5 E-commerce Management Mistakes and How to Avoid Them
E-commerce is a lucrative business venture for new entrepreneurs. A third of the global population shops on the internet today, with every indication being that this industry will grow steadily into the foreseeable future. If you’re keen on venturing into this space, let nothing hold you back. However, there are a few e-commerce management blunders and pitfalls that have failed ambitious entrepreneurs before you, which you must avoid to succeed. These management mistakes can be summarized into 5 categories:
Contents
1. Website design mistakes
Your website is where all the action happens; it’s your online shop. A professional, responsive, functional, and attractive website is the heart of any e-commerce business. To ensure that clients get a fantastic experience in your online shop, you need to avoid these web design mistakes:
i. Choosing a confusing, awkward, plagiarized, too long, hard-to-remember, offensive, spammy, or irrelevant domain name.
ii. Having an unattractive website design, particularly with regard to color patterns, logos, organization, etc.
iii. Poor UX, navigability, and functionality due to too many images, spammy pop-ups, or adverts.
iv. Poor SEO optimization.
v. Lackluster visualization of products through poor-quality images or video. The visuals could either be too small or too large, too bright or too dark, or too vague/generic.
vi. Un-scalable website design, which limits your future expansion plans.
vii. Missing or poorly-positioned product search and navigation options.
viii. Poor or misleading product descriptions.
ix. Fancy designs with unnecessary embellishments, e.g. moving graphics.
x. Being unfriendly to mobile users. Most online shoppers use smartphones and tablets.
2. Financial management mistakes
Approximately 82% of small businesses, both online and offline, fail due to poor financial management. To be among the other 18%, avoid these financial management blunders:
i. Neglecting to budget for recurring annual costs, so you end up spending money haphazardly.
ii. Limiting the range of payment options for your clients, consequently locking out a significant portion of your target audience.
iii. Not factoring foreign exchange and international transfer fees in your product pricing for foreign markets.
iv. Failure to meet tax standards, either your local market or international e-commerce tax obligations, which results in unwanted fines and penalties.
v. Over-rewarding yourself (taking money from the business) and compromising your cash flow.
vi. Not reconciling your records regularly. This becomes a major headache for you when it’s time to file your taxes.
vii. Holding too much inventory, so you end up with no cash and a huge load of dead stock.
viii. Not factoring in product return costs in your budget, e.g. return shipping costs and repackaging costs. Even the most perfect products get returned sometimes.
ix. Not tracking the effectiveness of your marketing campaigns in terms of traffic data, organic analytics, conversion rates, etc. As a result, you end up spending big bucks on futile marketing campaigns.
x. Overspending on marketing. As a general rule of thumb, you should keep your marketing budget between 5-10% of your monthly budget.
Note: You can avoid most of these financial pitfalls by investing in an accounting integration account. With such an ecommerce banking alternative, you can automate fraud detection, inventory management, and payment processing. You can also automate data synchronization for all your sales and payments, making bank reconciliation a breeze. The tool will keep all your books updated, accurate, and perfectly reconciled.
3. Marketing Mistakes
Proper marketing will help you drive awareness and action toward your e-commerce business. You can market your business via email marketing, social media marketing, search engine optimization (SEO), and other digital marketing platforms.
Besides overspending on marketing or failing to track the effectiveness of your marketing campaigns, here are other marketing mistakes you must avoid:
i. Not defining your target audience, so you end up marketing to audiences that will never convert.
ii. Not understanding what makes your target audience tick. That includes not understanding their pain points, language, values, or favorite social platforms.
iii. Not using social media effectively. This includes posting poor images, not posting at all, posting offensive content, not engaging social media users, or over-posting.
iv. Lack of a strong brand message or identity, making it hard for target audiences to identify with or trust your online brand.
v. Not incentivizing existing customers to review your products online. This leaves your e-commerce business without the much-needed social proof.
4. Customer service mistakes
No matter how good your products or prices are, your business will struggle to retain customers if the customer service is substandard. Here are the mistakes that lead to a poor customer experience:
i. Poor feedback channels, making it hard for customers to air their opinions and grievances.
ii. Slow response time or no response at all to user messages on social media, your website, over the phone, or emails.
iii. Complicated buying and checkout processes, e.g. when you demand that customers set up an account before making a purchase.
iv. Hidden or unclear terms or fees, giving customers a reason to think of your business as sneaky or spammy.
v. Vague, unfiltered search results due to poor usage of keywords in your product descriptions.
vi. Displaying products that are out of stock, which depicts your business as dishonest.
vii. Reckless or substandard packaging, leading to product damage during shipping.
viii. Having an unclear return policy, or no return policy at all.
ix. Not incentivizing return customers with discounts, coupons, loyalty programs, bonuses, and other promotional offers.
x. Poor data security, leading to the loss of the personal information that clients entrust your business with, e.g. their addresses and credit/debit card numbers.
5. Order management mistakes
Order management is the process between when a client makes an order to when you deliver the order to their doorstep. Poor order management leads to dissatisfied customers, lost credibility, a soiled reputation, and lost business. For proper order management, avoid these mistakes:
i. Lack of inventory transparency, whereby clients aren’t quite sure of a product’s availability or shipping timelines.
ii. Inefficient order preparation, leading to shipping delays.
iii. Poor inventory forecasting, so you end up being reactive (instead of proactive) to seasonal demand fluctuations, e.g. around the holidays.
iv. Ineffective inventory tracking, resulting in ineffective supply chain management.
v. Failure to understand international import laws, rules, and regulations, leading to non-compliance and, by extension, problems at border customs. This precipitates late deliveries and additional logistic costs.
vi. Lack of an order management system that identifies data gaps early on. Data gaps such as missing client addresses or order sizes lead to delays, wrong deliveries, and frustrations.
vii. Overselling on different platforms due to your stocktaking limitations- your business’ inability to keep up with the rate of demand. As a consequence, you end up selling the last piece of inventory stock to multiple customers.
viii. Failure to automate the order-picking process, leading to missed deliveries.
Conclusion
Your odds of success improve significantly when you avoid the 5 e-commerce management mistakes. You will be able to ensure that customers have a positive experience throughout the shopping cycle, which improves your client retention rate. On top of helping you create a loyal customer base, avoiding these mistakes will also improve your online reputation, which is critical for attracting new clients.
