Home E-Commerce Failures and Mistakes: Why do so Many Startups Fail?

E-Commerce Failures and Mistakes: Why do so Many Startups Fail?

I’m sure you are aware of the alarming rate at which E-commerce businesses shut down. If not, let me share with you the results of recent research about E-Commerce Startups. “90% of the E-Commerce Startups fail within their initial four years.” Are the reasons for startup failure the same as they’ve always been? Why do so many startups fail?

The idea of online shopping excites today’s generation as much as purchases have in all generations.

There is no denying the fact that the people today have become more price-conscious. They have much more marketing-savvy, and a brand-loyal that hasn’t been seen for a long time. Definitely not a positive sign for an aspiring entrepreneurs looking to venture into the e-Commerce business.

E-Commerce Business Stats: The reality check.

  • 90% of the E-commerce startups fail within their first year.
  • Of the remaining, 36% of E-commerce startups fail in their second year.
  • Of the remaining, 44% of E-commerce startups fail in their third year.
  • Of the remaining 50% of E-commerce, startups fail in their fourth year.

Disappointing, right?

There’s a lot you can learn from established businesses and successful entrepreneurship stories. Keep in mind that there’s lot more to learn from failure stories. Failures give you a concrete insight into what to avoid, and project options to try instead. I’ve done some research and digging for you to know the common (and avoidable) mistakes.

E-commerce startups tend to make many errors in their initial years.

Collect a checklist of what NOT to do — and scale your business among the selective 10% of successful e-commerce stores. Success stories is not churning out of random articles but the result of deep digging and through analysis. Consider each point as a gold coin and save them in your pandora box of ‘E-Commerce Entrepreneurship Wisdom.’

Common mistakes e-commerce startups make — strategies to try instead.

Below are the mistakes that have cost aspiring entrepreneurs a huge amount of money. Most startups also lose a decade of prime life years as well. And there really are dos and don’ts for an e-commerce business. Many of the startups are still making the same mistakes.

What does it really takes to have a successful eCommerce store.

Top Seven E-Commerce Mistakes to avoid


1. Are you selling the wrong product?

The most important thing to consider when launching an E-commerce business is the product, and it’s the biggest reasons startups fail. If you are selling products that are outdated or years ahead of their time, who do you think will purchase them? By choosing a wrong product category, you’ve already landed in a tough position to begin from.

Here’s what to do instead:

Make sure your online buyers or target audience is interested in the product you are selling. Find the right product category that is useful for both your custom and lookalike audiences.

Ask yourself these questions:

  • What should I sell to meet the demands of buyers?
  • How should I add value to my product?
  • How do I place my product correctly to have a value proposition?

2. Are your product photos and description good enough?

You’ve chosen a great product to sell online. You are sure it will hit the market as soon as people know about its availability and great features. You’ve done the target audience analysis and you are good to go. What if the product listing on your e-commerce store is inclusive of low-resolution, grainy photo and poorly written description?

Look at your product photo and description. Does the photo look like something taken on a mobile phone from 2000? Does the description look as if it was written by a five-year-old? Fix these two points or you’ll never be able to convert your visitors into buyers.

Here’s what to do:

Never forget, it’s the visuals that appeal the online buyers first. Second will be the neatly-written understandable content. There is no excuse for poor photos nor excuse for poor English.

  • Take good product photos that surpasses high-resolution with no glare or glitches (or get them done by a professional).
  • Make sure your product description is catchy, to the point, and describes the item in a way it resonates with the buyers.
  • Choose simplicity over flowery language.

3. Is your E-commerce Store design lousy?

Again, it’s the visuals that impress your viewers first. The design and appearance of your website matters a lot. 90% of the times it is the biggest factor that determines whether or not it will be successful. Website design is not all about external appearance, the visuals, and the graphics.

Website design, in terms of an E-commerce store, is a broader term. The phrase covers everything about your site including the way it looks and the way it works. Aesthetic but also purely functional and serves the purpose of both visual appeal and easy to use interface.

Here’s what to do:

  • Build a strong, visually appealing, fully-functional store that speaks of user-friendliness, brand-authenticity, and great content availability.
  • Add elements that give your store a competitive edge, increase the credibility, enhance the scope for communication, and assure easy navigation.

4. Are you wasting your customer’s time?

With online shopping, customers definitely get to save a lot of time. But the same phenomenon of ‘shopping from the comfort of home’ has made them more conscious about time wastage. No one likes to spend hours on a site to fill-in unnecessary detail and complete the formalities. Everyone wants to get things done with few clicks and swipe.

There are a lot of E-Commerce stores that neglect to make their purchase and checkout process simple for their buyers-to their detriment only. With such a lengthy checkout process, buyers often abandon the cart and switch to another site.

Here’s what you should do instead:

  • Make the checkout process plain and straightforward to stop your buyers from dropping out at the last minute.
  • Don’t ask for unnecessary details.
  • Hire checkout trust signals to make it a secure gateway and partner with known payment facilitators because users are always skeptical about new companies.

5. Have you aligned your pricing and your marketing ads?

The other day, I saw a great deal on a juicer on the Facebook page of an E-commerce store. It was, in the literal sense, a steal. I quickly navigated to the official site for buying the product and found that the shipping charge was almost three times the product cost. Who are such companies kidding?

I obviously didn’t buy anything and made a mental note to never buy any product from that seller.

This is what a lot of e-commerce businesses are doing today-luring customers with half-informative ads and then disappointing them with hidden prices, which later becomes a top reason for cart abonnement.

Here’s what I suggest:

  • Manage your buyer’s expectations by telling them the truth.
  • Make sure not to add any unexpected cost at the last minute.
  • Stop scamming buyers in the name of shipping fee and never play around with their trust.
  • You can add a shipping calculator widget to your store to ensure transparency for buyers.

6. Do you have a clear policy?

Don’t purchase from a company if they don’t have a clear product policy. As a buyer, I always lookout for an accessible and understandable policy. As a seller, make sure your information is precise and understandable.

A lot of new e-commerce businesses have no policy, seeing which customers abandon the cart and shop from someone who has a broad guideline related to the development of a product.

Here’s what you can do:

  • Have the policy easily available under each product description on your e-commerce store.
  • Have the policy emailed to the buyers once they’ve purchased with you.
  • The policy should have information that can prevent any legal action against you.

7. Are you making the right investment?

Of course, the investment. When talking about online business, when can we ever neglect the investment part? If you’ve ventured into this business, you have to have enough money, no matter which product you are selling. Else, your company will cease to exist.

Often, e-commerce businesses fail to make the right investment. They either overspend in unnecessary phases of their business and neglect other aspects of marketing.

Here’s what to do:

  • Make sure to create a budget about your spending’s-create separate fund sheets about each phase including promotions, marketing, and inventory management.
  • It’s advised to test a small amount of inventory for gauging product demand before buying it in bulk amount.

8. Is your content marketing working properly?

Do I have to mention how important content marketing is? I know content marketing is clichéd – and I also know clichés become clichés for a reason.

Digital marketers and experts around the world say that content SaaS startups should spend an average of 50% resources on strategic content distribution. If you want your product to rank high among the Google search results, you need to follow an appropriate marketing strategy. Every E-commerce startup needs to market their website and its products through different channels.

Let’s see what Troop Messenger did to market the office communication application effectively– we wrote articles, blog posts, and created growth hacks around a variety of keywords and user intents to bring it at the first page of Google Search results.

Points to be taken.

High search volume and low keyword difficulty are crucial to building your content pillars. The same formula applies to high intent keywords for your niche. When people are searching for “Slack alternatives” it means they are already unhappy about Slack. And it’s our job at Troop Messenger to address their pain points in the post and offer them our tool that’s a great Slack alternatives.

Here’s what we did:

  • We first created a content marketing mission statement that outlines our target audience and the benefit they’ll get. Our mission statement included our goal of improving revenue, reducing marketing cost, getting more traffic, making more sales, increasing social media engagement and SEO success.
  • Post that, we established our key performer indicators, which included hitting a certain revenue target, getting a certain number of email subscribers, increasing the site traffic, and getting more signups.
  • Then, we spent our resources to assess our current position. We carried out a content audit to assess the usefulness and success of our articles and identified gaps. This way we found which content is widely shared, which piece needs improvements, which ones need to be removed, and what topics interest the readers.
  • Our next step was to find out the best content channels, and identifying the main social networks where our articles and posts had maximum visibility and shares. In our case, most of the activity tool place through guest posts and blogs. We continued researching and refining our strategy for more details.
  • Our final strategy was creating a content calendar where we scheduled all our contents. By using Google Calendar, we put dates for every piece of content and continue publishing quality material from time to time.


Don’t become just another failed entrepreneur. Ask yourself the practical questions, research, analyze, and gain clarity. These new startup mistakes happen very commonly, over and over again. E-commerce stores and their trends change very frequently. Stay updated and always have the curiosity to learn more and find scope for improvement.

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Mohsin Ansari
Digital Marketing Manager at Troop Messenger.

Md Mohsin Ansari is a Digital Marketing Manager at Troop Messenger. He is accountable for analyzing the market trends, demographics, and dealing with all promotional and media channels.

Get the biggest tech headlines of the day delivered to your inbox

    By signing up, you agree to our Terms and Privacy Policy. Unsubscribe anytime.

    Tech News

    Explore the latest in tech with our Tech News. We cut through the noise for concise, relevant updates, keeping you informed about the rapidly evolving tech landscape with curated content that separates signal from noise.

    In-Depth Tech Stories

    Explore tech impact in In-Depth Stories. Narrative data journalism offers comprehensive analyses, revealing stories behind data. Understand industry trends for a deeper perspective on tech's intricate relationships with society.

    Expert Reviews

    Empower decisions with Expert Reviews, merging industry expertise and insightful analysis. Delve into tech intricacies, get the best deals, and stay ahead with our trustworthy guide to navigating the ever-changing tech market.