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ECommerce Startups Failure: What Exactly Is The Reason?

In the world of new businesses mushrooming every day, eCommerce business is easy to start but hard to survive. This can be seen from research by Failory which says if 15 startups fail due to competition, only one out of them is active in the eCommerce industry. This means that eCommerce startups’ failure is not because of competition but it’s something else.

You must be wondering that in the eCommerce industry which witnesses global retail sales of the amount of 3.53 trillion US dollars, what could be the reason behind the failure of businesses?

Undoubtedly, there is a cutthroat competition among e-stores. eCommerce is a vast industry where products and services of almost every niche have to face stiff competition. The competition is quite healthy here. It strives businesses to serve the customers with the best.

It never results in their failure.


The vast market demand is enough to get attracted by producers in the eCommerce industry. The only thing which the eCommerce businesses need to focus on is to provide the optimum solution with the help of dexterous web app developers to cater to this huge demand perfectly.

According to a prediction, in 2020, the number of digital buyers is expected to be 2.05 billion. These billions of shoppers will never let you stay without buyers if you have the right thing to offer. Hence, failure in the e-commerce industry is a combined result of multiple factors that are independent of other eCommerce businesses in your niche.


This blog is an attempt to highlight these reasons. The world has seen many hardworking eCommerce entrepreneurs getting failed. Many of them could never decipher their mistakes. We hope you do not be one of them.

After observing them closely along with some facts and statistics, here’s what we’ve shortlisted—the top reasons for the failure of eCommerce startups.

In this blog, you will also find the solutions and tips to make your eCommerce store a bigtime success. Mighty companies like Flipkart, Amazon, eBay, Alibaba, Walmart, and so on faced these struggles too. It all depends upon who changes the challenges into opportunities.

Read these reasons to find a solution to the hurdles that come in the way of your eCommerce development project’s success.

Table of Contents

13 Major Reasons Behind The Ecommerce Startup Failures:


1.) Poor Content:

Bounce rates are high in every industry and the primary reason behind this is poor content. Content includes the pictures, descriptions, and videos of your products. Problems with content will never be there in big companies’ websites like Amazon.

Silly grammar mistakes or blurred images will devalue your website. This means that you will need to focus on every detail to achieve a supreme level of perfection and client retention.

2.) Checkout Process Is Tough:

Nobody likes to fill forms of two-three pages to buy a product. A buyer comes to the checkout page after making a purchase decision. The execution stage here requires a seamless process.

Therefore, the checkout process should be as simple as it can be. One page checkout is the most prevailing feature of eCommerce websites these days. Many platforms are providing extensions for this option.

You can also read this article to learn how to increase conversions on your eCommerce website.

One such platform is Magento. You can hire Magento developers to use the one-step checkout extension to provide your customers with easy execution of the decision of purchasing a product.

3.) Focusing On The Front End:

While designing an e-commerce website, businesses keep on focusing on front-end development so much that they forget that backend development is the one that will provide strength to their website.

Outer aesthetic features are important, but they cannot manage the scalability, reliability, and strength of the website. This can only be provided by the right choice of tech-stack for server-side programming.

For eCommerce websites, NodeJS is a popular choice these days. NodeJS developers with the help of NodeJS codes provide scalable, robust, and high-performing eCommerce websites. For detailed research about eCommerce platforms you can click here.

4.) Many Hidden Costs:

What if you buy a dress from an eCommerce store that you like a lot and then see the same dress at a lesser price on some other website?

After analyzing the costing, we found that the beautiful packaging cost is included in the price of the pricing of many websites. The hidden cost can never be kept hidden in a world where customers have become well-aware. Hence, never think of cheating your customers in terms of cost.

5.) Not Responsive UI:

There are over 3.7 billion mobile users in the world. Most people browse shopping websites on their mobile phones. This creates the need to get a responsive eCommerce website developed. Creating an interactive UI for your app is necessary in order to gain customer engagement. Here is a detailed writeup on how to build a successful eCommerce mobile app.

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6.) Thorough Testing Of Products:

Selling the poor quality of products can bring a bad reputation to your brand. To avoid such situations, make sure to get your products to go through a strict quality check process.

The requirement of optimum quality is an essential aspect in an online store just like that in the offline stores. Make sure to provide the best quality products to your clients. You can even take the idea from Flipkart’s assured products. They state clearly which product is worth buying.

7.) Choosing A Generic Niche:

Choosing the right products to sell is also very crucial. What will it help you to sell the same products as others and at the same price? Select something that is different from the generic line of products and services.

For instance, you can sell only gifts or only shoes. Dealing in a genre will help you improve your services as well as help you gain customer loyalty.

8.) High Shipping Cost:

64% of people choose to browse their required products from Amazon because of free shipping.

This can be understood that there are budget restraints that do not allow you to provide free delivery on every product.

For this, you need to plan your costing appropriately. A well-planned pricing policy can save your business from losing many of its essential customers.

9.) Low Rank In Organic Searches:

Most people start browsing for a product on Amazon. You might not be able to beat this biggest eCommerce company any time soon. But what you need to do is to focus on people searching through Google. You can read more about SEO tools here.

According to research, 35% search through Google for purchasing something. For this, you need to bring your website at the top of organic searches. This can be done through search engine optimization for which you need to be an SEO expert. A little bit of hard work and patience is required.

Also, you can hire software developers who are well versed with SEO and provide an eCommerce site after optimizing it with optimum programming tools.

10.) Going With The Cliche:

Without adding China, there are 2–3 million eCommerce companies in the world. In the vast number of enterprises. You need to become extraordinary to survive. Surviving with generic properties is tough.

For this, first find your unique point then highlight it through marketing campaigns. If customers are not able to recognize you differently from other companies, then it will become difficult for you to survive.

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11.) Too Many Pop Ups:

Nobody likes disturbance is something where they need to make a decision. Especially when the decision involves their hard-earned money. Pop Ups might seem beneficial to you, but they are annoying for customers.

This popup notification becomes a disturbance for your customers which leads to bounce rates. You will lose a portion of your customers if your website has too many pop-ups.

12.) No Exploration Without Registration:

You need to buy a summer dress. With organic searches, you open two links simultaneously. On one website, you can view innumerable dresses without any restrictions or formalities.

And another website started to ask for mandatory registration before further browsing. What will be the first action? Of course, you will switch to the website that gives you access to their products without filling any kind of detail.

In contemporary times, people are busy. They will prefer to leave your site without buying anything rather than wasting time on registration before browsing the options.

13.) Poor After-Sale Services:

In the eCommerce industry, after-sale services are important. When people trust you with buying your products online, they expect that you will provide them with assistance in case of any issues.

This is a major drawback of many eCommerce brands that differentiate them from the biggest companies. Your company must work on policies that ensure optimum after-sales services to the customers.

You can also read about eCommerce trends 2020, here.


One or more of the reasons mentioned above have contributed to the failure of thousands of eCommerce startups. Make these reasons your tips and avoid their mistakes. Start working on these factors to get the eCommerce website.

We will all agree that it’s not easy to get an e-store developed and run successfully, but it’s quite easy if you focus on each detail. Get in touch with the best eCommerce development company in India for a marvellous work.

If you have seen an e-commerce startup failure because of some other reason other than the one listed in this blog, then you are most welcome to share the same with us in the comment section below. Keep trading!

Shefali BasuAbout the Author:

I’m Shefali Basu, and I am a Sr. tech-consultant and writer working for PixelCrayons, which is a leading app  & software development company in India. I love to write about all the latest technologies.

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2 Responses to “ECommerce Startups Failure: What Exactly Is The Reason?”

  1. Paylocity says:

    we are using local product and promoting it nicely but i think we have more potential. Do you think we should charge a minimal fee for delivery or delivery for free?? Our customer are within 5-6km radius

    • EXEIdeas says:

      Welcome here and thanks for reading our article and sharing your view. Keeping this free will make it more royal to your customer.

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