E-Commerce Failures and Mistakes: Why do so Many Startups Fail?
Expectations and reality
It seems that now most of those who want to open their first business, dream of an online store. Here and there you can hear questions: how to open an online store, choose a niche, choose a platform, find a supplier, make the right advertising?
It seems to me that the desire to open online stores is connected with the fact that people are driven into the head of a simple dream: to work a little, earn a lot. Beginners sleep and see how they will open an online store, and then everything will go according to the scheme: customers come, goods are bought, suppliers ship them from their warehouses, and the entrepreneur only accepts money and rest somewhere on the islands.
So it will not turn out. More likely it will turn out other: the price of incredible efforts you will create a small Internet shop, it will bring you in good months 5 000 $, in bad – 1 000 $, you will spend on it all the time (weekends will not be), you will learn a lot about people (clients, couriers, operators on the phone).
Why does this happen most often? Usually, the beginning businessman has not enough money. And Internet advertising now already far not such cheap and competitive, as at one time.
For example, your shop works in the mass market. Most likely, one visitor to your site, attracted through contextual advertising, will cost about $ 0.2. If the conversion of your site into sales of about 1% (well, if it is), the client will cost you $ 20. And how much will you earn from it? Are you ready to pay $20 each? And if yes, how much will you have left for yourself? And will there be repeat sales, and if so, how soon?
Opening such a shop, you should know that the market for online sales in a tiny, much smaller offline market. Working in a small market, you earn less money with the same effort. In addition, online stores most often sell relatively inexpensive things. So, you will need a lot of customers to live somehow. We will have to spend a lot of time working with them, especially if we don’t use this shipping solution: constant sitting on the phone (you can’t miss the customer’s call!), constant questions with couriers (did not come, didn’t bring, didn’t return the money, was not polite to the client), constant running without days off and holidays. And all for 1000 rubles a month, which brings the average online store to its owner.
Usually, a novice entrepreneur has little experience. Therefore, he believes in numerous courses that do not always teach the right things.
It is often recommended not to go to the mass market, but to choose a niche. Yes, a niche online store has no competitors, but there is no big money to make.
Online guru also says that with the help of new landings can increase the conversion of the site to 5% and above. For example, they say that if you add a free consultation to the site, the conversion will grow from 1 to 10%. Do not believe it immediately – first, specify what conversion they mean.
After all, what will happen in the end? We will make a free consultation, spend a lot of time and money to organize a call center, and in the end we will be called by 10 out of 100 visitors, and order the goods as one client. That is, sales will remain the same, and the cost of servicing calls will grow, but your advisor does not take into account – he also increased your conversion in ten times!
Even at seminars often say that Internet advertising is elementary in the configuration. This is not true. Properly set up the same contextual advertising is not easy, especially without experience in this.
There are agencies, you say. They will set up your advertising for a small percentage so that everything will work on the machine and bring a stable income.
This is not quite so. Good professionals in agencies are expensive, so they are engaged exclusively in advertising campaigns with budgets from $ N $. Experienced specialists to deal with the new online store will not be. So, you will get on a novice trainee who has 50-100 such shops as yours (respectively, he gives you one pentecostal or one-hundredth of his working time).
What’s to be done, then? Not to start a business at all? I recommend you to start your business on the B2B-market – it’s sales to corporate clients, not individuals.
Many companies are willing to pay good money to those who spend time and energy on sales for them.
Find 10-20 companies that have been working in this market for a long time, call the commercial or general director of each of them and offer to bring them customers for a percentage of sales. First, you will search for customers by phone.
ON SALE ROOMSHIP CONTRACT about increase in discounts from suppliers, will collect a pool of partners that does not depend on one company. It will take two or three years for you to have a healthy, growing, reliable and financially strong business that you have created without any investment – only through your free time and personal perseverance.