and mortar stores live to see their first birthday than e-commerce sites do. Let’s identify why there are so many E-Commerce failures.
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Why Is There SUCH a Stark Difference?
One word. Marketing. According to MarketingSignals, “Poor online marketing performance coupled with an overall lack of search engine visibility [was the reason for market failure].” In simple English, if people don’t know you exist, how can they buy from you?
It’s probably fair to assume that most people don’t think all you need to do is put an e-commerce plug-in on your website, and you’re golden, but few probably realize the amount of effort and resources (time and/or money) required in order to be successful. The survey points this out.
What Causes E-Commerce Failures?
Nearly 4 out of 10 new businesses failed because of poor online marketing. When you look across the top 10 reasons for e-commerce failure, the top 6 are all marketing related.
The top ten reasons why e-commerce startups end in failure:
1. Poor online marketing – 37%
2. Lack of online search visibility – 35%
3. Little to no market for their products or services – 35%
4. Running out of cash – 32%
5. Price and cost issues – 29%
6. Got outcompeted – 23%
7. Retail giants dominating a large share of the market – 19%
8. Lack of customer service – 16%
9. A poor team – 14%
10. Product mistiming – 11%
How to Avoid E-Commerce Failure
“Many tools can be used to increase their [businesses] brand awareness and search visibility in their first few days and weeks, where consumer trust and loyalty hasn’t yet been established.”Marketing Signals
Unfortunately, they weren’t as forthcoming as to say where. We’re not surprised. In fact, our experience has been that there are no quick fixes. You need to be careful. It’s very easy to get ripped off if you don’t know what you are buying. In our post, “Google Small Business Portal – Marketing Gimmick or Value-Add”, we show how even large companies are willing to take your money.
In the end, we found you really do have to put in the hard work. You need to educate yourself on the fundamentals of digital marketing. You can find some great courses offered through SCORE or the SBA. We highly recommend you take a least one of them before you start your business. You might want to consider a mentor or hiring an agency or a consultant to help.
Rome wasn’t built in a day. Neither will your e-commerce business. However, you can put in the work, find the right support, and avoid the scammers to be one of the E-Commerce success stories instead of an E-Commerce failure.
At ProStrategix, we know you have concerns. We’re designed to help give you the business support you need so you can focus on doing what you love. If you would like to learn about how we might be able to help you, please contact us.