Top 6 E-Commerce Challenges (and How to Overcome Them)

E-commerce challenges are bound to come up, so why bother with online selling? (Keep reading!)

For one thing, there will be challenges in any and every industry. So if you decide on a different approach to business you shouldn’t be too surprised to be confronted with obstacles.

But the other and perhaps more important reason to not give up when faced with e-commerce challenges is that the industry is still running strong. In fact, global e-commerce sales are projected to continue growing through 2023 at rates exceeding 15%. In contrast, an estimated 12,000 American brick and mortar retailers are expected to close in 2020, up from 9,300 closures in 2019.

Clearly, claiming your slice of the e-commerce pie is worth the effort, energy, and resources it’ll take to beat the difficulties that arise along the way. But what are the e-commerce challenges you should anticipate? What are the biggest challenges for an e-commerce startup? And how can you overcome them? Buckle up, here we’ll touch on all those questions and more… 

1. E-commerce inventory & management

E-commerce inventory management challenges rank high on this list since they’re so common in the online commerce industry. Don’t believe us? Consider the fact that 34% of e-commerce businesses have mistakenly sold a product that they’ve already run out of which led to late shipping (and dissatisfied customers).

For physical storefront owners, tracking inventory can be significantly easier simply because their stock can be seen right in front of them. In contrast, e-commerce business owners very often use warehouses that can be a few hours’ drive away, or even in another state, or (gasp) another country! The convenience of storing inventory in big warehouses at cheap rates is usually balanced with challenges in maintaining accurate inventory counts, managing the handling of inventory, and so on.

The solution: Choose an online inventory management system that updates the inventory status for each of your products in real-time. Having up-to-date inventory data can help you cut back on delays in your order processing & shipping times, along with the number of orders you fail to complete.

2. International e-commerce expansion

The beauty of running an e-commerce or m-commerce store – or at least part of the beauty… –  is that you can expand your business to operate in other countries with much less hassle than it would take to open a physical location overseas or across borders.

When you run a business online and you aren’t weighed down by tons of overhead costs, it’s easier to handle the steps towards selling internationally; it also allows for more time and resources to take care of the more essential aspects of your business. Of course, there are still challenges that you’ll need to plan for if you intend on expanding to other countries.

Here are some of the e-commerce challenges related to international expansion:

• Supply chain management
• Language barriers
• Delayed response times from suppliers
• Payment solutions (including merchant service providers)
• Exchange rates
• Taxes
• Other regulations
• Etc.

The solution: Conduct in-depth research into the countries where you’d like to expand into or which countries are easiest to expand into. Then, get familiar with the different rules that apply abroad and study how other e-commerce businesses have handled the challenges in those countries to understand how you can best approach your expansion efforts. 

3. E-commerce trust signals

Gaining trust from online shoppers is crucial, particularly when you come to understand how dangerous online shopping can potentially be. Most of you can probably recall a news report (or two) of a big-name business falling prey to cyber hackers. Of course, many of those attacks have left customer information vulnerable as well. Despite the risks, people have continued to shop online, albeit cautiously.

Successful e-commerce business owners recognize the valid concerns customers have over online small business cyber security. In response, they’ve taken actionable measures to help reinforce a sense of reliability and responsibility for their customers. More specifically, online sellers use signals (aptly called trust signals) that encourage e-commerce customers to trust the security of their online store.

Trust signals come in a variety of forms including:

• Having a URL starting with ‘https’ (secure website)
• Presenting customer reviews
• Highlighting time in business
• Showing trust logos (McAfee, Verisign, PayPal, BBB, etc.)

The solution: To overcome e-commerce challenges related to trustability, display trust signals in various forms and in multiple spots on your website! Data shows that customers shopping at unfamiliar sites are more likely to trust them if they see trust logos (48% of respondents), if there’s clear contact and address details (46.3%), if the site appears professional (32.2%), if the site loads quickly (23.5%), and so on.

Bonus tip: To improve your website’s load speed and overall appearance, be sure to consider the e-commerce platforms best for SEO. Operating on a platform that makes it easier to optimize your content means a better customer experience and higher conversion rates.

4. E-commerce customer service & return policies

When it comes to customer service, offline businesses have an advantage since they’re oftentimes expected to provide that service only during working hours. Yes, bigger companies will sometimes have a 24/7 customer service hotline – but your average mom and pop businesses aren’t normally expected to have a call center working round the clock.

Typically, the opposite is true of the e-commerce industry; since services are available at all hours, customers often expect to have customer service available at all hours as well. After all, if your business is able to process their purchase (i.e. accept their money), then why shouldn’t your business also be there to answer questions throughout that process?

If you’re thinking “well, I’ll just set up a chatbot to cover those hours that I’m not available for customer service”, you should think again. In a survey researching consumer preferences for customer service, approximately 70% of respondents said they prefer to speak with a human representative. On top of that, 75% of customers said they’d stop spending their money at a business if they got bad customer support or had a bad experience.

Apart from establishing clear lines of communication with customers looking for support from your business, your customer service strategy should also consider how to handle returns (yes, dreaded returns!) in an efficient manner. And it’s not just the returns that you need to pay mind to, but the other expenses of processing those returns such as restocking expenses, inventory losses, and so on.

Side note: If you’re a Shopify seller and you’ve been looking for a way to track your expenses easily, BeProfit – Profit Tracker is the Shopify calculator you need.

BeProfit is a cutting-edge Shopify profit calculator that makes it effortless to track and monitor your store’s expenses and profit margins. The app gives you a full breakdown of all of your expenses so you can spot where to make improvements to your store’s budget.

Optimize your profit with the BeProfit expense and profit margin calculator, here.

The solution: There are several ways you can reduce returns for your e-commerce business, some a bit more common sense than others.

1. Optimize images – be sure that your website shows images of products in as clear a format as possible and are labeled with detailed descriptions that specify sizes, materials used, etc.

2. Optimize your customer service – if there are questions or concerns you can address head-on, you can cut down on the number of people who are returning as a result of bad customer experience. Also, make the return process quick and painless. Complicating the return process will only serve as another reason people will avoid giving you their business.

3. Fill orders correctly the first time, every time – it should come as no surprise to you to see customers making returns if you accidentally shipped them the wrong item. Keep accuracy at the top of your priority list when filling orders – but also don’t forget about speed. If you exceed an estimated time of delivery, customers will get disgruntled and may ‘return’ the favor with a request for a refund.

5. E-commerce personalization

Of all e-commerce challenges, establishing a genuine sense of personalization for the customer definitely ranks high on the difficulty scale. Without the possibility of face-to-face interaction, you’ll have to rely on high-quality content to keep your customers feeling engaged and appreciated while shopping on your e-commerce website.

Why should you care about personalization in your e-commerce store? Because 33% of all customers who stopped shopping at a business did so because they felt there wasn’t enough personalization. Plus, personalization can lead to increases in revenue growth of up to 15% – sounds good!

All-in-all, personalization is key to long-term customer satisfaction. So how do you go about personalizing the experience for first-time customers as well as returning ones?

The solution: Welcome customers back to your online store with a customized homepage. Show customers items that may interest them, display items they’ve recently looked at, make sure that the system recognizes their location and lists prices in their native currency, refer to them by first name, and so on.

Beyond that, you can also use quick surveys to better understand what their preferences are and then use that information to present relevant items (and avoid wasting the customer’s screen space on items they don’t want).

6. E-commerce pricing

E-commerce challenges aren’t always unique to the e-commerce industry. Figuring out the best pricing strategy is a challenge that’s relevant to every business regardless of whether they operate online or offline.

For new online business owners though, it can be a real challenge to outprice established competitors (though not impossible). A business that’s been around for a while and sees you stepping in to compete will likely take action to keep you from stealing away their customers.

With that in mind, it’s important to remember that e-commerce pricing isn’t only a matter of how much your products cost, but also the additional value your business brings to the table through other services (e.g. fast shipping, great customer service, etc.). Do other businesses in your industry include those sorts of services as a standard? Do they charge extra? How much do they charge?

Do your due diligence to understand how you can best organize your e-commerce pricing strategy so as to beat the competition.

The solution: Come up with creative ways to demonstrate your business’s greater value in comparison to your competitors. For example, you can mark up the price and offer limited-time coupons that bring the price down as an incentive to drive sales. Another e-commerce pricing strategy could be to include the price of shipping and handling directly in the item cost so as to appear that the shipping is included for free.

The possibilities are endless – the important thing is that your customers feel that they’re getting more bang for their buck when they shop through your e-commerce store. If customers believe they’re getting a better deal through your online store, they’ll be more likely to give you their business.

Clearing e-commerce hurdles

With the solutions here, you’ll have an easier time meeting these top 6 e-commerce challenges head-on. It’s true that there will be other challenges that arise along the way and occasionally they can be a real drag on your business. But don’t feel defeated!

The e-commerce industry is growing every year, meaning the opportunity for you to meet success is out there. To claim your slice of the pie, you’ll need to be ready to face and overcome e-commerce obstacles as they arise. Are you ready?