The Top Three Mistakes Ecommerce Startups Make And How To Avoid Them

The top three mistakes that can cripple your ecommerce startup.


The internet has changed the way 1.66 billion people do their shopping worldwide. And with 1.9 trillion dollars spent by online shoppers in 2016 alone, there’s a lot of money to be made selling goods online. Sadly, that doesn’t make it any easier.

Depending on whom you’re listening to or where you’re reading, you’ll see stats like these:

  • 8 out of 10 businesses fail within the first 18 months
  • 50 percent of startups fail after five years
  • 1 out of 5 businesses survive past their first year of operation

I can go on and on with the grim statistics. But the point is that running any business, let alone an ecommerce business, is hard. You will make mistakes, and if you’re not careful, some mistakes could destroy your business. Here are the top three mistakes that can cripple your ecommerce startup:

1. Mulling over tools

Yes, when you’re running a business (online or offline) you’ll need certain tools to make your work easier. And with the proliferation of tools on the internet today, choosing one doesn’t get any easier - especially if you’re a non-geeky individual.

You could spend days, weeks, and months mulling over the right tools to use and stalling your business. What’s the best approach?

  • Choose the right ecommerce platform: It starts here. Check to see if it integrates with other software you plan to use. Explore the payment options available to your customers. Check its security features. This is the first and arguably the most important step. Mine review sites like Capterra, GetApp, G2 Crowd, etc for reviews of any software you’re planning to use. For a side-by-side comparison of the top five ecommerce platforms, check this infographic from Lodlois.
  • Delegate responsibility: If you’re not so tech-inclined and would rather take anything “software” off your to-do list, you can enlist the help of an expert who can help you with that choice. You can pay for it, or if you have a technical co-founder, let them handle it. For other tools like marketing software or the likes, your freelance marketer or marketing agency can help you choose one if you’re not up to the task too.

The important things here are spending time on things you’re actually good at, and/or not paralyzing your ecommerce startup with your indecision. Choose a tool and get to work. You can always change tools later.

2. A poor marketing strategy

The catchphrase “if you build it they will come” has been around for a while now since it’s adaptation from the 1989 movie Field of Dreams. I hate to disappoint you, but you have a better chance of winning the lottery than having people flock to your new ecommerce site out of the over 1.3 billion sites on the internet today.

To be in business, you need to determine how you want to market your store. Again, you might be overwhelmed with your options here. But I’ll simply group them into the following:

  • Social media: You can market your business using YouTube, Facebook, LinkedIn, Instagram, Pinterest, or Tumblr.
  • Paid ads: Google ads, Bing ads, Facebook ads, banner ads, promoted tweets, and sponsored posts on popular sites and others are all options here.
  • Content marketing: You can start a blog and use it to build your email list, write guest posts, create a YouTube channel, or create a viral video.

Of course, marketing your store encompasses much more than I’ve listed above, and it can be overwhelming at first. Choose two or three channels at most and focus on them. Give it some time, track your results, and cut off whatever doesn’t work for you.

3. Using the wrong metrics to measure success

Traffic doesn’t matter if you’re not making any sales. Your leads and number of email subscribers don’t matter if you’re not making any sales. Forget whatever numbers marketing gurus throw at you, you need revenue to keep your ecommerce startup afloat.

You’ll get varying opinions on what metrics you should track—some marketers even encourage tracking comments and shares on your blog posts! While that’s not bad in itself, in this context, especially if you need a quick fix for starters, it will not help.

Here are some metrics you shouldn’t ignore:

  • Average Order Value: This metric tells you how much your customers spend each time they place an order on your website. To calculate it, divide total revenue by the number of orders made.
  • Customer Lifetime Value: This is a customer’s worth to your business over a period of time. For a one-year CLV, calculate average revenue per customer per month which is total revenue divided by number of months since customer joined. Multiply that by 12.
  • Customer Acquisition Cost: This metric easily lets you know what channels bring you the best return on investment. Divide total cost of the marketing tactic by total number of customers acquired to get this metric.
  • Net Promoter Score: This is a customer satisfaction metric lets you know if your customers would recommend your brand and your products to their friends or family. It ranges from -100 to +100. Always aim for as high a number as possible. You can check here to learn how to calculate NPS.

While running your ecommerce startup, no matter what you do, realize that you need to make money to stay in business. So focus on what matters directly or indirectly to your bottom line, and not on trivialities.

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