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Top 10 eCommerce Startup Mistakes

by Justin Palmer - December 17th, 2008

If you have any experience working in eCommerce, I’m going to bet you can list 10 mistakes you’ve made, or have seen others make while running their online store. Or maybe you’re currently setting up shop online, and need some advice on what pitfalls to avoid.

Below are 10 eCommerce startup mistakes I’ve encountered while working with online businesses. Specifically, many of these blunders are made by companies who are taking a traditional business online for the first time.

#1 – Blowing the budget on web development and neglecting marketing:

In the brick and mortar world, you get free traffic just by setting up shop on the street corner. The same does not apply for eCommerce. The “if you build it, they will come” mentality still exists in the minds of zealous, first time internet entrepreneurs. If you want a successful website, plan on spending as much on marketing and optimization in the first year as you pay for developing the site.

#2 – Getting Stuck in Endless Cycles of Design Revisions:

In traditional marketing or store operations, you have to get it right the first time, because it’s too expensive to redo your store signage a week after you open. However, the tools available to you online allow you to easily evolve and optimize your website overtime. As General George Patton once said, “A good plan today is better than a perfect plan tomorrow.” The same applies to websites. Don’t expect a perfect website on day one. Rather than focusing on perfection, make a commitment to optimization after the website launches.

#3 – Forgetting people can’t touch your products:

This point may seem painfully obvious, but its often overlooked because companies know their products a little too well. It’s amazing how many eCommerce sites neglect appropriate zoom-in photos, contextual photos, and product descriptions. Take a look at the top performing websites in your niche, and pay close attention to how they describe and picture their products.

#4 – Not realizing website visitors aren’t as committed as store visitors

It’s easy for business owners to imagine a website visitor in the same way they perceive an in-store visitor. This is a serious mistake. While it’s not uncommon for retail stores to experience conversion rates of over 50% (half of the people who enter the store buy). a 3% conversion rate for website, would be considered acceptable. Why this disparity? It all comes down to commitment. The amount of commitment required to get in the car and drive yourself  to a retail store is much greater than the commitment from a casual surfer who clicks on your website from Google. In the physical world, your competitor is 10 minutes away. Online, they’re a few clicks away.

What does this mean? It means that any obstacle, large or small, that gets in the way of buying process will cause lost sales. It also means that you must add value to the customer experience, especially if you sell the same products as your competitors.

#5 – Using Print media for online media:

You know that killer flyer you made for your big sale event? Odds are it makes a terrible email blast. What about the retail catalog you invested so much on? It too, is likely very ineffective as an online version. Print and online media may be similar in some ways, but there are more differences than similarities. When choosing a designer for your website or online marketing projects, make sure they have significant experience with online creative, not just print media.

#6 – Ignoring Online Trust Issues:

In the face to face real world security, and privacy are rarely top concerns for customers. eCommerce, however, is inherently “taxed” with a low-trust environment, causing visitors to doubt the legitimacy of your site. You must go the extra mile to assuage these perfectly rational fears. This includes assuring customers of their information is secure, and that you value their privacy.

#7 – Having a “Home Page equals the Website” mentality:

In countless situations, I have seen companies place too much emphasis on the homepage, particularly the graphics, and woefully neglect other critical pages such as the product or category pages. A recent company I work with was surprised to learn that total pageviews of their homepage represented less than 4% of overall pageviews on their website. Yes, the homepage is important, but don’t go overboard and ignore other essentials.

#8 -Chasing After Every Internet Fad

Don’t go chasing after the latest and greatest internet marketing tactic or ecommerce feature. Yes, there are many exciting new tools and marketing tactics out there, but focus on the sure-fire methods first, such as search marketing, email marketing, and website usability. There’s much to be said about innovation and trying new things, but take every opportunity with a grain of salt, considering the opportunity cost.

#9 – Not Understanding or Caring about Web Analytics:

You can read a balance sheet, now make a commitment to understanding basic website analytics. In a physical store, the idea of analyzing customer activity is far fetched and impractical. For this reason, business owners often never realize the potential of not just monitoring but acting upon web analytics data. It’s vital that someone in the organization can understand and interpret web analytics.

#10 – Failing to Integrate your In-Store & Online Channels Early on:

Many large click-and-mortar retailers are still struggling to seamlessly integrate their in-store and online channels. Channel conflict, price discrepancies, and a siloing mentality are common, causing brand confusion for your customers. Many store managers believe promoting an eCommerce website will steal store sales. Make sure to educate your store staffers early on, highlighting the many synergies of online and in-store retailing.

I’ve listed 10 “don’t s”, now what about what you should do? If you had one tip to give an ecommerce startup business, what would it be?

About Justin Palmer

Justin Palmer is the owner of Palmer Web Marketing, a strategic web marketing consulting firm. Justin also runs MedSaverCard.com, a Medicine Discount Card offering up to 80% off prescriptions for drugs not covered by insurance.


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11 Responses to “Top 10 eCommerce Startup Mistakes” by Justin Palmer

  1. Bloggers Digest 12/19/08 | Get Elastic Says:

    [...] start our list off with Justin Palmer’s 10 ecommerce startup mistakes retailers [...]

  2. antuan Says:

    If you ever wondered what things make an ecommerce successful, I can tell you that trust is probably one of the most important. Even if your products are the best ones in the market nobody will give them a try if they don’t feel confident with your business.

    Add your ecommerce to Trust-index and let people from all over the world rate it and share their good experiences with others. Start building your confidence now, it will pay off tomorrow!

  3. Ed Kohler Says:

    Great list. I see too many businesses focusing on strategy while forgetting about execution. It’s a process.

  4. Mihai Dicu Says:

    Hi,

    this is a very good list of mistakes I really appreciate it.

    Besides this there is also another common problem that some online starters ( like myself :) ) tend to overlook: the no of products you offer for sale! When going online people, besides other reasons, people usually do it because they hope to find a very large number of products they can choose from.

    Normally you should have a lot more products in an online store than in physical store !!

    Thx.

  5. Pinny Cohen Says:

    #2 is a huge mistake…as a designer I’m on the bad end of it! :-D

  6. 10 häufige Fehler von E-Commerce Startups » shopbetreiber-blog.de Says:

    [...] Wir danken Justin Palmer für die freundliche Genehmigung der Übersetzung. Den Beitrag auf dem dieser Artikel basiert, finden sie hier. [...]

  7. Day Two Webdesign Says:

    Hi Justin, nice post! You ask for DO – advice for eCommerce startups:
    the no.1 thing I advise to do: use whitehat seo techniques, and where to start? Well, how about Google’s Matt Cutts blog.
    In essence:
    1) hook up to Google Keyword Suggestions to gain a good idea for what keywords to focus on.
    2) then make sure your page titles, meta descriptions, body content etc. of your eCommerce site is in accordance to the results of step 1.
    3) put relevant content on your website: the more appealing, the better chances you have for other people to value your site.
    4) Keep up the good work, and succes is nearby!

    The same applies to you Justin: keep up the good work, I really like your blog! Cheers!

  8. Die häufigsten Fehler von E-Commerce-Startups | NewMarketing Blog Says:

    [...] von E-Commerce-Startups zusammen. Der ausführliche Artikel des Web-Experten Justin Palmer ist bei Palmer Webmarketing zu finden (17.12.2008). 1. Hohes Budget für Web-Entwicklung, aber das Marketing vernachlässigen [...]

  9. Lilach Says:

    As we open our new business online I find your list very useful. Especially number #1 on your list. We often forget and do not budget the marketing aspect of a new business.

  10. Nathan Ketsdever Says:

    Assuming that checkout is FAR, FAR smoother than it is. (for instance look at Orecks checkout–its not surprising they lose visitors and shoppers)

  11. Alice Says:

    This may be a odd suggesting but start moving away from clicks and catalogs. Ecommerce has not changed its time it did. This is what I found http://atdc.org/2009/12/aitendent-launches.html.


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