Search for:

Almost 90% of e-commerce stores fail in the first 120 days.

According to Chris Ducker’s blog, 90% of e-commerce ventures fail.  That alone is scary enough to prevent enthusiastic entrepreneurs from taking a plunge.  That said, it isn’t enough reason to give up on your dreams… as long as you follow these five steps like Commandments.

1. #Tech: Don’t create everything from scratch.

A lot of entrepreneurs are in love with the idea of owning a website, and think of their e-commerce store as a way to make it happen.  However, it is important to keep in mind that if the products you sell don’t have demand, it does not matter how great your website looks.  If the product you’re selling is your core USP and it is a reasonably mass-market product, then explore listing it on marketplaces like Amazon, eBay, or Rakuten instead.  They have a significantly high volume of traffic and can help you get initial traction for your product.

If you do decide to launch your own site, don’t spend a lot of money and effort in creating an e-commerce website from scratch when you’re still trying to find your niche.  Go with a quick and dirty Shopify or Magento store and pick out a cool theme you like (suggestion: go for a premium theme under $100, you still want your store to have a semblance of professionalism).

2. Get #analytics right

When you have your own store, you have great control over the customer journey.  You can also collect an immense amount of data on how customers behave on your website.  Gathering the right data and analysing the right metrics are key to ensuring you are not throwing money into the wind in bad marketing campaigns and discounts.

At the very least, start with Google analytics and set up e-commerce tracking.  Once you hit decent daily visits (say: upwards of 1,000 visitors/day), you should invest in more specialist tools like Metrilo (on Web) or Clevertap (on both Web and app).

3. Hold off on the #discounting

Discounting online is a popular go-to strategy for companies plush with venture capital money, but it is not a sustainable strategy.  Check out what the guys at YourStory have found.  Unless you have hand-me-downs from a rich millionaire father, stay off it.  In the initial days, focus on finding the right product-market fit–when you discount like crazy, you will never know if your customers are buying because they like your product or because you are selling it cheap.

If you do have to discount–say, because you have more stock than you care to hold–set up a cadence of sales and familiarise your audience with it.  For instance, if you consistently run a sale on every Tuesday, very soon your regular customers will come in on Tuesdays to check out what’s on sale. That helps prevent a double whammy of selling inventory at low margins and spending more on marketing to get people to the website and convert.

4. Be ruthless with your product lines

If you run a multi-product store, not all products will be high performers.  Be ruthless with cutting products that don’t meet your bar.  You can think of such product in different ways:

  • Products that have a low conversion rate given their selling price–this could mean that there are enough alternatives out there, or your product quality is simply not good enough.
  • Products that have a long speed of sale in comparison to similar products. If a product in the same price and consumer-need bracket takes much longer than others to sell out, then you have a problem.
  • Products with high cost-income ratio. If you need to spend more on marketing than the sale proceeds for certain products/product lines, then it is wiser to drop the price or change the positioning.  Be prudent with using this metrics because certain products (especially, new-to-market products) have a slower adoption rate and may need greater marketing push to show traction.

Speed of sale is the time taken to sell each unit of a specific SKU, measured from the time the product becomes available for sale.

5. Be prudent with #staffing and #inventory

So you have an online store now, you suddenly see a spike in sales, and make your plans to hire more people and order in more inventory.  But first, hold up.

Many good companies have been sunk by spending more than they should have. If you are not selling custom-designed products, then consider dropshipping. Shopify has a great guide on dropshipping here.  If you have to hire people, first take on temporary staff.  If the spike in sales last long enough for you to get comfortable, then hire permanent staff.

Most of the points above are commonsensical, but it is very easy to lose sight of them when you are diving headlong into running your new webstore.  What other points do you consider when running your store? Let us know in the comments below.


Product and Marketing guy. Ex-founder of $10m re-commerce company, with extensive experience in B2B and B2C product design, revenue management, and sleepless nights.

Write A Comment

Hey You!

Submit your email here to receive more such tips and tools on your inbox. Plus, if you're a Product Manager, there's a cool freebie for you.

Thank you

Check your email in 15 mins to download

your free PDF.