With the likes of Amazon and Alibaba dominating the market and the eCommerce industry expanding at a rapid pace, growing an eCommerce business is no easy feat. Here, we’ve outlined some of the key challenges you can expect to face when establishing your eCommerce brand, and what you can do to overcome them.
1. Having the wrong product mix
Choosing the right product mix is critical to long-term success, but in a highly competitive market it’s virtually impossible to have a completely exclusive offering unless you manufacture and sell products direct to the consumer.
It’s common for businesses to invest in a product range that they think customers will want but that doesn’t actually align with their target buyers’ needs or preferences. Likewise, many businesses put their faith in certain products only to find out that the same or very similar products are available elsewhere cheaper.
If you find yourself with products that aren’t selling, rest assured that the majority of businesses go through a period of trial and error before settling on a product range that’s right for their customers. To mitigate the risk of costly missteps, however, make sure to:
Do a thorough market and competitor analysis so you know what products are already out there before making an investment
Define your target customer’s needs and preferences so you can accurately evaluate if a product serves the right purpose
Consider how you can differentiate your product mix from competitors to offer a product that’s better value, better quality, or more innovative
2. Not understanding your customers
In a perfect world, your customer base would be a distinct group of people who share the same behaviors, preferences, and interests. While that’s sometimes the case, in reality most customers will readily switch from brand to brand as their needs change, as your offering changes, and as competitors’ offerings change. This can make forming a reliable picture of your customer base a challenge.
Reporting and analytics offered by tools such as your CRM software, inventory management software or eCommerce platform are invaluable for tracking your customers’ behaviors, demographics and actions on an ongoing basis. Analyze this data regularly to make sure you’re up to date with your current customer mix at any given time, so you can continue to tailor your offering to suit the right people.
3. The inability to handle multiple sales channels and currencies
Expanding your eCommerce business to multiple sales channels or territories can spell an operational nightmare if you don’t have the right set-up in place to manage all your stock and orders from the one place.
Before you make any major business decision regarding multichannel selling or expanding globally, it’s imperative to ensure you have the right workflows in place. An integrated cloud order management system like TradeGecko acts a Single Source of Truth (SSOT) for all your data, which is critical as your business expands to include more working parts. Streamlined operations enable a better customer experience and increased customer satisfaction, and also provide a solid platform for growth.
4. Out-of-stock and overstock problems
The largely hidden cost associated with out-of-stock, overstock, returns, and order issues is called the ghost economy, and it’s estimated to cost businesses $1.75 trillion annually. Not only are overstocks and out-of-stock problems costly for growing businesses, but they also provide a poor customer experience and contribute to a negative brand reputation.
Utilizing a robust inventory management system helps ensure your stock levels are accurate and gives you the tools to forecast demand so you can plan for the future. With the right set-up, you can be confident that even with many working parts to consider, your inventory levels will always be up-to-date without you have to input any manual data –mitigating the risk of overstocks and out-of-stock problems.