Too many entrepreneurs jump into launching an online business without the research and knowledge they’ll need to make their new business a success. Avoid these 7 common mistakes many ecommerce business owners make.

Jumping straight from idea to launch.

Many entrepreneurs come up with what they think is a great idea, run it past a few friends or family members, then start a business based on their idea. The problem? They’ve skipped market research, or they’ve done their research the wrong way. Asking your friends for their opinion is unlikely to provide you with accurate guidance (for example, they are biased and likely don’t represent your target market).

Before launching an online business, take the time to do extensive market research and analyze cold, hard facts. Here are just a few of the questions you should answer via market research:

  • How many users are searching for relevant keywords each month?
  • Are there other businesses offering similar products or services?
  • Who will your main competitors be?

Failing to correctly anticipate market demand.

Before starting your business, you should have a realistic estimate of how much market demand there will be for your store/products, and how much competition you’ll have. You need data to help you avoid these pitfalls:

  • Too small of a market. Without enough prospective buyers, you’ll never make enough sales to succeed. Even if you dominate the market, if the market is too small you won’t make enough sales.
  • The market is not interested in your idea. Many entrepreneurs come up with unique ideas, only to discover the market isn’t interested. Try to find out if other businesses have tried something similar to your idea. Try to consider why customers might not be interested in your unique idea (for example, perhaps users are perfectly happy with the status quo and won’t be willing to pay extra for what you plan to offer).
  • Too much competition. If your chosen market has too much competition, you’ll have to invest too much time and money before you achieve profitability.

Myth: You can setup your store and start selling tomorrow.

You’ve probably seen the infomercials that boast anyone can setup an online store in just one day. In theory, that’s true -there are many great ecommerce platforms that make it fast and easy to setup an online store. But launching an ecommerce business requires far more than just setting up a website. Here are a few of the other steps you’ll need time and budget to tackle:

  • Setting up banking accounts
  • Completing legal requirements and licensing
  • Product development or sourcing
  • Fulfillment
  • Merchant account and payment gateway setup
  • Customer service
  • Logo, branding, and design
  • Marketing strategies

Myth: A SSL certificate = a secure site.

A secure socket layer (SSL) certificate is essential for any website that accepts online payments. An SSL certificate encrypts data while it travels between the user’s computer and the online store. However, that is just a start – you also need to take measures to keep your website code and database secure so data is not compromised once it reaches your site.

Under-estimating the startup capital required.

While its true that ecommerce website platforms start at less than $100 per month, your ecommerce software is only a small part of the picture. You’ll also need budget for logo design, merchant account fees, advertising budget, and purchasing inventory, just to name a few items. You should also expect the unexpected – budget extra for expenses you don’t expect, but will inevitably pop up.

Myth: Ecommerce lets you easily sell globally.

While its true that an online store allows you to accept orders from around the world, there is “more to the story”. You will need to consider:

  • International shipping rates and methods
  • Fraud (most credit card fraud happens from overseas orders)
  • Import/export laws
  • Local laws (a product that is legal in one country may not be in the next)
  • Local laws that restrict product claims and advertisements

Myth: Beat your competitor’s price and you win

The business with the lowest price doesn’t always win. Marketing success is far more complex than simply offering a good product at the best price. To make the sale, you’ll need to combine many different factors and sales techniques to convince your prospects that they want to purchase from you instead of your competitor.

To ensure you’re able to convert your customers into sales, you will need to consider your:

  • Offer (product, price, etc.)
  • Website usability (making it easy for customers to buy)
  • Company brand (what’s your reputation and image?)
  • Sales copy (often overlooked, but crucial)
  •  As well as a variety of other factors

If you avoid launch an ecommerce business with a well-though-out plan and avoid these common mistakes, you will greatly increase your chances of success. What myths and mistakes have you seen online businesses make? What tips can you offer for success?