It is very inexpensive and easy to start an e-commerce business. Creating a successful online business can be very challenging, and about 80% businesses fail. Each business is unique, and there are some common causes of failure of e-commerce business. It is important to understand the pitfalls that should be avoided to beat the statistics and have a successful business.
• No real investment required
Opening an online store for some money is possible. All you need to do is invest a few dollars. Just like any business, an online store may require several infusion of capital and need a good amount of labor. Retailers usually do not invest in online stores. If you have a physical store, start a new e-commerce website business in a new location. You need a similar investment for this to make profits.
• No flow of cash
Cash flow is a movement of money in and out of the business. The e-commerce companies get into trouble when they do not have sufficient cash for operations. To avoid cash flow issue, spread out expenses so that everything is done at once. Do not invest in advertising and search engine optimization.
• Poor management of inventory
Depending on the business model, inventory management is the biggest problem that e-commerce operations face. By getting too much inventory, you may damage your cash flow. It is not simple to order products as vendors, and a supplier needs to take one supplier for reordering. It may be held at different time and place.
• Too Much Competition
The Internet offers great opportunities to even the small business enterprises. No online startup will be able to survive in established competition.
It can be tough for new e-commerce website to sell products, as they are readily available from the online retailers. Make sure that you sell mass-market products at a very lost mind.
