There are currently over 800,000 vendors and merchants running successful Shopify stores around the globe. But, not all of these e-commerce entrepreneurs find success. In fact, according to Shopify statistics, nine out of every 10 Shopify stores fail—with only 5-10% of business owners seeing success. This high rate of failure tends to happen in the first five years of a business’s inception.
It’s no surprise that Shopify store owners are battling to keep their e-commerce shops alive. In this highly competitive market, new Shopify store owners aren’t competing just with other newbies—they’re battling against established, multimillion-dollar organizations, too.
Six Reasons Why Shopify Stores Fail
There are multiple reasons why Shopify store owners struggle to succeed. Good sellers who come out on top are often the ones that learn to avoid making the same mistakes as their competitors.
Shopify has a 23% market share of all e-commerce stores, with direct competitors (like WooCommerce) holding relatively lower market shares. This puts Shopify in a very unique position: The failure rate may be high, but the reward is higher, too.
A very competitive e-commerce platform, Shopify provides you with a powerful toolkit and capabilities that can stand up to big, e-commerce giants. The returns that come with running a stable e-commerce store on Shopify have been consistently outranking any other platform.
With only one in 10 startups surviving their first 10 years, let’s explore five reasons why so many Shopify stores fail.
Reason 1: Selecting the wrong niche
Your choice of niche is one of the most important parts of running an e-commerce store. Every niche has a specific market share and requires unique customer needs. Understanding your niche can help you better identify and focus on the appropriate customer base. And, understanding your customers before you start selling is imperative to your Shopify store’s success.
A major reason Shopify sellers fail is that they lack the patience and discipline to research their selected niche. Niche research is an important investment of time and money and essential to your Shopify store’s long-term success. Choosing a trending niche and diving into it headfirst is not a smart decision, and will eventually lead to failure.
You should plan to spend time carefully selecting a niche that’s right for you and one with a healthy audience. It is also important to consider a niche with low competition, so you have a good chance to grow and own a bigger piece. Most unsuccessful stores choose a highly competitive niche and get swept away by their bigger, more experienced competitors.
Reason 2: Subpar products
In the e-commerce world, survival of the fittest reigns supreme; and, if you sell products that no one wants to buy, you won’t make it very far. Any customer making a purchase from your store is expecting to receive quality products delivered in a timely manner. If you’re selling low-quality products or defective products, you’ll no doubt lose customers and money. As we previously mentioned, e-commerce is a highly competitive market. If you don’t maintain quality standards, your business will ultimately fail.
With good products come good reviews. And, customer loyalty and word-of-mouth recommendations can be a big business booster for you, helping you to expand your reach and boost your growth rate. But you have to earn those good reviews by supplying consistent, top-quality products and services.
Niche research and a customer-centric attitude can help you gauge the needs of your clients, so you can deliver relevant quality products and build those good reviews. With unique, top-shell products, you’ll build stronger relationships with your customers, gain their trust, and keep them wanting more and more of your products.
Reason 3: Low-quality shop interface, content, and design
Successful e-commerce is all about good presentation, and a low-quality shop will often drag you down. UI/UX (User Interface and User Experience) design is a key part of putting your best face forward, and ensuring your website and the online store look great and work well.
Mismatched fonts, spelling mistakes, low-quality images, and plagiarized or inaccurate item descriptions are prime culprits responsible for online business failure. Mistakes like these make your website look unprofessional and scare potential customers away. Lots of errors are often an indicator of an impostor site or fraudulent store, too, and can deeply impair your sales and marketing efforts.
For many new Shopify store owners, it’s a common mistake to initially forgo improving customer experience. The rationale is that it’s better to first achieve profitability and then invest in a better UI/UX. However, this backfires almost immediately—because you can’t achieve profitability if users aren’t able to effectively visit or use your site.
Additionally, it’s important to make sure your Shopify store is accessible on multiple digital devices and looks good on each screen. Investing in a Shopify mobile application, or making your website accessible on different screen sizes, will maximize your sale opportunities and give users a chance to shop whenever and wherever they like.
Shopify’s nine free store themes ensure that no matter where customers are finding you, your site is attractive and easy to use. Many online business owners gravitate towards Shopify’s premium selection of specialty designs, added features, and customizable options. (Shopify’s theme store has more than 75 decoration themes starting at $180 and over 1,500 premium Shopify themes, starting as low as $17.)
Reason 4: Poor customer service
With low customer loyalty, it’s difficult for any Shopify store to survive more than a few months. Building customer loyalty through solid customer service ensures your clients have a great experience every time they visit and shop at your store. Unsatisfied customers will leave bad reviews, and poor reviews are a leading cause of decreased sales and business failure.
Good customer service attracts new customers, too. A good first step for establishing stellar customer service can be as simple as providing an FAQ page. This can help customers better understand your products.
Deploying 24/7 customer support through apps can be another cost-effective way to gain more revenue. (Shopify offers a collection of apps to help you deal with just about any customer issue. Everything from managing and processing refunds to dedicated customer service.)
A key part of the customer experience is dealing with returns, refunds, and disputes. It’s a good idea to offer customers a fair return policy, just in case the product is damaged prior to or during delivery. Stores like Amazon will send customers free replacement products when damages occur. This has drastically improved their customer loyalty, and as a result, Amazon clients feel secure making a purchase, knowing they have the protection of a solid return and refund policy.
Reason 5: Unclear marketing strategy
Before launching your Shopify store, plan to map out a complete and cohesive marketing strategy. Most Shopify stores that fail often have no strategy, and only spend money on marketing when their business becomes noticeably slow.
Sometimes Shopify store owners believe that a premium, high-cost ad should be part of their marketing strategy and can help them quickly achieve success. But it should be noted that this strategy isn’t effective and instead incurs undue debt and can lead new online business owners to spend more than they can afford.
Marketing is all about being cost-effective, having a plan, and sticking to a schedule. And the ads you integrate into your marketing strategy don’t need to be expensive. Youtube, Facebook, Snapchat, Instagram, and many popular social media platforms offer ads at an affordable price—and are a great source for targeted marketing.
You can also send free product samples to popular social media bloggers and influencers, as a good way to grab some free marketing. Or consider featuring special “flash sales”, special deals, or limited discounts. For example, if customers buy all the items in your special deal together and access your discount–chances are they’ll return to your site and keep watching for more opportunities to cash in on your deals and products.
Reason 6: Choosing a bad drop shipping service
Another common reason for failure is choosing the wrong drop shipping service. Dropshipping is when an online business leverages a third party to help manage order fulfillment. The online business doesn’t keep the products it sells in stock instead the seller purchases inventory when needed from the third-party wholesaler or manufacturer—and uses this partnership to fulfill and deploy orders. This can be incredibly helpful for online sellers who don’t have a physical storefront or property where they can house inventory.
Since the third-party seller will manage your dropshipping services, the company you select needs to be trustworthy and have enough stock to fulfill your orders. A good dropshipping service will help you fulfill your distribution needs, and always have extra stock on hand.
If you choose a service that is frequently out of stock or doesn’t provide order support, you may not only lose customers—but risk your business, too. Do your research carefully, and make sure your dropshipping service is trustworthy before contracting a drop shipping service.
How to Improve Your Success on Shopify
Let’s imagine that you’ve been able to conquer these e-commerce sins, would that be enough to lead you to glory and success? As we mentioned before, not committing these five common mistakes will help to ensure your business survives. However, it takes more than that to become successful.
Recent studies conducted and published by Shopify have observed that most prosperous and long-running stores have also optimized the experience for their customer’s benefit.
Most successful stores have a good returns policy in place. However, it doesn’t necessarily mean you should accept all returns.
Instead, you should have a clear and concise return policy outlined on your website. House the overview in a prominent spot, like on your About Us page or in your FAQ, and make the content easy to find. That way customers can see what your policy is before making any purchase decisions. This will ultimately help minimize disputes, and you’ll end up retaining more customers. You should also offer free returns or replacements of defective items, this will help build more trust for your brand.
The Shopify app store can help, too. A perk of using it is you get to choose from a variety of helpful apps to automate different actions in your store. For example, you can create and send automated emails containing offers for customers based on their purchase history.
Automated emails can also be sent out whenever a customer adds something to their cart and doesn’t make the purchase. This can help you maximize sales conversions without spending a lot. You can also set up product upsells, and add-ons to be automatically offered to your customers, as well as provide a first-time signup discount. Doing this leads to your consumers spending more money while they are in your store, helping you achieve more sales.
We hope this article was helpful in pointing out some of the mistakes most Shopify store owners make, how you can avoid them, and ways to overcome and ensure your Shopify store finds success. To learn more about Shopify, be sure to read our other blogs: “How Much Does an Average Shopify Store Make?” and “What Percentage of Shopify Stores Are Successful?”