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There are so many reasons why you might consider setting up an e-commerce business. Firstly, you can increase your reach to target more customers and, therefore, boost your sales.

Not only that, but as a business model, it is very scalable, you can offer more shipping and payment options to customers, and you’ll be presented with lots of exciting marketing opportunities.

It’s easy to see why so many businesses have turned to the internet to sell their goods or services, but despite its promise, a huge percentage of these businesses will fail.

In fact, a study found that 90% of e-commerce businesses will fail within the first three months of launching and that there are common reasons why. We will look at each of these in more detail below.

And understanding the reasons that so many e-commerce businesses fail can help you to mitigate the risks and ensure your business is a success.

Read on to find out more.

Poor online marketing

One of the biggest reasons that so many e-commerce businesses fail is that they don’t make the most of online marketing platforms. In fact, according to the earlier study, this led to the demise of over one-third (37%) of e-commerce businesses.

A strong online marketing strategy is the key to success. After all, how can you expect people to buy from you if they don’t know you exist? Therefore, every e-commerce brand needs to invest in an online marketing strategy.

But this doesn’t have to mean spending a fortune. There are plenty of budget-friendly and even free tools that you can use to get a strong strategy in place.

Lack of online visibility

Similar to the above, if you lack online visibility, you’re going to struggle to attract customers to your e-commerce website. Visibility is the overall online presence of your brand beyond your website, so this could be social media, advertising, search rankings and other online content.

Businesses with little to no online presence (outside their website) are going to find it much harder to drive traffic to their pages and build brand recognition. Not only this, but these brands can be seen as less trustworthy and rank lower on search engine results pages (SERPs).

In order to combat this and ensure your website doesn’t get lost in cyberspace, a strong search engine optimisation (SEO) strategy is key. So is creating strong online content and ensuring a social media presence.

All of this can boost your online presence and trustworthiness, increasing your online visibility.

Running out of cash

One of the greatest parts about e-commerce is that there is plenty of budget-friendly, even free, tools that budding entrepreneurs can use to get their business up and running. The problem is, no business can function with zero capital, and too many find themselves investing in their new idea, only to run out of cash after just a few months.

It’s important to remember that it might take you a few months to establish your business, build a customer base and encourage brand loyalty. Therefore, it’s important to have enough money behind you to keep you going through the first tougher months while you’re starting out.

Issues with pricing

When you first start out on your e-commerce journey, knowing what to charge can be tricky. Of course, you can do some market research and try to find out the industry standard, but you need to make sure your prices are competitive while reflecting your offerings and ensuring you turn a profit.

If you get your pricing wrong in the first instance, you might find that you either don’t make enough sales or that you don’t make enough profit to stay afloat. This is a fine line to tread, but one you need to get right in order to be successful.

Fierce competition

With so many e-commerce businesses already up and running, competition to secure customers can be really tough. Today’s consumers are happy to shop around, compare prices and read reviews before making a purchase.

Therefore, a business has to go above and beyond to make a sale, and this can be tricky in the early stages. This can be even harder in popular niches, with thousands of other brands selling similar goods.

Then you have big-name retailers like Amazon who can often offer similar products at lower prices; all topped off with next-day delivery. This competition can be too much for some and lead the business to fail, so it’s imperative you find and utilise your USP.

Little to no market for products or services

As we’ve said above, competition in the e-commerce space can be fierce, so it’s important that you don’t choose a product or niche that is already saturated. That being said, you don’t want to go too far the other way, either.

The aforementioned study found that a third (35%) of businesses start up an online enterprise despite there being little to no market for their goods or services. If there is no target audience and no need for your offering, who are you selling to?

This is a surefire way for your business to go under quickly, so it’s important to choose products or services with existing demand.

Lack of customer service

Today’s consumers expect a certain experience from brands, and in particular, they expect a high standard of customer service.

Having recently started an e-commerce business, too many people are unable to provide the answers and support that customers need, thus costing themselves a lot of sales. There could be several reasons for this, either lack of time, no staff or no awareness of the importance of customer service.

Whatever the case may be, answering customer queries in a timely manner and ensuring they can find FAQs and other helpful content is so important.

No clear return policy

Finally, it’s understandable that you don’t want to think about customers sending your goods back, but that is a reality of the world we live in.

Consumers want to know that they can easily return goods either to be swapped or for a refund. If your e-commerce website doesn’t clearly explain your returns policy, they are unlikely to risk spending their money with you.

That is why it is vital to have a clear returns policy displayed on the website and to make it as easy as possible for customers to return unwanted or faulty items.

When we think about e-commerce, our minds tend to turn immediately towards B2C brands, that is, the selling of goods to everyday consumers. However, selling your goods or services to other businesses online can also be very lucrative.

The problem is e-commerce B2B businesses models can feel a lot more overwhelming than B2C models with tried and tested methods.

But there is good news if you’re considering starting up a B2B e-commerce venture or moving your existing B2B business online. The more you learn, prepare and take action, the more successful your B2B initiatives will be.

Below, we’re going to take you through the B2B e-commerce model and some common misconceptions, as well as discussing whether B2B e-commerce is right for your business (spoiler – it probably is!).

What is B2B e-commerce?

B2B stands for business to business; therefore, B2B e-commerce models are those which provide goods or services to other businesses through online sales channels.

Because this centres around the supplying of goods or services from one enterprise to another, product prices tend to be a lot more flexible, and order volumes can be much larger depending on your offering.

Not only this, but since it’s businesses buying from one another, B2B e-commerce transactions are usually more logical, need-based and are far less impulsive than those made by individual consumers.

Some examples of well-recognised B2B e-commerce businesses include Amazon, Alibaba, Salesforce, Hootsuite and Microsoft.

The key benefits of setting up a B2B e-commerce store

There are a number of reasons why selling through B2B e-commerce can be very advantageous, and the key benefits for both you and your customers include:

• Being able to offer better customer service, as well as improved efficiency and productivity
• Opening your business up to a much wider customer base
• Increasing your brand awareness
• The ability to grow and scale up the business easily to meet market demand and customer needs
• Access to more data and analytics than ever before, making it easier to assess the effectiveness of marketing strategies, sales effectiveness, product mix, etc.
• The possibility to increase your sales engagement with customers
• Providing an omnichannel sales and communication experience to your customers

But despite these many benefits, some brands are still reluctant or worried about embracing this business model – and this is often down to a number of misconceptions.

What are some common misconceptions about B2B e-commerce?

Whether already running a business or considering getting started, there are some common misconceptions that hold lots of people back from selling B2B online; these are believing:

1. That the traditional B2B method is absolutely fine as it is and needs no updating
2. B2B customers don’t want to buy things online; they all want to speak with a sales rep in person or over the phone before purchasing
3. B2B pricing is too complex for an e-commerce website
4. Good customer service and business interaction don’t translate well online
5. B2B products are not suitable for online sales
6. E-commerce sites can’t comprehend more complicated payment methods such as monthly instalments
7. B2B websites don’t need to be fancy or cleverly designed
8. E-commerce sites are costly and take up a lot of your precious time

Of course, none of this is correct. In today’s digital world, as Millennials and younger generations are increasingly in decision-making roles, more and more people prefer to buy goods and services for their business online.

Not only this, but B2B e-commerce does not have to be costly, labour-intensive or complicated. There are plenty of tools and platforms out there that make creating and maintaining a well-designed, engaging website quick and easy.

What features and capabilities should a B2B e-commerce site have?

If you’re ready to get your e-commerce site set up, you might be wondering how to get started and what key features your website is going to need. The good news is there are certain features and capabilities that every good B2B e-commerce site should have, so tick these boxes, and you’ll be on the path to success:

Customer accounts

Firstly, you need to make sure your clients can buy goods, monitor orders and reorder as quickly and simply as possible. It’s a good idea to allow customers to create an account they can log into and quickly reorder or access past orders.

This should include solo and multiple user accounts, and you could even allow them to set up permissions and user authority levels for making purchases.

Order and pricing features

Where required, it’s important to indicate minimum and maximum order quantities, as well as fixed price lists or volume-based discounts.

If you don’t offer fixed prices and instead offer tailored packages, ensure that contacting the relevant sales reps is as simple and easy as possible, pop up chat windows can be very helpful for this.

Payment options

Flexible payment options and portals such as buy now, pay later (BNPL) are great for customers as they offer them a range of ways to pay. As such, it’s a good idea to offer a variety of portals and ways to pay, carefully displaying all options on your e-commerce site.

Courier and shipping options

As well as offering different payment options, it’s a good idea to offer a range of different shipping options. This can be particularly important for businesses who need swift deliveries or special courier services for heavier, larger or more fragile goods.

Administrative features

These features should also benefit the business by synchronising orders, inventory and client profiles with the administrative office. Your site should also integrate helpful business systems such as bulk pricing, quote management and inventory handling.

Data and privacy

Finally, you need to make sure that you follow all data privacy and other cybersecurity protocols to keep your business and customers safe. Remember, when using your website, businesses will be sharing a lot of sensitive information with you, and this needs to be protected.

So should you be selling B2B through e-commerce?

For the most part, yes, you should be selling B2B through e-commerce. That being said, depending on your goods or services, there will always be some exceptions, and ultimately you need to determine this for yourself.

However, as we move further into a digital world, consumers and businesses are increasingly looking for quick, simple and more efficient ways to get the goods and services they need.

Not to mention e-commerce opens you up to a much bigger audience, which is so important in today’s competitive market.

While lots of people are focusing on the festive season, getting ahead of their Christmas shopping and organising holiday celebrations for small businesses, the upcoming new year is a time for reflection and financial planning.

Ultimately, the sooner you get started with your business financial planning, the better prepared your business will be for the year ahead. However, as this is a busy (and exciting) time of year, it can be tricky to know how to get started with your finances.

But, if you want to set your small business up for success, this guide is for you. Below, we’ll give you a rundown of the financial planning tasks you need to take care of head of the new year.

1. Prepare all your key end-of-year financial documents

One of the most important parts of reviewing your finances and forecasting for the future is ensuring you have all the key financial documents at your disposal. Plus, these will be important for settling any outstanding payments as you move forward into the new year. The key financial documents you should gather include:

• Balance sheet  (statement of financial position)
• Profit and loss account (income statement)
• Cash flow statement

Having these statements is an important part of monitoring and analysing the overall performance of your small business. These help to show whether you’re running a healthy business or not, if you do need some adjustment or if funding, expansion or mentorship could be a possibility in the future.

Not only that but from these documents, you will be able to calculate your current assets and liabilities, any debt you owe and any profit you’ve made. Having all this information to hand can help you to not only see what you’re doing well or possibly where your business is suffering, but it is vital for planning your finances and budgets for the new year.

2. Start preparing your tax documents

Following on from our first point, although the end of the year might not be the end of the tax year, it is a good time to start getting your tax documents in order.

The types of records you keep will vary depending on the nature of your business, but it’s a good idea to keep as much as possible until the end of the tax year when you know your return has been filed correctly. These key documents could include:

• Bank statements
• Cheque stubs
• Certificates of loan interest paid by you
• Receipts
• Invoices
• Forms EIS3 or EIS5 if you were issued them
• Gift Aid payments
• Pension plan certificate

Once you’ve gathered all the documents and details that are relevant to your business, you can start the new year feeling more prepared and with some idea of what your tax bill might be that year. Not only this, but you’ll be able to look back at where you’ve been spending your money and where your key earners are, making it much easier to plan for the future with real data and insights.

3. Start planning your goals for the new year

Armed with all the relevant documents, information and insights, you can review your goals from the past year. This will highlight areas of strength and weakness, helping to give you a clearer picture of your business goals for the new year.

At this stage, you can start writing down your goals for the new year based on your findings. For example, is your goal to increase sales? Hire new employees? Cut business costs? Or perhaps to make the move from retail to online and open up another source of revenue?

Of course, these are just a few ideas, but at this point, you should write down each business goal you hope to achieve over the coming 12 months, including as much detail as possible about each one.

4. Develop action plans based on your financial goals

Once you’ve begun writing down your goals, it’s time to think about which are going to be your key priorities and get an action plan in place for each of these. It can be very helpful to use the SMART method by setting goals that are specific, measurable, attainable, relevant and time-based.

In order to get the most effective action plan in place, you should break each goal down into smaller objectives, making these more specific. You can then outline the key metrics with which you’ll measure your goals, ensuring your goals and targets are relevant to the overall success of your business.

Finally, you can set a deadline for each of your goals, making sure these are realistic and attainable.

This is because if you set goals that are too hard to reach or that you will not reasonably achieve by your set deadline, this can become very disheartening. So, to help you stay on track and feel as if your business is driving forward, set SMART financial goals.

An example of one such goal could be:

• Specific – I want to hire a new employee to enable a delivery service
• Measurable – I will measure their success by how much sales and profits increase
• Attainable – I have money in my budget to hire a new employee
• Relevant – I can offer training that will boost their sales and marketing skills, which will contribute to their success within the business
• Time-based – I hope to have a new employee by the end of Q1 and see sales increasing by the end of Q3

5. Create a strategic financial plan

Now you’ve got all your documents together and have outlined the goals you hope to achieve, the final stage is to get a strategic plan in place.

Look at your goals and plug in the costs needed to achieve them; you can then compare this with your current financial situation and determine the funds you’ll need to achieve your goals. Creating financial projections in this way ensures you have enough money in your budget to reach the goals you’ve set for yourself.

What’s more, based on your SMART goals, you can determine whether you will need more staff, equipment, etc., to drive your business forward. This will again help you to set budgets and get a strategic financial plan in place to ensure success in the new year.