20 Big Challenges of Doing eCommerce Business

As eCommerce businesses have many advantages they also face challenges to operate in this competitive web world. Analyzing advantages and disadvantages can be an eye-opener for business aspirants. 20 big challenges of doing eCommerce business is a great guide explaining difficulties in doing eCommerce business.

 20 big challenges of doing eCommerce business can give you an overview of challenges a business can face at the present business scenario. If you are planning to start your own e-commerce business, this article can help you to make better plans to overcome these.

 

1. Online Identity Verification for Customers

Online identity verifications are one of the biggest concerns that can make influence many people from signing up on any new website. People are hesitant to share their identities and details. One of the main reasons for this is phishing.

 

2. Lack of Physical Trial Experiences

One side buying online is one of the most convenient ways of shopping however on the other side physical trial of products (especially apparel and footwear goods) is not feasible. The fit of products can not be checked on online purchases. New technologies like Augmented Reality are still in implementation for many and many are yet to start it.  

 

3. Data Capitalization is Key

Managing data and utilizing data for root cause analysis and decision making is key for running the eCommerce business. It becomes complicated as an error in data or data analysis can create major problems in decision makings.

 

4. Difficult to Establish New Startups

In online businesses, setting up an eCommerce shop is not that difficult as establishing the company or brand is. Business operations and profit-making are only possible when people purchase products online and for this their interest and trust in the company and a product is important.

 

5. Generating Traffic

One key step towards establishing a new online shop is generating traffic to the website. More people visiting to the website is better opportunities for sales. Generating traffic for a new eCommerce website is a tedious process and also time taking.

 

6. Data Vulnerability

Data is one of the most important tools for the eCommerce business today. Data can be different types; customer data, sales data, inventory, payments.

Managing data is one crucial process whereas data vulnerability is the biggest challenge eCommerce business faces.

Hackers, spammers, and viruses are the biggest threat to databases. Using effective tools and applications to monitor these threats is vital for the eCommerce business.

 

7. Frequent Website Update Needed

One of the main challenges for eCommerce websites is updation. Themes, banners, product catalog, and new features updates are regular processes for online shops. The outlook and customer-friendly interface decide people’s interest to visit and shop.

 

8. Tough Competition

Since eCommerce businesses are less expensive and easier to set up there are many companies online with attractive offers to customers.

Being noticed among many competitors by customers is never easy. It depends on marketing strategies, niche market and website performance.

 

9. Delivery Challenges

One of the biggest challenges for the eCommerce business is delivery. Reaching destination on time and delivering the product safely is key to the success of eCommerce business.

There are many delivery agencies providing these services whereas many big eCommerce companies use their own delivery service.

 

10. Payment Related Issues

Debit cards, credit cards, net banking, Google Pay, Phone Pay, Paytm are the main mode of payment today which is essential to be integrated for any eCommerce website.

Many companies are upgrading payment systems like Bitcoin, Apple Pay, Zip Pay, Payoneer and so on. 

 

11. Cost of Packaging

Unlike regular shops packaging is one of the main challenges for eCommerce businesses. Products safety is the main criteria for deciding on the packaging. Products are said to be less expensive in online shops but packaging cost is much higher than products sold in retail.

 

12. High Sales Return

The bitter reality is the eCommerce businesses face a big percentage of sales return. This can be due to many reasons; like fit issues, customers found color different than displayed on the website, product descriptions not matching physical products and so on. This could impact reputation and profitability.

 

13. High Expectations of Customers

Due to many players on online platforms and technology updates customers’ expectations are high. Understanding customer’s needs and expectations are crucial.

Providing solutions to the limitations of products or services against customers’ expectations can have advantages for the business.

 

14. Customer Retention

Customer retention on online platforms is challenging. Competitors, expectations of customers and quality and uniqueness of products and services are the main factors that can keep your customers loyal.

 

15. Unpredictable Pricing and Discounts by Competitors

These are again challenges due to competitions. Low pricing strategies and discounts or membership offer by big players can impact the sales of new startups and small companies.

 

16. Technology Upgration is Must

Upgrading new technologies can keep you on top of the competition. Today, Machine Learning, Data Analytics, Augmented Reality technologies are helping eCommerce businesses to make better decisions and higher profitability.

 

17. Laws and Website Policies

Local laws, government policies, privacy policies, and policies by competitors make eCommerce businesses complicated. Time to time updation in these policies based on policies updation is crucial.   

 

18. Complicated Omnichannel Model

Many big players today have opted for an Omnichannel business model which provides customers convenient shopping experience.

Big customer groups can be reached with this business model. Whereas, many small companies and startups may not be prepared to implement an Omnichannel business model.

 

19. Expensive to Implement ML, AR, IOT, AI

Upgrading new technologies is an expensive and tedious process. Sometimes a complete change of systems and applications may be required. The cost of implementing technologies like Machine Learning, Data Analytics, Augmented Reality, the Internet of Things, and Artificial Intelligence can impact the pricing strategies and margin.

 

20. Hectic Timings

Ecommerce businesses are live 24×7 which means customer support, meeting customers’ demand are crucial for the success of any business. Dedicated teams need to work round the clock for providing great shopping experiences to customers.

 

 Challenges may differ depending on the nature of businesses; for example in point 2, lack of physical trial is applicable for the apparel and shoe industry.  Studying, analyzing, preparing, and executing are keys to succeeding in business.

Hopefully, this article will be helpful for your business endeavor. Please do write your feedback, suggestions and experiences in the below comment section.