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The Top 5 Reasons Why ECommerce Businesses Fail

Uncategorized Jun 04, 2020

It’s no secret that these times are a little uncertain right now. As we continue to work our way through the global pandemic of COVID-19, we’re all trying our best to adapt to “the new normal” and “the new economy.”

A lot of these lifestyle shifts are foreign to us, and as we try to make our necessary adjustments, the fear of failure is omnipresent.

Let me start off by saying that there’s nothing wrong with failing. In fact, it is a perfectly normal step in your journey to success.

As Robert F. Kennedy said, “Only those who dare to fail greatly can ever achieve greatly.”

Before I started earning seven figures, I had dozens of failed stores and spent thousands of dollars and countless sleepless nights trying to figure it out- but I’m thankful for it all.

Without those failures, I wouldn't know what I know now, and I wouldn't be able to teach you.

I've done the hard work for you. I've made the mistakes for you so you don't have to. In my courses, I show you exactly what to do and how to find success while avoiding those missteps.

So today I want to break down a few basic principles on why eCommerce businesses fail, and how you can dodge the same mistakes. These top 5 action items will save you a lot of headaches, time, and money.

Alright, so let’s get started:

Selling the Right Niche

The most important choice you will make in your dropshipping venture is deciding on what products to sell. Without question, one of the main reasons why your dropship business can fail is because you’re selling the wrong inventory.

Now, the standard dropshipping business model is to find high volume, low-cost products, and focus on selling a lot of them with a low-profit margin. However, that’s NOT what you want to be selling.

Instead, you should be focusing on selling only a few high-value products. While there's no standardized definition for high- and low-ticket products, a high ticket product is most commonly described as a product costing more than a thousand dollars.

The good news is, that as online shopping and staying at home becomes the norm, more and more consumers are willing to purchase large, expensive products online.

Just this past year, I shared a list of the top 12 niches for 2019. At least half of the products I listed are applicable for today’s COVID-conscious demographic, including home bars, home fitness equipment, and home office health.

As with any product, you'll need to do your product research first, and make sure that your sales volume, marketing costs, and profit margins all balance out to a profit.

One last thing - if you choose a niche that just isn’t working out for you, change it up! To quote Ross Geller, “pivot!” Move on to something else. Try and try again until you find what works best for you.

I encourage you to become a member of my Dropship Academy today where I walk you through everything you need to know about launching your online business.


Choose the Right Supplier

Another main reason why your dropship business may fail is that you're not working with the right supplier.

Selecting the right suppliers for your dropship business needs is crucial to ensuring that you are able to deliver your products and services on time, at the right price, and in compliance with your quality standards.

So, what should you look for in a supplier?

Reliability - You need to find a supplier who you can count on. If they let you down, you let your customers down. This will result in refund and chargeback requests, which you always want to avoid.

Quality - Your customers associate poor quality with you and your store-- not your suppliers. The quality of your suppliers needs to be up to par and consistent.

Strong Service and Communication - The best suppliers are the ones who communicate with you. They will be available to talk with you regularly to find out what needs you have. Should your supplier not be able to meet your requirements, they should be honest with you and give you plenty of warning.

Financial Security - You should always check and make sure that your supplier has a sufficiently strong cash flow to deliver what you want when you need it. A simple credit check will help reassure you that they won't go out of business when you need them most.

A Partnership  - Ideally, your relationship with your supplier is like a partnership. A strong relationship will only benefit both sides. You want to show your suppliers how important they are to your business. On that same note, you want your suppliers to acknowledge how important your business is to them, so they make every effort to provide the best service possible.

Once you have a manageable shortlist of suppliers, you should be able to narrow it down to your best match.

Tip: Approach the potential suppliers and ask for a written quotation. Once you have the quote, compare the suppliers in terms of what matters most to you. Price is important, but it shouldn't be the end all be all. Lower prices may reflect poorer quality goods and services which, in the long run, may end up hurting you. 

Once you've found the suppliers you'd like to work with, you can move on to negotiating terms and conditions and working up a contract.

Ultimately when looking for a supplier, make sure you know your needs. Don't fall for some sales pitch that doesn’t meet your requirements. Spend time on research, ask around, and make sure you do your due diligence.

Have a Professional Website

You need to have a good website in order to be successful. This is just the reality of owning a business today. You don’t want your store’s website to look like something that you just threw together with typos all over, broken links, and a clunky checkout process.

A professional website should show credibility and trustworthiness and should be user-friendly enough to make customers want to return.

So let’s go over some key elements to a solid website:

  1. Be in Harmony - Your website theme should be in harmony with the products you’re selling. For instance, if you’re selling any form of machinery and equipment, you don’t want your website laced with soft colors or floral patterns. You should match your design with your product line. This will leave a good taste in the minds of your target market. 

  2. A User-Friendly Shopping Cart - The design of your shopping cart should make it easy for your customers to add several items, remove items, or change their order. It should also include all the important features, including a “continue shopping” button so that they can change or add items in the cart.
  3. Offer Competitive Shipping Rates - It’s no surprise that customers prefer eCommerce websites that offer free shipping. Of course, it depends on the items that are being ordered. With high-ticket items, this simply isn’t feasible. Regardless, it will be to your advantage if you can emphasize in your website that your shipping rates are lower than your competitors.

  4. Make Checking Out a Breeze - Stores with an easy check-out process attract the most customers. There are two simple tricks that I recommend: 

A.) Include a guest check out option - Unfortunately, there will be customers who won’t convert due to your “excessive demands” (aka - asking for too much information.) This can cause your abandonment rates to increase considerably. By adding a guest check out option, this will allow your customer’s transactions to be anonymous and quick.

B.) Add a PayPal option - By including a PayPal on your checkout page, you are saving the customer time. It’s easier to click a couple of buttons and make a payment as opposed to filling out card information. The customer will be more inclined to make an immediate purchase if there is a PayPal button.

  1. Make Them Feel Secure - As an eCommerce website, you will be asking your customers for specific and sensitive personal information in order to complete a transaction. Therefore, your website design must support SSL. As a matter of fact, you are required to secure your website to satisfy PCI standards if you will be accepting payments through credit cards.

Hands down, the easiest and best website for eCommerce stores is Shopify. It's designed to help folks like you build a scalable online store with hundreds of built-in features, and tons of apps. You can sell products directly on your website, and across multiple marketplaces and social media. If you're looking to having an online store, this is the way to go.

I share how to set up up and finish a high converting store with the best Shopify theme ever invented. This system can be learned and mastered faster than you ever thought possible, and you can build a store that looks and works just as well as one of my drop shipping businesses. Learn more about it at the link below.

If this all seems too overwhelming, our team can do it for you! If you want to learn more about High Ticket eCommerce and how to start your own business in the next 21 days without marketing skills or tech skills, II encourage you to watch my “Done for You Store Launch” video.

Be Social

It is now an accepted fact that social media can deliver measurable results in sales leads, actual sales, and branding. It’s also known that, just as with a website, social media adds credibility and trustworthiness to your business. By not having a social media presence, you're missing out on one of the biggest demographics readily available to you.

Whether you are outsourcing your social media work to a freelancer or managing it yourself, you will want to make sure that you’re active on any relevant platforms.

Tip: *You can outsource your social media needs via websites such as Fiver and Upwork.

Let’s discuss the four major social media platforms:

Facebook: Although Facebook’s user base has drastically slowed down over the last few years, there’s no question that it will remain one of the biggest social media platforms for your business in 2020. This doesn’t mean that you have to advertise on Facebook. These paid ads can become cumbersome and expensive, and they’re totally optional. Your best bet is to have an active account to keep in touch and connect with customers.

Instagram: Within the two months of Instagram’s launch in 2010, it had over a million users. Now, that number has grown to over 1 billion users each and every day. It is now one of the top social media platforms for business. Now, it’s more than just a platform for sharing photos. It was expanded to videos in a feature called “stories” and has become an excellent way for brands to literally show their products, values, and voice.

Twitter: From the get-go, Twitter had a brilliant marketing strategy with its character limit: give everyone a voice but limit the “noise.” By maintaining an active Twitter account, you are standing out from the competition, consistently engaging with your audience, and adding valuable content with all of your posts.

YouTube: More than any of its competition (Instagram, Snapchat, TikTok), YouTube has become the platform for sharing information via video. For the purpose of your online store, you can create video tutorials to back up your text-based content (like blogs), visually show product descriptions, and give personal press releases to your viewers.

*Tip: Make sure you are optimizing your videos for YouTube SEO so they actually get views.

You’ll also want to make sure that your social channel icons are visible and easily accessible on your website and email newsletters.

Have Excellent Customer Service

When you look at online customer reviews of companies, a vast majority of 1 and 2-star reviews and angry rants come down to the same thing- customer service. This can make or break your business. 

Setting up and maintaining excellent customer service is essential for any dropshipping business. While great products, branding, and a sleek, organized website are a must, customer service must be an equal priority.

When people buy products, they want to know that the quality is backed by the seller and that any issues with the product, purchases, shipping, returns, etc, will be handled promptly, efficiently, and competently.

This side of the business can be handled by you, an assistant, or a team.

Whether it's responding to emails, taking calls, or customer outreach, everybody must be on the same page in terms of protocol. This will help avoid confusion with customers, co-workers, and boost efficiency with taking care of any issues. A timely, well-handled solution can often make the difference between losing and maintaining customers.

The number one thing to remember in customer service is simple, be nice! You have to truly care that your customers have a good experience with your product and the buying process. The first impression you make in correspondence will often shape the buyer’s perception of your company. They need to know that they can trust you to handle their needs. Being polite, responsive, and respectful is imperative to building great relationships with customers.

Don’t Give Up!

You hear stories all the time of actors or musicians getting their big break as they’re looking at throwing in the towel. The same is often true in businesses.

Many businesses fail within the first year or two. Building a business, becoming a known brand, growing your customer base, and turning a profit takes a lot of hard work and persistence.

While being well-trained in how to run a drop shipping business is an essential starting point, nothing beats experience. As you work to grow your brand, you will see ideas succeed and fail. Failure is just as important as success. Learning to overcome, adapt, and make changes to your business is key. Failures are hard and often overwhelming- and they will happen.

Stay focused on your end goal, learn along the way, keep studying, and don’t give up!

Lastly, if you're not part of my high ticket, one sale a day system, my coaching program, my training system, or anything like that, I really encourage you to give it a try.

If you want to go through a great training right now with me, where I share my screen and go over my top strategies and how my clients are doing well and show you how to start an online business, then head over to this page and pick a time to show up.

It's free training. All you need to do is set aside about an hour for it, and if you feel like you want my help, in the end, I'll tell you how I can help you implement and launch your first online drop shipping business. Hope to see you there. 

Until next time,

AJ Jomah, CEO of Elite Drop Ship Academy

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