There can be many reasons why Shopify stores fail, and no one single factor stands out. But of all the reasons, here are the ones that occur most often.
These are the most common reasons why Shopify stores fail.
1. Insufficient advance research, especially on costs
This can be a fatal business failure, especially in terms of planning costs and expenses. Shopify offers several different pricing levels and plans, so the first thing to do is familiarize yourself with those.
Besides direct Shopify costs, you’ll also have a number of other potential expenses to plan for:
- Product sourcing application subscription
- Invoicing app subscription
- Paid design (If you do not want to use the free designs)
- Store front-end building
- Digital marketing (Facebook Ads, Remarketing, Email marketing, Cart abandonment, Adroll, Adwords, or Social Media Influencer)
- SEO (if done by a third party or app)
- Monthly or annual fee for the supplier
- Costs of the products
- Shipping costs
- Product listing syndication service (if selling through omni channels)
- Costs of a fulfillment center or courier service (if necessary)
- Employees (If you are a big store)
- VAs (if necessary)
2. Using a sloppy management approach
Another major reason shy Shopify stores fail is to sloppy management of your cash flows, not having a sales, marketing or customer service strategy nailed down before you start, and failing to do needed due diligence to vet dropshippers, suppliers, and the various vendors of the software apps you’ll be using.
Also, it can include getting disheartened when things don’t work, rather than resolving to try a different approach. Discipline is key.
3. Not having a merchandising plan
Not having a plan for how you will display, stock, set prices, ship and back up orders for the merchandise you sell is one of the fastest roads to ruin in the Shopify universe. In order to make sure you cover all bases, think through the whole purchase process from the perspective of filling the needs of the customer from initial product search, to receipt of shipment.
- What do you want to sell?
- What will they see first in your storefront?
- How will they see the products?
- How will they be able to buy it?
- What will be your payment gateway?
- What happens when they complete a purchase?
- How will you keep your stock up-to-date?
- How will you fulfill the orders?
- What if they want to contact you?
- What if they want a warranty?
4. Not having a marketing plan
You need to establish your sales goals, and identify the techniques you’ll be using to both acquire and retain customers.
- How will they find you? Will you be using paid search ads, organic SEO, or both?
- How will you build your email list, and where will it live?
- How will you differentiate your store from competitors? Does your main message appear on your home page?
- What if they abandon their cart or leave without buying anything? Will you offer a sweetener for them to stay and place an order? Use retargeting ads?
- How will you display your store’s brand?
- What email automation app will you use to communicate specials to exising customers?
5. Using suppliers from the other side of the world
Always look for trustworthy suppliers who are at least located on the same continent as your target market. Having to wait for an ordered product to cross an ocean almost always means a month-long wait before it reaches the customer. The closer the supplier is to your markets, the better. By choosing a relatively close — and reliable — supplier, you’ll avoid the complaints, loss of revenue from demanded refunds, and negative reviews for your store.
Many Shopify store operators choose the ease and convenience of using AliBaba or Oberlo dropshipping services, but you pay for that convenience. You can also look for dropshippers on your own to find the best sources.
6. Selling the wrong products — i.e., ones that don’t fly off the shelves
Obviously, you want to be selling what’s popular at any given time, or else perennial favorites that never go out of style. The success to finding winning products to market is to know what’s already selling online based on real-time data.
Instead of using “best guesses,” you can pay a visit to Trending Products. This tool analyses billions of datapoints each day and uses these signals, together with ad data, to detect the most popular products based on current trends. Trending Products give you a behind-the-scenes look at the best selling products of your competitors, in real time, so you can highlight those best sellers in your own store.
I recommend choosing products with personal interest to you. You’ll have a better understanding of the market, and be able to write compelling product and ad copy. If you’re a rock climbing enthusiast, sell climbing gear so you can describe what’s superior about it, based on your own experience. After all, Shopify’s motto is “Turn your passion into a business.”
7. Failing to optimize the user experience
If you don’t constantly analyze what improvements can be made across the store, such as better checkout flow and user experience, you could be losing a lot of sales you’d otherwise have captured.
Keep a close eye on your cart abandonment rates. The typical online store has an average rate of about 68%. A fully optimized checkout process has an abandonment rate of around 20%. You can optimize conversion rates through strategies like persuasive copywriting, credibility-based web design, and value propositions such as an offer to donate or commit to a cause.
The biggest obstacle to conversions? A MasterCard and University of Oxford study in 2017 showed about a third of cart abandonments occurred because the shopper could not remember a password. This is one of the biggest drivers of marketplaces like Google Express and Amazon, which store the user ID and payment information for all stores selling in that marketplace.
A successful store will make sure your customer is happy by dealing quickly and effectively with customer queries. If you’re looking to grow business quickly, try building customer service templates to use as guidelines so you can more easily outsource this task in the future.
Remember the 10/90 rule.
It’s an old saw, but business success with an online store is 10% inspiration, and 90% perspiration.
One thing to know is that it’s not just Shopify businesses that fail. Many entrepreneurs fail their first time, sometimes their second time, or even their third time. Eight out of ten businesses fail in the first two years, and only 3% last longer than five years. You have to be prepared to take on every task, work long hours and sweat every detail.
One thing you can do, as far as those details go in your Shopify business, is to make sure you’ve got a good product listing syndication and fulfillment service when you’re ready to sell through multiple channels.
Shopping Feed syndicates product listings on all of the world’s most powerful marketplaces, syncs and refines inventory data with >11M product tags, and automates order fulfillment. Contact us for more info: firstname.lastname@example.org (920) 333 3488