7 challenges of starting an eCommerce business

8 minute read
7 challenges of starting an eCommerce business

The pursuit of financial freedom is common these days. According to the Social Shepherd, up to 24 million online stores continue to grow. 

Things have been going well in the eCommerce industry for a while, and the recent pandemic encouraged even more people to switch to online shopping. 

There are different types of online businesses, ranging from podcasts and YouTube channels to blogging and affiliate marketing. However, an eCommerce business appeals to aspiring entrepreneurs because they see the future in it. 

The study by Oberlo indicates that more than 2 billion people worldwide shop online. Finally, Nasdaq predicted that by 2040, roughly 95 percent of all goods and services will be ordered on the Internet.

Digital world projections are bright, and eCommerce is bound to play a prominent role.

Having said that, creating and maintaining an eCommerce venture from scratch is challenging, particularly when you have limited resources and experience. 

Challenges that detract your progress will halt your business development, but if you know what to expect, coming up with solutions should be easy. The following are seven eCommerce challenges you may experience starting an eCommerce business and how to overcome them.

Coming up with an idea

Let’s start with a business idea. That can be the biggest eCommerce challenge in many ways. The odds are that even if you think of a unique proposition, there are probably multiple brands out there that have already filled the niche with their goods or services.

Being a newcomer, you probably need more resources at your disposal. Approaching the problem with an exciting twist is one of the methods, as is picking an already existing market and branching out to a particular niche.

For instance, if you consider a custom merchandise business, competing against others with general designs will get you nowhere.

Instead, you could try a demographic like cat owners. More specifically, owners of orange tabbies. Many people love cats, but eliminating the generic market by narrowing the idea down increases your chances of success. 

Or, if you select the drone niche, why not narrow it down to specific drone accessories for competitive drone racing?

Ideally, your business idea should be popular enough to attract customers and realistic regarding how much you can compete with others. 

Picking between wholesale and dropshipping

You will need to choose between wholesale and dropshipping. The former gives you complete control over the operation, whereas dropshipping lets you outsource the goods from third-party suppliers.

Between wholesale and dropshipping, dropshipping is less risky for new businesses.

Consider the following if you are uncertain:


Dropshipping is a newbie-friendly approach since it comes with lower startup costs. Adding new products and focusing on building the business is easier because you do not have to worry about logistics as much.

On the other hand, dropshipping drawbacks include lower profits because you get a minor cut for each sale. In addition, there needs to be more transparency and struggles to customize products because everything is in the hands of a supplier for the most part.


Wholesale lets you control everything, so it is easier to accommodate the business to customer requests. Also, if you order many goods, you can expect generous discounts from wholesalers.

The downside is that you must worry about warehouse and other logistic issues. If you, for example, get too many goods and need help to sell them, the warehousing fees will accumulate, leaving you with a big headache. That’s why engaging consultants to optimize operations and minimize warehouse and logistics expenses becomes a strategic move.

Which is better?

Between the two, dropshipping is less risky. Despite its disadvantages, it involves fewer problems for newcomers, so dropshipping is recommended.

Attracting the right customer

Online shoppers have many options, and it is up to the business to find the means to attract customers. Not just that. They also need to find leads they can convert. 

Chasing an ideal customer can be an eCommerce challenge. Many brands invest in marketing, trying as many different channels as possible, only to come out empty-handed. 

A lot depends on your niche. For some, it is easy because they can access multiple social media groups with the right demographic. Or, they worked out how to reach out to micro-influencers and partner with them. 

Unfortunately, the same does not apply to every business idea. If the challenge of getting new customers is too tricky to overcome, consider seeking help from a marketing experts

Working with a marketing partner also means you must dedicate more resources and be smart about your marketing budget. If you go with this option, thoroughly research the available agencies and pick one that offers value.

Dealing with cybersecurity woes

Cybersecurity woes are also a significant obstacle to overcome. New eCommerce store owners sometimes need to pay more attention to this step because they believe new websites are unlikely to become a target.

A poor cybersecurity strategy can tank your new eCommerce business. It’s one of seven eCommerce challenges you face.

The reality is that hackers are open when choosing their targets. They create algorithms to look for relevant targets and send massive attacks.

A poor cybersecurity strategy could be the primary reason for your business failure. 

It is one thing when you delete a file accidentally or clear frequently visited sites manually, and another when the information gets deleted by malware.

However, it is an entirely different issue when malicious code corrupts or eliminates the data on your website. Restoring everything without a proper backup would require a lot of work.  

And the attacks go beyond affecting you personally. Exposing customer data, for instance, damages your reputation, and coming back from that could prove impossible. 

As an eCommerce store owner, you must be vigilant and ensure that your website is backed up and updated. Moreover, installing at least a couple of security plugins is imperative to reduce the risks.

Returning and refunding items

Returns and refunds are an inevitable part of running an online store. The inability to try the goods in person is arguably the biggest drawback of shopping online.

If you go to a retail store, you can wear clothes to determine their fit. Meanwhile, shopping online eliminates such an opportunity. There are advancements in virtual reality and its implementation in eCommerce to offer consumers a chance to try products “in person,” but that is still too early. 

For starters, ensure your store has a clear return and refund policy. It is a red flag, making shoppers second-guess about the legitness of the store. 

The first time you receive a refund request, expect to feel demotivated. However, remember that it is part of the business. Instead, you should focus on improving the customer experience, including a flexible return and refund policy to disperse shoppers’ doubts.

Establishing reliable customer support

Speaking of customer experience, a reliable customer service department is another crucial element of the overall business success.

Finding people you can trust to do a good job is an eCommerce challenge, for sure. Moreover, since an online store operates 24/7, it must cover different time zones. Depending on the queries, you might hire more reps than expected, so that the costs will increase.

More and more businesses are replacing people with chatbots. Artificial intelligence cannot replace real humans altogether, but they are improving and will likely be the go-to option in the future. Therefore, investing in chatbot technology to fix potential customer support holes is a consideration.

Scaling the venture

The last eCommerce challenge is scaling the venture. You might be satisfied with the income early on, but keeping up with the competition and trying to get ahead of them will require heavier investments in marketing efforts. 

working-at-desk-with laptops-and-paper
Scaling your eCommerce business often comes down to available resources.

Scaling is also related to customer expectations. Modern consumers expect to find the latest features in their shopping store. 

Take mobile shopping, for example. Mobile commerce in the United States alone is expected to grow to $710 billion annually by 2025. Not only is it necessary to optimize the website for mobile devices, but developing a mobile app for iOS and Android is also on the agenda down the line.

Scaling comes down to how much resources you can dedicate to it. Often, you can invite investor interest in your business based on how credible you are. To make yourself more professional and legitimate, create an LLC entity or other type of business entity with the help of the right agency or professional. Once you secure funding, reserve some of it for investments that will help you grow in the future.

In conclusion

To sum everything up, the challenges of starting an eCommerce business presented in this article should give you a general idea of what to expect.

Even if you are a complete greenhorn without prior knowledge of eCommerce, you should still pursue the dream.

Plenty of people started from scratch and managed to build a profitable venture because they put a lot of effort into everything.

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