7 Common Ways Ecommerce Businesses Lose Money

Want to run a successful ecommerce business? Make sure to avoid these money-draining mistakes and disasters. From ineffective marketing to cyberattacks, here are some of the things that commonly cause ecommerce businesses to lose money.

Ineffective marketing

Marketing that doesn’t attract any extra business is a waste of money. Not all your marketing is going to be effective, but at least some of your marketing efforts should be winning over new customers. If you’re not getting any business from your marketing, consider whether it’s time to pay for some marketing advice. This could help you to identify ways of improving your strategies. Doing marketing research such as looking at analytics and looking at what competitors are doing can also help.

Slow-loading website

A slow-loading website could be causing you to lose business. Not only do many visitors leave a website if it doesn’t load within 5 seconds, but this bounce rate then affects your search rankings, resulting in less people discovering your through search engines. There are many things you can do to boost the loading speed of your site such as reducing redirects, limiting plug-ins and activating lazy load images. This guide to improving website speed offers more tips.

Unprofitable discounts

Discounts can be a great way to generate more online sales - but you need to be careful of pricing products too low on a regular basis. You could end up selling products at a loss and your business could quickly sink into debt. When discounting products, make sure that you are still making a return. This guide offers some tips on how to offer discounts without losing profit.

Slow shipping

These days, many consumers expect products they order online to arrive within a few days. If items are taking weeks to reach customers, you could start to experience refunds and chargebacks - especially if you promised an earlier delivery deadline. Many customers may even refuse to order your product if the estimated delivery date is too far in the future. Consider working with a reliably fast courier. Don’t be worried if this costs your customers more - many customers are willing to pay extra for fast shipping.

Damage during delivery

You can also expect refund requests if products get damaged during delivery. This could quickly cause you to lose money. Damage to products during transit can be caused by either not selecting a reputable courier or improper packaging. Make sure that you’re using adequate void fill to cushion loose products.

Fraud

Fraud such as identity fraud and chargeback fraud can cause you to lose money. Unfortunately, ecommerce businesses are common targets for such fraud. Requiring signature upon delivery and using third-party fraud protection services are just two ways in which you can reduce ecommerce fraud.

Cyberattacks

Ecommerce businesses can also lose money as a result of cyberattacks. Implementing robust cybersecurity measures can help to prevent you from being targeted by ransomware or having your website hacked. Cybersecurity consultants can help you to introduce measures to protect your company from these threats.