8 Common Mistakes by Ecommerce Merchants

In my posts I try to present positive, practical advice on how ecommerce companies can improve. With this guide, however, I will explore common mistakes that ecommerce merchants make that damage their companies. I learned some of them the hard way in my own firm. Others are ones who merchants tell me if their earnings or profits are decreasing and they want help.

1. Growing Focused on a Few Sources of Traffic

While many merchants learned in 2012 and this year, Google changes its calculations frequently. If you rely on organic referrals from Google, your earnings can tank within a moment. Beyond Google, being overly reliant on any traffic source is a mistake. It’s ideal to balance traffic from organic search, pay-per-click, social networking, affiliates, partner websites, blogs, other advertisements, email promotions, and direct traffic.

Continually look for new referral sources. Many merchants feel PPC advertisements are prohibitively expensive. But competitive campaigns which offset declining revenues are a enormous advantage even if these campaigns produce lower margins.

2. Getting Started with Current Products

Consumer tastes vary consistently. Competitors introduce products. Price competition becomes fierce. Suppliers stop products or run out of stock. Shoppers simply prefer to see new items.

Change it up. You may maintain best sellers, but keep trying out new products. Experiment with new merchandise categories. Expand your selections. Promote them differently. Whatever you do, keep an original pipeline of products ready to improve your store. Adding new products and selling them to existing customers is one of the simplest ways to increase your revenue stream.

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3. Letting your Online Store Get Stale

It is a challenge for many smaller ecommerce merchants to refresh content, feature new products, create promotions, re-arrange end caps, etc. It is important to maintain your online shop fresh — at least each season. Ideally, you’re introducing new products on your home and category pages each week. That is a stretch for many merchants. But try to change your home page and a couple of promotions and categories regularly.

Make sure old promotions are eliminated. If a product is out of stock forever, pull it in the shop. Check your links regularly and eliminate ones that are broken. Ensure that your site-search results are coming live products.

4. Failure to Monitor Performance

This is a massive point of failure. It’s vital that you track your key performance indicators every day. I addressed KPIs earlier in the year, at “21 Key Performance Indicators for Ecommerce Businesses.”

At a minimum, track daily your store visitors, new customers, referral resources, cart abandonment, checkout abandonment, earnings, new customers, average order size, and other important metrics. Assess your pay-per-click advertising performance at least weekly. Review your advertisements in-depth to be sure you aren’t wasting money.

If you outsource tasks like PPC advertising, ensure that you track your provider’s performance. Agencies don’t have the same incentive to deliver outcomes that you do. They sometimes spend cash on consumable advertisements, campaigns, and key words.

5. Assuming you Understand What Your Customers Want

It’s easy to fall into the trap of assuming you know your clients so well that you really don’t need their input. This is particularly true with product choice and the design of your online shop. It’s particularly dangerous to make design changes just because you or your designer favors it.

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Ask your clients what they think. For the look of your site, conduct A/B tests when you have sufficient traffic. Get customer feedback with polls, by offering online chat, informally polling clients, or speaking with customers who call in about what they want to see you do better. You may ask questions about all aspects of your company: merchandise, customer service, your store, or your own pricing. Ask and you might be amazed at what you learn.

6. Relying on Promotions to Drive Revenue

As competition heats up or revenues begin to decline, merchants often resort to promotions to keep earnings. It’s a excellent short-term tactic. But, it is not a long-term plan.

You require a user experience that’s not reliant on discounts or free shipping. You do it by selling compelling products, and offering rich content, superior customer services, and a strong perceived worth. Building a good brand with a shop that is easy to navigate and fun to shop is also significant.

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7. Ignoring Mobile Devices

There are probably smaller merchants that think mobile shopping isn’t going to influence them. They’re dead wrong. Consumers like to shop on tablets and read email and study on smartphones. They love mobile apps due to their simplicity and ease of use. The transition to mobile has started. If you don’t provide a mobile-friendly experience, your earnings will decline.

For many merchants, this may mean finding a vendor to help build or host a mobile shop. For others, it could be a redesign of your current shop to a responsive design. (For a primer, read “Getting Started with Responsive Web Design.” ) Changing platforms might be the best alternative for shops with older, smaller shopping carts. When you haven’t researched your choices, do it today.

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8. Ignoring your Competition

Ecommerce companies are increasingly using automated software to track prices against competitors. That is overkill for many merchants. However, it’s important to understand your opponents, their product and pricing plans, and to monitor them frequently.

Competitors are a fantastic resource for new product ideas, products which aren’t selling — see the clearance pages — and also to gauge appropriate pricing levels. Failing to watch competitors may leave you selling a product at a hefty premium while they are aggressively promoting it at a lower price.

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