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Why Most eCommerce Startups Fail

The eCommerce industry is growing at a very fast pace. In recent years, many startups have emerged in this sector and established themselves as leaders. However, there are also many startups that started their journey but failed to continue that journey.

For such startups, it is very important to know the reasons for their failure and to learn from those mistakes to avoid them in the future.

Here we have compiled some of the main reasons for the failure of eCommerce startups, according to an expert ecommerce web design company.

Reasons Why eCommerce Startups Fail

  1. Poor online marketing strategies

One of the main reasons for the failure of an ecommerce startup is its inability to do online marketing. It is important for ecommerce startups to have a clear marketing strategy.

Even if the ecommerce store is good, but no one knows about it, then it will not generate enough sales, which means it is not getting the desired traction. Therefore, if you are planning to launch your own ecommerce startup, you need to have a strong marketing strategy in place.

  1. Lack of online search visibility

The next reason ecommerce startups fail is the lack of online search visibility. The best way to get the word out about your ecommerce store is through online search engine optimization. If your ecommerce store is not getting enough traffic, then it’s not going to generate the desired sales.

Therefore, you need to have an excellent ecommerce design website in place that will help you to get more traffic to your online store and that will help to generate more sales.

  1. Little to no market for their products or services

It’s important for you to research the market before launching your own ecommerce store. There are many ecommerce startups that launch their own store without doing any kind of market research and then end up failing.

You can do market research for your ecommerce startup by speaking with existing ecommerce owners, analyzing the competition, doing a thorough market analysis, asking the customers what they want, and doing a thorough keyword analysis.

  1. Running out of cash

If your ecommerce store is not generating any sales and you need to run the ecommerce store for a longer time for the business to turn profitable, then you will have to spend more money to run the business. Running out of cash is one of the main reasons why many ecommerce startups fail.

Therefore, you need to have a clear idea about the money that you will need to launch your ecommerce business and also to run your ecommerce business for a longer time.

  1. Price and costing issues

Many ecommerce startups fail because they do not have a clear understanding of the pricing structure of the products that they are selling in the ecommerce store. Here, the main problem is that they don’t have a specific strategy on how to go about the price that they need to charge for their products to make a profit.

In addition, many ecommerce startups fail because they do not accurately factor in their costing structure which is necessary to estimate the costs that you need to incur to run your ecommerce business.

  1. Got outcompeted by others

In this era where the number of ecommerce stores is rising every day. It is becoming increasingly difficult for an ecommerce store to stay in business. In order to succeed, you will have to compete with other ecommerce stores as well as with other forms of businesses.

Therefore, what matters more is how to differentiate your ecommerce business from other ecommerce businesses. You can hire an ecommerce website designing company to help you figure out how to make your site unique and drive more sales.

  1. Retail giants dominating a large share of the market

In many ecommerce businesses, one of the biggest challenges an ecommerce store can face is the competition. That they have to face from retail giants such as Amazon, Walmart, eBay, Sears, etc.

The reason why they can pose a huge threat to an ecommerce startup is that they have a huge customer base which you will have to compete with.

  1. Lack of customer support

Many ecommerce businesses fail because of the lack of customer service support that they offer.

In an era where most of the population is using the internet for research and shopping. Your customers will expect you to provide them with excellent customer service that will help them to be a step ahead of the others.

  1. Poor team around them

The greatest contribution of a startup in generating sales is the team that they have. The team that you have in your business will be responsible for how efficient your company will be in generating sales.

You should make sure that you hire employees who will help you out in generating sales. And in dealing with the various problems that may arise in the future.

  1. Product mistiming

Nothing is worse than a company that releases a product or service. Which is aimed at a particular market but is actually not needed by that particular market.

The best way to avoid the problems that this may cause is to conduct research. And studies, not only on your potential customers but also on the competitors.

A good ecommerce business is required to have a good product. That is priced reasonably, that has good customer support, and an excellent team.


In this article, we have discussed the main reasons for the failure of eCommerce startups. So, thinking about starting an eCommerce business? Make sure you go through these points before you start so that you don’t have to face any challenges later. Also, you can enlist the help of an ecommerce web design company in boosting your online store.

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