Common Challenges Faced by Online Businesses and How to Overcome Them

The world’s largest retail channel is expected to be e-commerce, as declared by According to Euro monitor International, by 2021, e-commerce sales will account for 14% of all retail sales outstripping conventional channels like supermarkets, apparel and footwear retailers, and independent grocers. The boom in e-commerce sales, however, does not mean that all online businesses are making money consistently. The hardest part is, of course, developing the business and ensuring that it is sustainable; with only three ventures surviving past the tenth year, it can be appreciated that this is far from being easy. E-commerce companies face some unique challenges – some of the major ones are highlighted:

Common Challenges Faced by Online Businesses and How to Overcome Them
Common Challenges Faced by Online Businesses and How to Overcome Them

Lack of Verification of Identity Online

When an e-commerce site receives a visitor and signs up, all that the site knows about the visitor is what he has filled up in the registration form. Whether the entered information is authentic or not is something that is not verifiable. It can create a huge problem when a visitor buys something of high value on COD basis and the business discovers too late in the day that the address does not exist and the contact phone numbers are invalid or even fake. There are a number of actions and processes that can be initiated to overcome this challenge. If any customer, especially if he is a new customer, is making high-value purchases, it should signal an alert. Fake email addresses and phone numbers can be detected by sending out automated emails or phone calls that require the customer to respond in a particular way. Fake addresses can be detected by verifying that the zip code matches with the state/city.

Competitor Analysis

E-commerce companies, just like conventional businesses are always trying to do something better than the competition. In fact, classical marketing theory has always focused on this aspect that you need to study your competition intensively and do whatever they are doing in a better way so that you can steal their market share. What you really need to do is to evolve a strategy that is aimed at differentiating yourself from the others in the minds of the customers. Analyzing the strength and weaknesses of the competing products as well as the real need of the market will help you to not only improve your own product performance but also position the product in a way that the customer can readily identify with and differentiate from the rest. Online businesses, especially need to focus on promoting the business and the brand using social media, blogs, and even tried and tested methods like email marketing to pitch their product to potential customers. Promotional offers, as well as value-added loyalty programs, can greatly help in boosting profits. Ensure that customer service is exemplary and can act as a strong reason to buy when sharp product differentiation may not be possible. If you operate an online debt relief company, the perceived difference in the minds of customers will be revealed by the debt consolidation ratings.

Sustaining Customer Loyalty

It really does not matter if your website is really fancy looking if you are not able to engage with potential customers and earn their trust and loyalty because, without these essentials, the business is sure to fold up. In the virtual world, building trust is often a very tough job because sellers and buyers cannot interact physically and nor can the buyers physically touch and feel the products before purchasing them. It follows that consistent communication that is credible and holds the interest of customers is the only way that the brand can establish itself and earns loyalists who will be willing to swear by it. Of course, one cannot discount the impact of the word of mouth by customers who have actually gone ahead and experienced the product after purchasing it. Online businesses can accelerate the brand building exercise and reinforce their online reputation by delivering products that perform better than what customers have been led to expect and then follow it up with outstanding customer service. If the customer is delighted by the entire experience, not only will he return for making purchases but also evangelize the brand to his contacts. You can help the creation of customer trust by displaying your company name, the street address, phone numbers, and other contacts, the helpdesk number as well as customer testimonials and photos of your business. Showing photos of your key staff members helps to humanize the business and customers tend to trust you more. Display security badges that help to reassure customers that shopping the website is safe and that their confidential information is transmitted in an encrypted form ensuring that the data cannot be misused. Creating a blog section and adding a live chat feature are very helpful in reassuring customers of the authenticity of the business. Another very effective way of locking in customers is a loyalty program that rewards repeat purchases.

Product Return and Refund Policy

According to a survey conducted by UPS and com Score, 63% of Americans buying online check the return policy before committing themselves, and 48% report that they would be inclined to purchase more if offered hassle-free product returns. When a product is returned by a customer, not only is a sale lost but there is a significant loss of reputation due to which a potential customer could be lost for life. Companies also have to bear the cost of shipment, which can be quite steep and take away a big chunk of your profits. The way you can minimize returns is to first list out all the product specifications and capabilities very clearly to prevent customers from being misled about what the product can do. Also, build a returns policy that has a friendly tone and lists out everything in simple language. It is also important for your staff to know what exactly the policy covers and how to deal with customers efficiently.


Online businesses have to operate in an extremely challenging and competitive environment. To survive and thrive, you need to evolve effective strategies to counter the challenges, use them to improve your own systems and go all out to delight customers.

Author Bio

Kelly Wilson is an experienced and skilled Business Consultant and Financial advisor in the USA.  She helps clients both personal and professional in long-term wealth building plans. During her spare time, she loves to write on Business, Finance, Marketing, Social Media. She loves to share her knowledge and Experts tips with her readers.

pravesh Maurya

Hey all, I am Pravesh Maurya, as a blogger, writer and content marketer also started to influence marketing. – One place to expand your horizon! We welcome our visitors with a huge collection of informative blogs on trending topics. Be its Finance, Insurance, Tour & Travel, Real Estate, business, shopping and Make Money Online Tips, we have got you covered!

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