5 Key Challenges in Running an Ecommerce Store

5 key challenges in running an ecommerce store

Owning an ecommerce store is a sure shot way of developing your business, horizontally (by understanding the kind of products which are catching conversion rates and working on producing such products) and vertically (by increasing revenue through targeted marketing). Apart from not having to own a physically static land for business purposes, the cost of licensing, rent and employee salaries is also negligible. The virtual store is accessible to the audience throughout the week, with no open-and-exit timings. People from across the world can reach the store, thus providing the enterprise merit of proximity.

Apart from benefits of reaching out to the customers, entrepreneurs can also extract benefits by drop shipping third-party products. Services like Magento, Shopify and WooCommerce make establishment of shops a simple process. Moreover, there is no need to set up a website for selling the products with spaces like Etsy and Amazon.

However, while ecommerce stores could seem like a more viable option of running a business than a physically located store, it does come with its own set of challenges. Here is a list of 5 challenges that ecommerce stores have to commonly face:

1. Initial Low-Sales

Once the ecommerce store is set up, the biggest challenge that companies face is to earn the first set of orders. This problem is commonly faced by stores which have just entered the virtual world, with no past footprint.

To resolve this issue, your company must start with making the website approachable along with strong marketing.

Making the website approachable: The main emphasis must be on cementing the core functionalities such that every component is checked and verified properly. Once the sales start rising, your interface will be ready to carry the load. Many enterprises do the mistake of not working on their website initially and waiting passively for customers to walk in only to realize that once the sales have increased, there are elements of the website which do not function properly.

Marketing: Endorsing your website effectively involves getting the message out on social media networks (Facebook, Twitter, Instagram). Find ways to engage greater masses. This could involve connecting your products to the latest trends and news. You could also pitch in a free product with certain amount of purchases.

2. Shipping

Safe and on-time delivery of products is the judgment point about your enterprise. The enterprise has control over when the product is shipped and status of its payment. However, once the product has left the suppliers’ warehouse, then you cannot control its condition during transit. Your customer might have had a great experience on the ecommerce store – however, the prime determinant of your enterprise is quality of the product, once it is delivered. The highest risk faced during transits is with international deliveries. Apart from the excise duties, the postal network is not established effectively in all nations. The ideal solution for such a challenge is to have package according to type of product. Even though it implies packaging costs, it will definitely avoid angry feedbacks.

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3. Taxes

Generally, entrepreneurs assume that in ecommerce stores, there is no need to worry about taxes. However, this is a misconception. Depending on the product you are selling, you will have to pay state, county and local taxes.

4. Competition with the Big Wigs (Amazon, Flipkart)

Giants like Amazon, Flipkart and others have put thousands of online stores out of the virtual commerce world. The main way to answer to such competition is to be good at what you do. Find your genre of service/product and provide detailed guidance and specialty on it. If Amazon offers a product for cheaper price, then how do you get a consumer to visit your website and gradually incline them towards buying it? The best way is to start a blog along with tutorial and videos accompanying the product. The product must be a conclusion to which the content forms the premise.

5. Consumer Fraud

A study through lives of ecommerce sites spells the way in which consumers could fool companies. Once delivery of a product has been made, consumers can label transactions as fraud. In most of these cases, the bank supports the customers and since the process of dealing with such cases is tedious, the enterprise decides to pen it down as a loss, than to go through with it.  There are some ways in which you can ensure that no fraudulent transactions take place: start with keeping an eye on the shipping address and checking up on those who spend opulently. Move on to setting up secure payment gateways – most preferably Secure Socket Layer Encryption (128-bit encryption) System and Rules-Based System for Credit Acceptance or Denial. These tips will ensure that your ecommerce store is proofed against frauds.


Author : Sahana Rajan Date : 18 Mar 2016