Top 7 Challenges for New E-commerce Business 

Top 7 Challenges for New E-commerce Business 

This guide goes over a couple of the biggest challenges new e-commerce businesses are facing. It also offers several tips on how you can overcome them and start earning revenue even faster.

Top 7 Challenges for New E-commerce Business 

The Top 7 Challenges You'll Face As A Fresh E-commerce Business 

E-commerce sales are expected to grow by upwards of 10% in 2023, and more than 20% of sales this year could be attributed to online purchases. That’s even higher than pre-pandemic online purchase numbers! No wonder we are seeing so many e-commerce businesses starting up. 

While e-commerce may be able to drive business in the coming year, starting an online store still comes with its set of challenges. There are several hoops to jump through before you even begin to generate revenue. 

This guide goes over a couple of the biggest challenges new e-commerce businesses are facing. It also offers several tips on how you can overcome them and start earning revenue even faster.

1. Automate Accounting Tasks or Outsource to the Appropriate Partner

A good accounting department is critical for dealing with daily operations. This department ensures streamlined processes, making it one of the most labor-intensive and extensive in an e-commerce business.

Dealing with accounting tasks manually can be time-consuming, limiting your team members’ availability for other relevant daily goals — you should either outsource these tasks to a credible partner or include automation into your workflow. 

One of the primary benefits of outsourcing accounting is saving time. It promotes efficiency since a separate provider is responsible for keeping track of your company’s income and expenses. Moreover, you can expect your chosen partner to:

  • Evaluate your business performance
  • Ensure statutory compliance
  • Create a reliable budget and projection plan.

Look for any outstanding skills when outsourcing to an accounting partner. The ability to hire from a pool of global talents with exceptional qualifications can give you a competitive edge. They are skilled professionals who can provide:

  • Financial statements and budget reports
  • Accounts payable
  • Legal compliance
  • Inventory cost management
  • Monthly payroll. 

An outsourcing team can help ensure accounting tasks are kept in check and free from careless oversight. 

2. Build Traffic

Start-up businesses should learn online traffic-building basics to establish their brand image and reputation online. If you’re one of these, you need to have a robust SEO strategy in place, along with a strong social media presence. 

Search Engine Optimization

SEO or Search Engine Optimization is an organic internet marketing strategy that helps you rank higher in search results on engines like Google. SEO is crucial, because it puts your business in front of customers when they’re looking for similar vendors online.

A robust SEO strategy will help you implement all the technical aspects required to stay relevant and ensure visibility on search engines. Tools like Google Analytics and SEMRush can help you figure out what people search for, so you can improve accordingly! 

There are plenty of free resources to help you figure out this whole SEO aspect.

Social Media Marketing

In today’s digital age, social media is a huge part of our lives. It’s one of the easiest ways to build your online presence, especially when you’re a fresh e-commerce business. Social media platforms can help you get visibility and raise brand awareness!

One way they do this is through engaging content. Businesses can boost their sales just by creating content that resonates with their target audience. One example is Spotify, with its custom end-of-the-year playlists for customers.

Another key part of social media marketing involves choosing the right platforms. Always base your choice on the platform’s user demographics and share the type of content that resonates with those demographics. 

Make sure to measure the success of your social campaigns. Check statistics such as purchases and click-through rates to identify what’s working and what’s not.

3. Keep Your Site Secure

There are rising cases of fraudsters and hackers attacking host servers to plant viruses and steal confidential data. You should always be prepared for these. 

Card information breaches are common and can lead to your customers losing trust in your brand. One way to keep your website secure is by switching to better HTTPS protocols or using more credible payment-processing systems. 

Obtaining PCI DSS or Payment Card Industry Data Security Standard accreditation is also recommended. This will help you protect sensitive data by making it fully encrypted, and making unauthorized third-party access almost impossible. 

You can also install Firewall plugins and software on your website to protect against cross-site scripting and SQL injections. These plugins protect your site from suspicious networks that can lead to data breaches. In other words, they keep your site safe from viruses.

4. Meet Changing Customer Expectations

Let’s face it — customers have huge expectations. Managing and meeting their changing demands is challenging. 

While it's impossible to anticipate every person's needs and preferences, you can use the data available to make informed decisions about your website and create an experience that sits well with the majority of your target audience.

The data can be obtained through various methods, such as surveys, customer reviews, and user testing. Tracking website analytics and monitoring trends in the industry can also help you stay on top of things.

There are tools to help you analyze the current market trends and e-commerce data. These include Google Analytics and Google Trends, Survey Monkey, and Statista. 

Devise strategies to make the clients feel valued and acknowledged from the start of their buying journey. Start with product updates or notification alerts to establish deeper customer relationships. An example of this is alerting customers when a product they favored becomes available again, or sending abandoned shopping cart reminders.

5. Drive Customer Loyalty

Re-engaging old customers is easier than attracting new ones, which is why customer retention is vital for staying ahead of the competition. Content marketing is the key here. 

Start by writing engaging blogs that resonate with your audience. These content pieces must provide value: if written well, they can become the main reason for your customers to return to your website. 

Content marketing can also serve as a strategy to introduce discounts and customized deals. It can help boost your position in search rankings, making your site rank higher and appear in more search results than other sites. Once again, this will boost customer interaction, because customers know they can rely on your page to give them the answers they’re looking for.

6. Create Competitive Refund and Return Policies

Shipping and returns are critical e-commerce fulfillment services. Slow delivery times, high shipping rates, or no-return policies can all impact your conversion negatively. These can ruin customers’ shopping experience, robbing you of their trust and loyalty. 

Consider the following:

  • Explicitly writing all the information about shipping rates and estimated delivery time
  • The possibility of a special or free shipping code for a first-time buyer who reaches a minimum spending amount 
  • Partnering with companies that offer affordable rates
  • The possibility of same-day pick-up and delivery.

A big part of tracking shipping and returns also means having a solid refund and return policy in place. 

Competitive refund and return policies are challenging for new e-commerce businesses because they require a deep understanding of customer expectations, industry best practices, and unique business needs. A lack of experience, resources, and data can lead to difficulties when developing a strong customer return or refund policy. 

On top of that, new eCommerce businesses often don’t have the resources necessary to offer as many refunds. To combat this, you can create stricter return and refund policies to avoid customers returning purchases as frequently.

Return policies need to be able to prevent return fraud. Tools such as Returnly can help monitor returns per customer and prevent these kinds of scams.

Return policies shouldn’t cause a lot of hassle for your customers. You can offer store credits as a refund method so that it’s easier for both parties. This will also increase the chance of your customers returning to your website and checking out other products. 

Customer-friendly return policies also include:

  • Cash refunds and store credit options
  • Getting a refund of the initial shipping cost
  • Considering home pick-up options to provide convenience to the customer.

7. Choose the Right Technology Partnerships

Technology partnerships refer to the different technology businesses you’ll need to partner with to get your final product or service offering to the client.

These include collaborating with software such as Hubspot for marketing, allowing you to build a custom SEO plan and develop an optimized blog, or Salesforce for omnichannel communication, automation, and customer personalization. These solutions simplify processes and ensure solid organizational structure. 

More importantly, there should be constant communication, transparency, and trust between both the tech company and your business. 

However, tech partnerships can also come with risks. E-commerce businesses must be more vocal about what they want before sealing the deal. Imagine signing a contract with a tech company that turns out to be a poor fit. 

Thoroughly research the tech solution’s abilities and features. Additionally, meeting with the tech leader to discuss work experience, project expectations, and how they can meet your objectives is highly recommended. This will help you make smart, mutually beneficial strategic technology partnerships.

Final thoughts

Starting an e-commerce store isn’t easy. Roughly 20% of new businesses fail during their first year, making this the most challenging time for emerging businesses. 

Paying attention to challenges is key. Implementing strong cybersecurity measures, creating competitive return and refund policies, and continuing to build traffic are all key to ensuring that you’re part of the 80% of businesses that succeed. 

Try to implement these tips to help your e-commerce company overcome the challenges. Doing so may help you move forward into the growth and maturity phases and help your bottom line grow.

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