Every startup has its own challenges at the beginning of inception and during the growth phase. In e-commerce startups, there are at least 7 common problems, which we’ll discuss shortly.

1. Inexperienced Founders (poor leadership)

Starting any business isn’t merely about what, how, and why. But it’s also about who. Starting an e-commerce business requires in-depth knowledge of how consumers behave online and using available market, competitor, and consumer data for making decisions. Inexperienced founders might not have the necessary analytical and leadership skills to carry the burden of a fast-paced and always changing startup.

2. Market Unreadiness

During Web 1.0, many startups failed due to the market’s unreadiness for the products and services rendered. Webvan, for instance, was an online grocery delivery service similar to Amazon Fresh today. However, the former didn’t work out, while the latter is a successful venture simply because today’s market is ready for such convenience. People are no longer turned off by the idea of buying vegetables and other grocery items from online stores. Thus, recognize the so-called “bad timing” and “good timing” in starting a particular business.

3. Poor Business Model

A good business model can make or break a business, literally. It’s important to recognize the sources of revenue, customer base, products, and funding. Groupon, for instance, was a rising star. However, the business model doesn’t make it grow as fast as planned. Why? Because almost every business can start its own “daily deals” and “discount coupons,” so it has no barrier of entry.


Wayfair and Blinds.com‘s dropshipping business model, however, has been known to be quite sustainable. This business model allows entrepreneurs to start an e-commerce store with almost zero startup capital as there is no need for buying inventory. A product will be purchased with wholesale price after it has been ordered and paid for by the customer. And it’s also hassle-free as the order will be fulfilled and delivered by the dropshipping supplier.

4. Lack of Funding

It takes money to make money. With money, you can use the best possible tools to assist with research, marketing, operation, accounting, taxation, and data analytics. While conventional brick-and-mortar on-site businesses require significantly more startup capital, e-commerce enterprises still need some funding, to begin with.

The good thing is, there are free limited-time trials for using online services, tools, and platforms. Make good use of them so you can experiment a bit before committing to using or not use the products. Shopify, the popular e-commerce platform, offers a 14-day trial. Next, consider obtaining seed funding for expansion.

5. Lack of Planning

Inexperienced founders may forget to plan, which can have a devastating effect on the business. Plan and prepare well in advance. Always have contingency plans in place and be flexible enough to cope when things go awry. The written business plan, however, isn’t sufficient to cover all the key areas that might need more attention. You need a specific what-to-do-next type of plans after gauging all the possible risks involved.

6. Lack of Good People

Good people make a good company. There is no doubt about it. The founders, employees, suppliers, and external business partners determine the longevity of a business. After all, what makes a place meaningful is the people. Good people also create good corporate culture, which attracts and retains more good people who will take the business to the next level.

“Good people” are individuals who are loyal, responsible, proactive, caring, sincere, and trustworthy. They also interact well with other people, including customers and fellow employees. Thus, make it your mission to hire and retain good people right from the beginning.

7. Poor Management and Marketing

Management and marketing activities must be handled professionally. This being said, the management team must update themselves on how to manage resources, operation, and projects better.

Marketing campaigns must also be executed well, as, in the initial stage, not many people know about the business yet. However, strategize well, so you aren’t “blank shooting” with no or low-ROI campaigns. One of the latest trends in e-commerce marketing is Instagram influencer marketing and hashtag for likes, which allow you to attract consumers directly.

In conclusion, starting any business involves risks and planning. Know your risks well and plan well. In an e-commerce business, research the risks with the latest data analytics tools and plan well with various automation tools.

About the Author

Jennifer Xue is an award-winning author, columnist, and serial entrepreneur based in Northern California. She is also a digital strategist for Oberlo. Her byline has appeared in Forbes, Fortune, Esquire, Cosmopolitan, Business.com, Business2Community, Addicted2Success, Good Men Project, Positively Positive, and others. Her blog is JenniferXue.com.

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