In the beginning, the challenges of getting your e-commerce store to take off can seem insurmountable. You have to research suppliers to source products, create a go-to-market strategy, find designers or work on your own designs, register as a business, the list goes on and on…
The list of things you need to accomplish churns over and over in your head. You think you know what you want your store to feel like and to look like, but it’s so hard to know where to start.
Face it, you’ve become subject to analysis paralysis. Well, my friend, let me help you organize your thoughts, put together your plan of attack, and get you moving in the right direction.
In this post, you will find the 5 biggest challenges eCommerce startups face and how to overcome them like a champion. Hopefully, you can find both the inspiration and motivation to tackle these challenges and get your business headed into an exciting future.
(1) Finding the Right Products to Sell
The bottom line is that finding the right product to sell can feel overwhelming.
And, if you sell what you know is already popular, you may be entering a saturated market.
While there are some popular products that you would be hard-pressed to go without (tee shirts, hoodies, phone cases, etc.), you don’t want to end up only following the trends.
Remember fidget spinners? The trend that had kids going crazy and had teachers rage-typing emails to parents, school district admins, manufacturers, ANYONE who would listen? (seriously though, shout out to teachers for doing a very hard job with limited resources).
By the time you saw a fidget spinner and thought “that would be a great drop-shipping product!” it was too late. You were entering an overpopulated market where differentiation and barriers to entry were low. These factors alone equate to one thing: high competition.
There are some simple strategies you can use to avoid falling into the trap of flashy trends. All successful products do at least three things for their users:
- They solve a real problem,
- They invoke passion in the seller and the buyer,
- They are forward-looking.
Case Study: Fidget Spinners
Let’s analyze these three strategies using the fidget spinners as an example.
(1) Solve a Real Problem:
Today’s younger generation and most adults grew up during the technology boom. This means, at some point during their lives, usually early on, they started carrying around an electronic device.
My first was a palm pilot (you know, to keep my ten-year-old-self organized). These devices can be disruptive in any setting where a user’s attention is required, from the classroom to the boardroom.
Cue the fidget spinner. These little playthings were “supposed” to give users something to do while they set their devices down and paid attention to something other than the 6-inch screen in front of them.
Little did the creators know that a set of ball bearings encased in plastic would be as disruptive as the technology it was intended to supplant. Which is neither here nor there. The point being that fidget spinners were sold as a device to help solve the problem of boredom given short attention spans.
(2) Invoke Passion:
The next step fidget spinner manufacturers took to ensure they made the most of their new-found trend, was finding something their users were passionate about, as ball bearings wrapped in cheap plastic will only be in style for so long.
Manufacturers started toying around with different materials – saw milled aluminum spinners hit the shelves, brushed steel, gold plated, and silver. Even titanium-plated spinners are available if searched for diligently enough.
Licensing was the next natural step and themed fidget spinners appeared on the scene, with designs ranging from Marvel comics to sports teams, to Paw Patrol.
As is usually the case, corporate America was the last to catch up but sure enough, fidget spinners made their way into the swag bag and are now given away at corporate events.
Manufacturers and sellers knew that to make the most of this trend, they needed to find applications for their products that their users were passionate about.
(3) Be Forward-Looking:
Finally, the fidget spinner was a forward-looking product – it was a brand new thing. If you’re late to the party, you don’t get the cake. If you are late to the selling game, you don’t get the moola.
Admittedly, this is where your passion for your business will show through. Are you following blogs like Mochi’s? Subscribing to YouTube channels related to your industry? Setting up browser alerts for keywords that affect your business?
If drop-shipping has become easier with platforms such as Shopify then the real leg work is to be done through your research.
Don’t know where to start? Log out of Netflix and check out this post – How to Find Suppliers for Your eCommerce Business. It’s jam-packed with information for you to continually find winning products to sell.
(2) Managing Abandoned Carts
Abandoned e-shopping carts… they’re like… well, the abandoned carts that get in the way at the grocery store. They are the bane of every seller’s existence.
Abandoned carts are evidence that people came to your site, browsed through your products, thought about making a purchase, and, at the last minute, changed their minds.
Why did they abandon? Was it your pricing? Was it shipping costs? Did they go to a competitor? Studies suggest that cart abandonment can be as high as 80% for some shops.
Even Amazon can’t get away from abandoned carts. We are all guilty of abandoning our cart but now you’re on the receiving end of that transaction, so how can you cut down on cart abandonment?
So, how do lose fewer customers through abandoned carts? This is where you have to empathize with your customers and put on your account nurturing hat.
(1) Optimize for Mobile:
Your first step should be to optimize your eCommerce website for mobile screens. It’s 2019 – almost 2020! MAKE SURE YOUR PAGE IS MOBILE RESPONSIVE!
Nearly 67% of online sales globally are made on a mobile device. Note again that this percentage is global.
The smaller screens on mobile devices mean that your customer’s smartphone screen is basically Martha’s Vineyard of electronic real estate. Pop-ups, load times, and long checkouts only intensify the abandoned cart problem.
If you have a really slick process that works for mobile? Cha-Ching!! Need to zoom in 20x in order to input your card info? Hello, abandoned cart!
Disabling pop-ups for your mobile site as well as optimizing pictures for a fast load time are two ways to decrease your abandoned cart rate.
Need help optimizing for Mobile Commerce? Download our FREE guide:
If you’re struggling with abandoned carts, you should put in place a retargeting strategy. Retargeting is essential for an eCommerce startup and is the tactic of marketing to people who have already visited your website.
Website visitors retargeted with display ads are 70% more likely to convert. This means that the 98% of people who left your website without buying anything are 70% more likely to return and complete their purchase. Wow!
What’s even better, when retargeting you can retarget by the milestones they have hit on your website. For example, if they did fill a cart, but didn’t check out, you can retarget a specific ad to just those people. Now that’s some easy marketing.
Retargeting with Facebook Ads is simple enough to learn on your own, you can check out this post from Hubspot.
(2a) Shopify Emails:
Assuming you have your own eCommerce website, you’ve likely captured customers’ emails before they abandoned their cart. Shopify has a built-in email to remind your visitors they have abandoned a great product, so take advantage of this built-in retargeting feature and bring your customers back!
(3) Managing Customer Service
Another big challenge for eCommerce stores is providing customer service that delights customers.
Delightful customer service can mean a myriad of things. The two most important being (1) prompt responses and (2) kindness.
We can all become impatient. We’ve all have things to do. If a web page takes more than six seconds to load we close the window. The same applies to customer service.
If you cannot respond in an appropriate amount of time, you will lose customers. The best way to provide fast customer service is to have a live chat or a text feature such as Mochi.
Being friendly is the cherry on top for your customers. You already provide great products, so going that extra mile will make your customers come back again and again.
If you can’t respond to a ticket during work hours, respond at night. People don’t pay attention to office hours when it comes to their purchases.
It’s a challenge to be friendly when you have work piling up and other customers to talk to and orders that haven’t shipped, but it will be worth it.
The repeat customers you gain, along with positive word-of-mouth, will repay you tenfold for the time you spent.
Case Study: Chewy.com
One company that exemplifies these two pillars of service is Chewy, an online store that sells dog food. Chewy works hard to ensure their responses to customers are caring and friendly.
Here is a review left by a grieving customer:
“We had been using Chewy.com for our dogs’ food and treats. Diva was on prescription KD wet diet food and Chewy.com was a lot easier than a bi-weekly trip to the vet for food. Two days after our girl passed, my wife received the notification that our usual pet food order had shipped. So she wrote the company and asked if there were some way we could ship the food back for a refund and explained why. The corporate email response was personal and amazing.
— We are so sorry for the passing of your precious Diva. Everyone who works at Chewy.com are pet owners and lovers, ourselves, and we certainly understand the heartache you must be going through. Returning your order to us is not something you should have to worry about during this difficult time. We will process a refund for this latest shipment, which you should see in about three business days. In lieu of returning the order, please donate it to a local shelter in Diva’s name so that other needy pets will receive her gift. You were Diva’s guardian in life, and now she can be your guardian angel going forward.”
This is beyond customer service. This is real compassion. Thanks chewy.com.”
After reading a response like that, how can you not visit chewy.com? It’s moving when real people leave such sincere reviews. It may be challenging to give great customer service because you have to invest a lot of time. But that’s the whole point – to ‘invest’ means that there will be returns and, in the case of customer service, the returns can be astronomical.
(4) Fulfilling Orders
The best and worst problem to have in a business is not being able to keep up with orders. At first glance, this might be a great problem to have, because your business is booming.
But that excitement can be dampened by a queue of very angry customers who want their product and expect it now.
38% percent of customers abandon their shopping carts if the shipping will take longer than one week.
The easiest method for solving fulfillment pains may be a third-party fulfillment center. Of course, that means more money out of pocket. It will, however, give you consistent packaging and reliable dates. If you are committed to doing it yourself or if the money tree your grandpappy planted four score and seven years ago has not sprouted, here are some tips:
- Look at your website analytics often to know your website traffic to order ratio (for every SKU too).
- Based on your traffic to order ratio, keep inventory numbers slightly higher for your high-performing SKUs.
- Remember that as soon as you get an order, you should package and get it ready for delivery within 24 hours (assuming it’s not a handmade item).
Bottom line: People love convenience.
(5) Setting Your Return Policy
The dreaded return policy. It’s a hard battle between keeping customers happy and running a profitable business. Numbers such as the reported $350 billion lost in retail and online returns last year alone are the stuff of nightmares for an eCommerce store owner.
Having an overly strict return policy can turn away customers and cost you money both in opportunities lost as well as reputation. Free returns are the ideal and the expectation for most online shoppers.
So, shout your ‘free returns’ song from the mountain tops, if your business can afford it.
An excellent place to announce this is when your customer is looking at their cart. Customers in 2019 expect free returns, but to make them hit that “checkout” button you should calculate the costs of returns into your operating costs.
Knowing that you need to have a great return policy, let’s talk about how to reduce returns:
(1) Have clear product descriptions:
Let your customers know exactly what they are getting. There is definitely a difference between effectively selling your product and exaggerating it. So, don’t put your online shoppers in a position to be surprised when their product arrives. They don’t want to buy something that is different from the description. It’s dishonest and will increase returns which in turn will lose you money.
(2) Increase your return window:
Have you ever had a long return window and you think you are going to return in that given time and then all of a sudden the date goes by and you are out of luck? The psychology of consumers is such that they feel as if they are getting a good deal by having a longer return time frame. Return times hardly vary and, if you are at all like your customers, you know in the first moments whether or not you will be returning an item.
(3) Quality Control:
Make sure that all of your products are up to snuff. Remember that your clients are pickier than a child eating Brussel sprouts. They will notice a thread out of place and deem it as horrible quality. Highly curated, quality products are one of the best ways to avoid returns.
Over to you
After reading the 5 biggest challenges e-commerce start-ups face, I hope it has eased some of your anxiety about which challenges you will face and how to tackle them.
Remember to (1) find products that you are passionate about and that solves a real problem, (2) take the necessary steps to keep your cart abandonment low, (3) be hands-on with customer service, (4) fulfill orders quickly and efficiently, and (5) have a comprehensive return policy.
The most successful companies do all of these things. Now that we have given you some idea of how to move forward, it’s your turn to make it happen.
Let us know what was most helpful in the comments below and best of luck!