Do you dream of starting an online store? Sure, why not! If you do it wisely, such a business may be a good idea. However, e-commerce mistakes happen to everyone.
So that’s right – do e-commerce wisely. But what does that mean exactly?
This is nothing more than trying to avoid the e-commerce mistakes that others have made.
Of course, you will not avoid all of them. It is an indispensable part of the learning and growth process. But if even some of them can be avoided, then it’s worth it.
Today, based on my own experience with my own online store, I am sharing lessons that I would give to anyone who came to me and asked what e-commerce mistakes I made at the beginning.
What online store are we talking about?
The online store I built and run is stipl – equestrian shop, dog shop. In short: a niche e-commerce for outdoor and animal lovers, with an emphasis on horse and dog lovers.
A few additional details at the beginning to outline what I’m talking about (so that you can relate to what I write below more easily):
- The shop is mostly built by me, with the gentle help of a few people, from time to time
- I bootstrap everything, no external money (no investors, grants, subsidies, etc.)
- Without borrowing money from nowhere (no loans, payday loans, credit cards, etc.)
- The general assumption is that I am primarily investing my time; and money only when it’s necessary
- I learn and make mistakes; I’m not pissed off, it’s not a business I’m going to live on in the near future; it is a marathon, not a sprint – it is supposed to grow to become a healthy, earning business in the long run
- It is supposed to be international
So much for the introduction, let’s get down to business. Bon Appetit.
33 lessons for each starting (or still not growing) online store. E-commerce mistakes that should be avoided
Some of them are quite simple and obvious; some are not. Hence, if any of the discussed points interest you more and would like to discuss it more broadly – let me know.
Okay, let’s get started. Here is my subjective list of e-commerce mistakes/lessons for every e-commerce business.
1. At least good knowledge of the target audience
I am a horse and dog keeper myself. I have a dog, I ride horses, I have my horses, I take part in competitions, I know other dog breeders and horsemen – quite a lot. So I did not even try to do in-depth research. It seemed to me that I knew perfectly well who I would sell to.
And I completely missed it. It turned out that there are too few people interested in products I wanted to sell. In a word: there will be no growth based on them. After doing the actual research, it turned out that I need to sell to someone completely different.
Pro tip: here’s more on reader persona and buyer persona.
Lesson no. 1: Do your target audience research. Even if you think you know who it is.
2. Take care of the right number of products in store
I never wanted to create a store with the highest number of products, with the widest offer on the market. I was interested in building an online equestrian / dog / outdoor niche store, with a maximum of several producers. But the ones from the top shelf, the best ones, the kind I trust.
However, this turned out to be wrong thinking. In this industry, customers expect one place to shop. They don’t want to walk on several sites and buy something here and something else there. And if there are those who want to do shopping in this way, they simply go to the manufacturer’s website and buy there (and here’s one interesting fact: in this industry, unlike many others, manufacturers have their own online stores; so on the one side they supply you, on the other – they compete with you).
I even did a survey on one of the horse riding groups on facebook. It confirmed my observations.
Lesson no. 2: You don’t need to have everything. However, you won’t do business if you only offer one or two products to the client (and you’re not a producer of these products) and they will have to go somewhere else for the rest.
3. Take care of the right number of producers
Directly related to lesson number 2. My clients didn’t just want more products. They also wanted more producers.
It turned out that even if producer A produces both B and C, it does not mean that customers will take both B and C from them. A large number of customers will take B from A, and C from D. Still others will take B from D and C from E.
Okay, seems a bit complicated.
Suppose we have the producers like Marstall, Masters and St. Hippolyt in our store. They all produce fodder for sports horses. Basically they are all very similar to each other. The composition does not differ much, if at all. Same weight. Quality is very good everywhere. Every single one has a good, strong brand on the market.
Still, habits, good advices from others, beliefs – all this causes quite a large stratification. One prefers feed to Marstall, another to Masters, another to St. Hippolyt. And if you ask why this and not that? They will not be able to provide specific arguments. They just prefer this way.
And if you want all of them to buy in your store, you must have all three producers in your store. Otherwise, the client will go somewhere else – because point 2.
Lesson no. 3: You do not need to have all possible producers in your store. But you won’t do the business with just one of them on board (assuming you’re not that producer, of course).
4. Be careful with products that nobody knows
A newly-created store and products that no one knows are a simple path to failure. And it doesn’t matter if the product you’re selling is good or not. Whether you believe in it or not. If you think it’s great or not. It does not matter whether it is conquering the foreign market. Whether it looks good, whether it tastes good, whether it is healthy or not.
If the producer has not done his homework and did not promote it on your market, no one will buy it here. And especially in an online store that has not yet been known to anyone.
Lesson no. 4: In a new e-commerce store, it is a good idea to have products that people already know.
5. Watch out for producers that no one knows
I found out about it the hard way. Without going into details about who it is, just take my word for it. The producer is a really good one. It is well known company on the foreign market, it has an excellent offer with great products.
But again – as in the case of point 4 – if it is not known in your market, you won’t sell its products in the newly created online store. Especially if your competitors have similar products from another – well-known on your market – producer.
Lesson no. 5: In a newly established online store, it is worth having producers that people on your market already know.
6. Dropshipping is good but…
Nothing revealing, but still. Dropshipping as a method of operation is a very good idea in many situations. However, not always, not everywhere, not in every industry.
In some situations, for some types of products, you need to have stocks – even if small – in place. To ship faster; to provide a better shopping experience; to avoid situations where the manufacturer or wholesaler does not ship something on time; to avoid situations where your supplier doesn’t ship what it should.
I have experienced similar situations more than once.
Lesson no. 6: Dropshipping is not the best model in every possible case. It all depends on what business you want to build and what shopping experience you want to offer. Perhaps a better solution would be to operate in a hybrid model?
7. Not having your own warehouse is not necessarily a good idea
Here directly related to point 6.
The lack of a warehouse has undeniably big advantages, mainly related to reducing the costs of operations in business. For me, however, with the kind of business I run, with the shopping experience I want to give to my clients, I need a warehouse. Small one, but still.
To ensure the quality of service, I need to have some of the products in place and not rely so much on suppliers and couriers.
Lesson no. 7: In many online stores it is worth having a warehouse, even if only a small one.
8. Marketplace platforms and presence on them
You can make e-commerce mistakes in your own store, but you can also make mistakes when trying to sell the products in online marketplaces.
Because the presence on marketplace platforms has its undeniable advantages. But also a lot of disadvantages.
In my online store, at first I decided that I need to be on all possible marketplace platforms. And so we appeared wherever we could. We introduced offers, did what we needed to do and waited. What happened? Absolutely nothing. Not a single item or a single product has been sold on any marketplace.
What has turned out? First of all, users of these marketplaces don’t want to buy this kind of products on these platforms. They choose well-known online stores for that. Secondly, the competition in these marketplaces is so big that without additional promotional activities, you won’t sell too much on them. Third, margins in online marketplaces can sometimes exceed the margin you have on a given product. Fourthly, if we add up the costs of paying for additional promotional activities on the platform and the commission we have to pay to the platform for the sale, it turns out that this sum exceeds – sometimes significantly – our margin.
I’m not saying that online marketplaces are bad. Even today I claim that they are worth being there.
Lesson no. 8: It is not worth to be everywhere, but it’s worth to be on selected marketplace platforms – maybe on one or two. And do something more than just adding products there. You also have to think carefully which products to add there and which not. And don’t forget to create a big excel sheet that will tell you what will pay off and what will not.
PS. It’s especially worth being in Deor as long as you sell pet/animal products 😎
9. Price comparison websites and presence on them
There are e-commerce mistakes you can make in online store, there are mistakes in marketplaces, and there are mistakes in price comparison websites.
It’s a bit like in the case of marketplace platforms. For my online store, I decided that it is worth to do this experiment and it’s worth to try to be in price comparison websites. And I took a lot of time to appear in them.
And today I am not entirely sure if it was worth it.
If I would sell electronics, it would probably be worth it. If I would sell other everyday products, where my buyer could be simply everyone – I would definitely try to be in comparison websites. But with my type of products – not really.
Lesson no. 9: Not every online store should be in price comparison websites. First, you need to do research and check whether your buyer use the given comparison platform. Are your competitors on it, how much will it cost to promote your products on these platforms, how much commission will we pay and for what.
10. It is worth taking care of the right SEO strategy
Each of us thinks we are good at SEO and online marketing. And then comes a reality.
Let me give you an example from my e-commerce experience.
Until now, long tail for me meant as much as content marketing, blog articles and similar content subpages that were ultimately convert a reader / user into a customer. And with a similar conviction I approached the SEO strategy for Stipl. I thought it was important for me to position my homepage (for some huge and popular keyword) and blog articles for my long tail keywords.
A few months later I’ve realized what mistake I made. In e-commerce business, this strategy is wrong. Especially in such a store, in a niche like mine. Here, the long tail is the individual product and products’ categories subpages in the store.
My client does not enter ‘equestrian shop’ in the search engine. They type ‘stirrups’, ‘horse fodder’, ‘horselinepro lymphatic’. They look for a specific type of product or a specific product. And if I think about it, I do the same myself. The blog is only supposed to support product or category pages, and the home page – it will come one day and is not that important.
Lesson no. 10: If you can, ask some SEO specialist for help.
11. Paid advertising for a shop that nobody knows is often a bad investment
Seemingly obvious obviousness, but still I was counting on something else. Because if I pay, I require. If I pay, I will definitely succeed. Well, not really.
A paid ad, even well-organized, planned, well written – if its goal is to convert and increase sales, and concerns a store that no one knows – will not give satisfactory results. If it gives any at all.
Lesson no. 11: First things first, i.e. brand building must be the first, good associations first, anchoring in the mind of a potential client. And if any paid advertising at the beginning, it is primarily aimed at building brand awareness, not at conversion and sales.
12. You have to be careful about the appropriate form and place of promotion
On the one hand, as above – focusing on conversion and sales, instead of building a brand, will give bad results at the beginning. I found out about it the hard way.
On the other hand, the form of promotion and its place are equally important.
Form, because we can do text, image, video, content marketing and other ads. I completely missed the form of promotion – I invested in text ads in the search results (counting on sales and conversion), and it turned out that first I need to build a brand (and here graphics and video, possibly content marketing work better).
And place. Because you have to advertise where the target group is. In my case, as I did not hit the target group at the beginning (point 1) and the purpose of the promotion was wrong (point 11), the place of the advertisement turned out to be inappropriate. It was necessary to target the ad much better and appear stronger where my target group is. And there to invest in appearing in the minds of potential customers.
Lesson no. 12: If you can, invest in a paid ad/SEM specialist.
13. Remarketing is a must
We all know remarketing is extremely important. But so what if we don’t do it? And its lack is one of the biggest e-commerce mistakes.
Because we need it to be where the customer is and to remind them about ourselves. And it’s important to remind the potential customer that the product they were interested in, they can get from you.
Lesson no. 13: If you are doing e-commerce business, you absolutely must do remarketing.
14. There is no point to try joint promotions/co-marketing at the beginning
I am a big fan of joint promotions and the so-called joint marketing / co-marketing. In short, co-promotions of two or more brands at once.
At PayLane, I was doing quite well. We went to the market with a common message, using the channels of both organizations. However I forgot that we could do it there, because we had a well-known and appropriate position in our niche.
In a newly created company that has neither the position nor the proper discernment yet, this will not work. Neither in e-commerce, nor in any other type of business, nor in the equine, canine, or any other industry.
Lesson no. 14: First get to know your customers, first build a brand, then you can dream about joint marketing campaigns.
15. It’s hard to establish good business partnerships at the beginning
Just like in the field of joint promotion (point 14), also in every other aspect related to cooperation and partnerships – as long as you are not well known on the market, nobody will want to do anything with you. The necessary minimum and that’s it. You can’t count on anything else.
Especially in an industry where producers, suppliers and sellers each have their own online stores. And everyone fights to sell on their own platform, through their own marketing channels.
Lesson no. 15: Get to know your customers first, build a brand first, then you may dream of getting more out of your partnerships.
16. Direct connections with producers are fine, but not cooperating with wholesalers is a mistake
It seemed to me that by going directly to the manufacturer, on the one hand, I would have more interesting brands in my offer, and on the other hand, I could negotiate better terms of cooperation.
Here and here I was wrong. Of course, there are brands that you won’t find in wholesalers. But some of them will be found. And very often you will not negotiate better conditions by talking directly to the manufacturer. As long as you do not have a position on the market and you do not order large quantities of goods, the terms of cooperation will be so-so.
Lesson no. 16: Working with a wholesaler can make a lot of things faster and cheaper.
17. The cost of delivering products to you is high
Something that I completely forgot at the beginning of planning my own e-commerce business. The delivery of products from the manufacturer to you/your store costs too. And it is not so little. I don’t know why, but for some reason I thought that the cost would be zero (because the manufacturer would want me to sell their products?). Or small enough to be negligible.
I was very wrong here. The cost is the same as for each single courier delivery. It is not small, it is not negligible, and with small batches of ordered goods, it can significantly reduce your margin, and even make a given deal unprofitable. Especially (as in my case) when we are talking about large and heavy goods, where it is often impossible to even put several items into one package.
Lesson no. 17: Include product delivery costs from manufacturer / supplier to you in your calculations.
18. The cost of delivering products to customers is high
There are a lot of memes on this topic.
However, I did not know them before. I only got to know them the hard way.
The customer looks at the cost of delivery. And they always bother them. Always. Because they always think that these costs may be smaller or may not be at all. And there is a lot of truth in the fact that the customer is more likely to pay €30 for a product than €25 + €5 of delivery costs.
Somehow it makes a difference in our heads.
Lesson no. 18: The lowest possible delivery costs are what your customers expect from you.
19. The margins of some products are really – and I really mean really – small
If someone asked me… from all of your e-commerce mistakes, which one is the biggest? Which is or was the most painful? I would answer right away, without thinking: margin, poor product margin management.
Because the margin in e-commerce can be really small. And I really dealt with very low margins before (11 years in online payments where you can often see margins below 0,5-1%). Except that when we’re talking about payments, you have as follow: number of clients/merchants, number of transactions of a given client/merchant and (your margin * value of a single transaction of a given client/merchant). All of these variables are involved in generating income for you.
In e-commerce, you do not have this additional multiplier resulting from the number of transactions of a given customer. So here we have: number of orders and (your margin * value of the basket). And this does not give you good revenue, but often pocket money.
Lesson no. 19: In the e-commerce business, because of low margins, you really need the scale.
20. Internationality cannot be achieved solely through presence in international marketplaces
Of course, you can add your products to Amazon or some eBay. Sometimes it’s even worth it. But that’s not the only thing that make business international.
On a daily basis, I also help various online businesses to go beyond their domestic market. And every day I hear from various ecommerce stores that it’s just a website translation and adding products to the foreign version of Amazon.
Well, not really.
Online business such as SaaS, yes – if you do it wisely – can be scaled relatively quickly and cheaply. However, it is more difficult with e-commerce and physical products. Here, apart from translation, Amazon and everything that you deal with in the SaaS business (domain, marketing, foreign language support, customized offer, payment methods, business development, accounting and tax changes, legal changes, maybe an office, maybe employees), there are additional elements, for example related to logistics in this new market, or e.g. obligations regarding the packaging of products sent by us or their composition.
Lesson no. 20: Doing an international e-commerce business with physical products is much more difficult (and more costly) than with a business selling virtual services. If you can afford it, use the services of a specialist who will help you with this.
21. VAT is different for different types of products
It seems obvious, but many people are surprised when I tell them about it. But that’s the truth. When you run a homogeneous business and sell one type of product, as in most SaaS online businesses or online trainings, or even FinTechs or marketplaces, you have one VAT rate. However, this is not the case in online stores.
In e-commerce, you sell different products, different types, from different manufacturers. So it may happen that you will have one VAT rate for some of the products, and completely different one for another type of products.
Lesson no. 21: Talk to the accountant and be careful. In online stores, you may find that different products will have different VAT rates.
22. Think twice about your discount policy
Everyone thinks at first that discounts are a great way to increase interest of their store.
And it is often so.
However, badly planned discount policy can drown any business, including e-commerce. Percentage discounts? Good idea, but remember that with different types of products, you have different margins. And it happens quite often. Amount discounts? A good idea, but only when some value of the basket is exceeded, and again – different margins will give a different amount.
And if we add the costs of delivery, storage, packaging, tape and printing. You know what I mean.
Lesson no. 22: Think carefully about your discount policy. And calculate it in all possible ways before offering anything to anyone.
23. Promotional campaigns based on discounts are a road to nowhere
Sometimes it’s worth giving a discount – of course it is. But sometimes it’s not worth it. And it is definitely not worth basing your entire marketing strategy on the policy of increasing discounts.
In such a scenario, we will build a brand whose only value will be the constant giving of subsequent discounts and this is what our customers will expect from us. In addition, in this way we will further reduce our own – often really small – margin.
Lesson no. 23: Discount marketing campaigns are good. As long as they occur once in a while and are not the only idea for advertising our store.
24. Discounts can kill many deals
From my own experience, I know how easy it is to drown a seemingly good transaction by bad use of discounts. I often had a problem with that at the beginning.
Think for yourself.
You want to give a percentage discount. It seems to you that you need to give a discount of at least 10%, because a lower discount will not encourage anyone. So you give 10%. And you give it to everything, because you don’t want to make stars on the offer and the small print of the text about what the discount applies to and what not. And it turns out that people enjoy. But they add different products to the cart. And these different products have different margins, some below 10%. And you pray that there will be more of those with higher margins. Because if not, you pay extra for the transaction.
You want to make a quota discount. €15 for the first transaction after subscribing to the newsletter. After all, all clothing brands do this. And great. But it turns out that people do shopping for €30, and this means you lose money, because you do not have a 100% margin on the products, and these particular customers do not necessarily want to make further purchases on your site.
And I still do not count here the cost of delivery from the manufacturer, storage costs, packaging, printing, tape, people, payments, etc.
Lesson no. 24: Discounts do attract potential customers to buy. But they can also make many transactions unprofitable – and this is relatively often the case.
25. Social media works but often doesn’t work
E-commerce companies are often happy because their social network channels are doing well. The number of follow / likes is growing, the number of likes for their content is growing, the number of comments is growing, everything looks nice.
But so what? Likes cannot be changed into money. Just like users’ follows or comments.
Social media is a good channel for reaching a potential customer. This is a good way to build our brand. It’s a nice way to keep in touch with them, for customer support. Oh! It is often a really good way to sell or increase traction.
But for most of the stores time spent on social media is wasted. Because they do poor-quality marketing on social networks; because they do it in a way that doesn’t bring any value to the business; because they expect the results of X and focus on activities that bring different results; because their goals are wrong.
Lesson no. 25: It’s worth talking to a specialist about marketing on social media. By doing it yourself (without any professional knowledge nor experience), you will often achieve results that differ significantly from your goals.
26. Social media is a lot of work
I have been running various social channels for a long time, mine own, company-focused and product-focused. From Facebook, LinkedIn, Instagram, to TikTok. And, immodestly speaking, I do it well.
But there is one thing I forget very often, almost always. Running social media channels, which are good, with interesting content, involving the community, and giving marketing results, is a lot of work. And by a lot, I mean really a lot.
Lesson no. 26: Quality over quantity. And it’s best when you can do both. The quality and frequency / high regularity of publications is the key to building social channels that have a chance to achieve something.
27. You can also sell on social media, but not everything
There are three ways to sell on social media:
- You can sell by promoting your products on your page and by redirecting user to the store
- You can build a store on a social platform (e.g. Facebook Shops) and sell there
- You can use the marketplaces available on the social platform (e.g. Facebook Marketplace)
ad1. It works, but the organic reach is and will be really small (because of an external link, because people don’t like promotion, because Facebook wants you to pay for the ads of your content etc.)
ad2. It’s quite interesting thing, plus not all products can be sold on them (e.g. saddle pads are treated as medical materials and do not comply with the Facebook’s regulations)
ad3. It probably does not work, dedicated to used (?) products
Lesson no. 27: It’s worth rethinking your social sales strategy from the beginning and sticking to it. In my case, the hybrid model works best (points 1 + 2), which does not mean that it will work the same for everyone, or that it will not change over time.
28. You can also keep your product offer in social media, but does it really work?
Presenting your product offer on social media platforms (such as Facebook Shops) has its undoubted advantages. In my case, however, it turned out that these advantages are not as obvious as shortening the purchasing process for the customer.
There are certainly stores that make better use of this module. In my case, it turned out to be useful only for those who quickly, without leaving the social platform, want to learn more about the product (e.g. get to know its variants, view photos, prices, etc.).
Lesson no. 28: Not always something we think that will work somehow actually will work like that. Sometimes the users will use a given mechanism or functionalities differently. And there is nothing wrong with that.
29. Facebook is more difficult than Instagram
Probably many will not agree with me here, but from my own – e-commerce – experience, this is the conclusion that comes to my mind.
Building simple user engagement on Instagram is easier than on Facebook. Thanks to hashtags on IG, we can reach users who do not know us. Here, thanks to nice pictures, we can get more interactions. Here, thanks to Stories, we can show more backstage. For a business based on the visual aspect – and this is undoubtedly the case with many e-commerce – Instagram is a medium easier to build reach than Facebook. Which, of course, does not mean that it is easy. Just a little easier.
Lesson no. 29: It seems natural for e-commerce businesses to appear on Facebook. Perhaps, however, it is worth appearing also outside of it? It may turn out that building your reach on other platforms (maybe Instagram, maybe TikTok, maybe Pinterest?) Will be easier or more profitable for us for some reason.
30. An active community does not mean a buying community
Not every fan will buy, not everyone who interacts with our content will be interested in it or in our products. Sometimes people interact with the content because they like the picture, sometimes because someone else has clicked or commented on it. And sometimes for another reason.
An active community is not the same as a community that is eager to buy. In e-commerce, as in any other industry, a typical sales funnel works.
Lesson no. 30: It is worth realizing from the very beginning that in e-commerce, as in all other types of business, we are dealing with a sales funnel and we must properly take care of the user at every stage. We need to convert a potential user into a real unique user on the website, such a user into a potential customer, a potential customer into a real customer, an actual customer into a returning customer. In social, there is also the aspect of converting into a community member and from a community member to a user or customer. It’s a long process and a lot can happen.
31. Email marketing is good but difficult
Every email marketing specialist I’ve met in my life has always said one thing: email marketing is the most effective and cheapest type of marketing that has been invented on the Internet. And it is true.
But on condition that we do it well. And hardly anyone (very few) does it well.
Lesson no. 31: Email marketing is worth doing from the very beginning. But in a good way and when we have never done it before – with the help of a specialist. You have to build the database yourself, take care of the mailing lists, send interesting, technically well-structured mailing, etc.
32. Just because competition is weak on the Internet does not mean that you will easily outperform them
One of the biggest mistakes I made in analyzing this business before I started it. I saw what potential competitors were doing and when I judged that they were doing it wrong, I figured out chasing them would be fast. Nothing could be more wrong. E-commerce mistakes happen to them, they will happen to you. And just because you think it will be easy doesn’t mean it will be.
Lesson no. 32: Just because the competition looks weak, doesn’t mean it will be easy. Many other factors can testify to its popularity (e.g. brand awareness, habits, the size of the offer, discounts, its physical points of sale, the specificity of the industry, etc.).
33. If the industry likes to buy physically, it means it likes to buy physically
Of course, more and more sales are shifting to the Internet. But that doesn’t mean it’s all moving or will be moving much more any time soon. And it does not mean that your niche will also want to buy online. In my (the equestrian one) it turned out that this layer of physicality is extremely important to the client.
Lesson no. 33: Before you start launching your own e-commerce, first find out more about your target audience, e.g. what their shopping preferences are and whether they will be interested in buying online at all.
So what? All clear? You already know what e-commerce mistakes happened to me and how to avoid them in your store?
E-commerce – like any business – has its own specificity. And it is not a better or worse business at all. It is not easier or more difficult than the others. It’s just different. It is also a sign of the times, because it cannot be denied that more and more purchases are being transferred to the Internet.
So is it worth investing in e-commerce? If you are a manufacturer of physical products, then yes – it’s worth taking care of the distribution of your products on the Internet. If you are an entrepreneur who is looking for a business idea? Then it depends – on many factors, as with any other business; including mainly what excel shows you.