Top 5 Reasons Why Ecommerce Businesses Fail - Funnel Science

Top 5 Reasons Why Ecommerce Businesses Fail

Online Shopping In Real Life

I would estimate that 99% of ecommerce websites are just like the video.

The average ecommerce conversion rate is just 1%. So if it takes 100 customers to get 1 purchase, you will have a difficult time growing your business. A good ecommerce conversion rate is 5% and the highest that we have seen is 63%.

I want to tell you a quick story about a business owner that I once met who had set a goal to make $300,000 in ecommerce sales over the next 12 months. The business started with field sales reps going to big box retailers and now they were pivoting into online retail. Recently, I was introduced to a new consulting client name Robert who owns a golf apparel business with national distribution in some big name retail stores.  Robert was perplexed because people where buying his golf bags and clothing in retail brick and mortar but would not buying from his ecommerce store.

After our very first meeting, I received an email that started off:

“WHY?”Google Analytics Ecommerce Conversion Optimization

“Haven’t gotten one sale in the past few weeks, yet have had like 1500 uniques with 2min avg time on site and 42% bounce rate.  I don’t get it!  It’s terrible!”

Here is the Analytics report Robert referenced

Background: Robert’s business started in 2009 and he had been working with an SEO consultant for almost 2 years when he was first referred to Funnel Science. He thought he had been doing everything right and his annual sales were now $800,000 but his ecommerce sales were literally $0.00.  In the last 6 years he had never made an ecommerce sale but he did get leaders from dealers that wanted to resell his products. Robert wanted  to know why is it that he has thousands of visitors to his ecommerce store every month and few if any sales to show for it?

After working with hundreds of ecommerce companies, I have compiled a list of the most common reasons why ecommerce fails.

Top 5 Reasons Why Ecommerce Businesses Fail

1) Analytics tracking not properly configured – The most simple reason you are failing is because you do not have your Analytics reporting implemented correctly. Therefore, you can not manage what you do not measure.

2) Traffic quality – 97% of your traffic will come from people who are not buyers. 96% of first time visitors will not purchase from your site.

Just because you have visitors on your site with a decent bounce rate and spending time on your site doesn’t mean you are going to have sales.

3) Website sucks. Do I need to same more?  Whether it is the design, the photos, shopping cart or page speed, if it sucks, you will fail. Why, because there are too many other options for customer to choose to purchase from that do not suck!

4) Shopping experience sucks – just because you build it and you get visitors on our site, does not mean they are going to buy.

When there is a poor shopping experience, that is typically a reflection of the business and the underlying people and process. If your competitors offer free shipping and you don’t, you will lose.  You need to work with business consultants, UX designers and analytics professionals that can help build the path to the best shopping experience.

In the meantime, watch this video really funny video that shows what a bad shopping experience looks like.


5) Products, and Pricing Alternatives – the back button is only 1 click away and it takes about 2 seconds to find your competitors online.  Shopping cart abandonment is the most important metric for  ecommerce stores to monitor and optimize. If you are not tracking the abandonment and working to improve, your ecommerce store is going to fail.

Product reviews are one of the most important factors for both your products and your store’s success. Without great reviews, you will find getting people to purchase through ecommerce will be very difficult. It is estimated that 1 in every 3 customers will check your reviews before they purchase.

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