A lot has changed in e-commerce over the last twenty years. In the late 1990s to early 2000s, anyone could open an online store and make money. There was a lack of real competition, and with technology not being as affordable, it was harder for a member of the general public to buy stock to make money.
Nowadays, technology is more affordable than ever; anyone can buy anything they want from China, and Amazon is the world’s biggest competitor – and not just for books! Running a retail store in 2020 is hard work, but many still give it a try.
Whether you’re new to e-commerce, or you’re a hardened professional, keep reading for a list of the most common challenges faced by retail stores. Understanding more about these should help you to improve your own business.
1. Choosing a Product to Sell
Most product markets are saturated these days, especially with sites like AliExpress making it super easy for retailers to gain instant access to Chinese wholesalers. Because of this, it’s important that you take the time to really think about what it is you want to sell. Maybe you will pick a product that you’re passionate about, or maybe you’ll pick a blank product that you can customize and make your own?
Ideally, new e-commerce store owners will want to pick a product that is niche if they want to achieve long term success. Purchasing products that are popular with the masses is all well and good, but it will be hard to compete on price with the likes of Amazon and Walmart who can buy the same items for much less in bulk.
2. Generating Traffic from Your Target Market
There is so much competition online these days that marketing is a whole different ball-game than it was even ten years ago. In fact, getting their e-commerce store seen is one of the biggest issues that most new retailers face.
In order to be discovered, e-commerce store orders need to be willing to put in the money for things like SEO, PPC, social media advertising, shopping engines and more. And, of course, it’s unlikely that you’ll have the time to manage all of the above yourself, so you’ll need to hire people to do that for you too.
3. PPC Click Fraud
Leading on from the above, PPC click fraud is another issue that many e-commerce store owners face. PPC ads are self-explanatory – you pay the advertiser every time a visitor clicks on the link from the advertiser’s site. Most e-commerce owners, especially early on, pay for PPC ads with the search engines like Google and Bing as it’s a quicker form of advertising than SEO. However, if your competitors are clicking on your ads fraudulently, it’s costing you money and could be leading to your ads becoming less visible.
This is exactly why using a service like ClickGUARD to minimize click fraud is important. ClickGUARD analyzes every click your ads receive and blocks them if they appear fraudulent. It’s a simple solution that is recommended by many Google Ads professionals.
4. Converting Shoppers into Customers
Getting people to visit your online store is only half the battle. Once they land on your website, you need to convert them into paying customers. Nurturing leads and driving quality traffic is, therefore, key. Plus, if your advertising isn’t converting as you want it to, you’re going to end up losing a lot of money. Some of the things you’re going to want to do in this respect include:
Ensuring your website is easy to navigate
Making the checkout process as quick and easy as possible
Ensuring your contact details are readily available
Adding a full returns policy to your site
Making shipping clear and understandable
In addition to the above, it’s also a good idea to analyze the traffic that visits your site. Find out where your converting customers are coming from and increase your ad spend there. Make sure to fully monitor this and adjust your marketing – and landing pages – as required.
5. Retaining Customers
It’s often said that it’s easier to retain customers than it is to find new ones, and this is true. But one wrong move could see you in a world of hurt. It’s vital that your customer service is top notch and that you are doing everything legally.
Many sellers, for example, aren’t aware that if they are selling items to customers located within the EU, they need to clearly list their contact information and accept returns (unless the item is personalized). E-commerce stores that don’t do this are not only breaking EU law, they’re also risking losing customers to competitors who have clear returns policies.
Things will go wrong in business and you will need to be able to adapt and put on a smile even when you believe the customer is being unfair. However, if you can provide good customer service 99.9% of the time, you shouldn’t have much trouble with retention.
Hint: things like newsletters and active social media accounts that showcase new products and provide discount codes are key here.
6. Hiring the Right People
While you may have started your retail store as a solo entrepreneur, if you want it to grow and truly be successful, you’re going to need to hire staff to help. You can outsource some aspects of the business, such as your accounts and your marketing, but unless you plan to dropship, you’ll need staff to help you with logistical things like packing, shipping and even ordering in stock.
It may be tempted to look for people willing to work at minimum wage, and this can work out okay for some jobs, but other sectors will require you to attract the right talent. For example, if you need to hire a manager, finding someone with retail experience and leadership qualities is going to be key. 7. Choosing the Right Partners
Finally, choosing the right companies to partner with is also a hurdle that many online retail owners need to contend with. It can be all too easy to jump on board with an e-commerce platform just because they’re popular, or just because someone else you know uses them, but it may not be the best option for you.
Every business is different, every product is different, and what works for one person may not work for you. Take your time when it comes to choosing the best email software, inventory management software, shopping cart solution, website builder and more. Speak to people at each of these companies you are considering if you can and find out whether they really can benefit you in the way that you need them to.
The same goes for if you decide to sell on marketplaces. These all have different fees, different target audiences, and different pros and cons. You’ll only be wasting time if you add your products to one that isn’t suitable.
Running an e-commerce store is a big challenge, especially if you want it to be successful. However, now that you are aware of the most common challenges faced by online stores, you can hopefully avoid the main problems and you’ll know what to do when you come across a hurdle. Good luck!
By Ella Woodward. Ella is a freelance writer who specializes in business topics.