7 Mistakes E-Commerce Startups Make That Leads to Failure

The following article has been written with special contributions from Saad Munir (CEOHexaClicks) and Haris Shahzad (Founder dukandaar.com).

“Startups waste money as well as time in their initial stages on technicalities that have already been taken care of.”

1- Waiting for perfection

A common belief among young Startups is that to launch your e-commerce business, you need to spend a lot of time and money on creating an outstanding website. Well, if you have the right knowledge and right skill set you can start a business simply with a Facebook page or Instagram account. In fact, there are multiple stores now selling products such as makeup items, clothing, shoes, jewelry, etc. through Instagram accounts. Start small and examine the market until you are sure there is sufficient market for your products.

2- Rebuilding instead of using the available tools

Startups waste money as well as time in their initial stages on technicalities that have already been taken care of. For instance, instead of hiring a number of developers and paying them huge sums of monthly salary, startups can use Shopify or other search tools to build an e-commerce store. Shopify allows you to customize your store entirely and it is extremely user friendly. Other tools that you should explore are Referral Candy, Groove, Search Spring, Rejoiner, etc. to list a few!

3- Product hunt

It is often a challenging task for startups to identify the right products to sell. The solution to this is easy, just go for the top trending ones! You could also find out what people are buying from other similar stores, do your own research and find out consumer preferences, visit the local vendor market and explore your options, however, going for the top trending products is a good way to avoid too much risk in the initial stage of your business.

We talked to a few E-commerce experts and here is what they suggest:

Go for the products that are not already being sold online in your region and establish your own market.

These could be products that hold some traditional value and are not easily accessible everywhere, or imported goods that have a market in your country but not many sellers.

You can also pick products that address problems of customers directly.

These are the pain points of customers that you can address and benefit from. So, keep a look out for such products!

Most e-commerce stores sell a number of different products to increase their profit margin, but picking your products wisely can increase your profitability in the longer run.

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4- Not hiring a content writer

This is not a challenge faced only by small scale startups, but also big stores and vendors. Content writers are often ignored and replaced by a technical guy who updates product description based on the little information that he is provided with. However, this is the most critical part for customers. Providing them with the right information about product is necessary in order to make sure they find what they are looking for. Often customers are left unsatisfied when they receive products completely different from the description provided on the website.

Another catch here is that you are basically communicating with customers through what you write on your website. That is something commonly done through word of mouth by traditional store keepers. So, if you’re going to replace them for customers, you have to be convincing and honest with your words on your website. Keep in mind that one of the major reasons behind returns is that people don’t receive what they think they bought. If you can not hire a full-time content writer, go for alternatives such as freelancers, or part time writers.

5- Not considering the competition before entering the market

Do not assume that people are waiting to buy from your store! Consider the competition in the market and figure out ways to deal with it in advance. In the beginning you might even have to compromise on your profits a little and sell your products at lower prices in order to win over competitors but that is okay! At this stage it is more important to attract customers and get the ball rolling than to make profits. Peshawar based e-commerce store; Dukandaar.com used competitive pricing and would charge Rs.50 less than their competitor in their initial stages of business.

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6- Finding your motivation

Be sure of why you want to start a business. Most founders want to start e-commerce business without any experience, solely because it’s trendy! They lack the right knowledge and understanding of e-commerce and just want to follow the herd.  These founders don’t take out time to study the market and don’t realize the challenges attached to a business, as a result their startups collapse in early stages. If you want to start an e-commerce business, be passionate about it. Take your time and study the market and trends, find the required tools and knowledge, talk to those who have been running e-commerce businesses and prepare your ground before stepping in.

However, do not keep waiting for perfection either, most startups don’t launch for years waiting for perfection, which is also not the right way to go about it.  You have to plan to the most micro level and also prepare yourself for any unexpected challenges because business never comes without risk.

“The most practiced way of doing something is often not the best way of doing it.”

7- Building a team

Don’t add them in your team because they are your friends, add them only because they have the right skills! Most Startups these days start with a team of 4 friends who decided to work together on an idea. But are those 4 friends also the right fit for your startup? That’s usually not necessary. You need a complementary set of skills in your team and It should be created after careful planning and understanding of the needs of your startup.So, if one person is good with marketing, the other should be well equipped with some other skill, e.g. finance or tech.

To start an e-commerce business, you need the following skill set: graphics designing, content writing and SEO, finance handling, social media marketing, PLUS you need to probably roll up your sleeves and do the packaging and make the customer calls yourself.

These are some of the most common mistakes made by e-commerce startups which are easily avoidable. The most practiced way of doing something is often not the best way of doing it. Use your own ideas to go about common challenges. Learning is a lifelong process and it is important to learn from the mistakes you make. However, before you learn from your own mistakes, learn from the ones made by others.

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