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Setting up an online business is an attractive venture as it’s relatively easy and requires nominal investment. However, quite astonishingly 80% of online businesses fail to generate revenue and would close up after few initial months. Therefore as an entrepreneur, you should be aware of the various factors that differentiate between a successful and failed online business.

Although every business is unique and has different demographics but they all share come common pitfalls that can be avoided. We encourage you to understand these core mistakes and avoid them to beat the statistics.


Proper Investment

Although an online business can be set-up with just a few hundred dollars. However, to ensure its sustainability, it’s important to have multiple cash infusions into the business. You’ll also have to spend multiple hours and labor work into setting it up properly. Expanding your business online is similar to opening up of a new location and therefore it will require real investment. Retailers would spend thousands of dollars into setting up a new physical location but will be hesitant to spend a few on the online store.

No Cash Flow

Proper cash flow management is crucial in the sustenance of any business. You can’t spend your investment on inventory hoping that the customers would simply run towards your store. You needs to spend properly on marketing so the business doesn’t remain stagnant and sales rise. Spreading out expenses is recommended as it will avoid any cash flow issues. Don’t pay for the inventory up-front but rather a monthly payment plan should be chosen. Reinvest in your business based on actual sales rather than projected ones.

Poor Inventory Management

For ecommerce business, inventory management is quite a crucial aspect in determination of their success rate. With too much inventory on hold, you can literally cripple your business. Also, with too little inventory you can be missing out on sales and losing potential customers and revenue for the business.

Also, don’t order from a single vendor as it will limit your options. Therefore order at different inventory levels and at different times and manage it accordingly. Shipping costs drastically affect the profits margins therefore always account them whilst reordering a product.

Can’t Handle the Competition

With large retailers already established within the market, it’s quite impossible for startups to compete and survive while selling the very same products. As a business owner, it’s important to understand that mass-market products will be extremely difficult to sell. Therefore think of unique products with less competition and find a niche which you can profit to your benefit.

Website GUI is bad

Most businesses tend to fail as their websites aren’t appealing towards the customers. It isn’t just about the aesthetics of the website but rather the security, functionality, adaption to various platforms and speed are some of the key factors. Presently, there are multiple tools available that can allow you to build a quality website for your business. However, regular management of the site is imperative so hiring a technical guy within your company will be great as well.

Poor Product Photography

Most small business would compromise on the quality of their product photography. Customers can’t actually inspect a particular product and will only be inclined towards it visually therefore having poor product photography is a cardinal sin of retail. You need to make sure that the images clear, clean and focused so you can generate traffic towards your website.


Many new online businesses expect results almost immediately and would get demotivated once their dreams get shattered. Realistically, online stores take time to build and it might even take months before you start making some significant profit. If you are determined to start, checkout this platform: www.shopify.com/online


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