The Pitfalls of Online Business

While setting up an online business to make money online is easy, there are also pitfalls that you have to be aware of. In this article we will take a look at some of the pitfalls of doing online business and we also look at some preventive measures.

So what are the pitfalls of doing online business (from large to small):

  • Poor quality of the business website.
  • Poor harmony between internal business processes.
  • Product or service is not suitable for e-commerce.
  • Poor security of the business website.
  • High cost for investments and maintenance. (For instance if you need to grow fast because of the popularity of the website it cost a lot to buy a server park on the spot.)
  • Customer volume is too small.
  • High delivery costs or distribution costs.
  • Poor distribution.

Let’s take a closer look at two of these pitfalls:

Poor quality of the business website
A poor quality website will of course have a negative effect on your online business, thus on you profit. What do you mean with quality?

With the term quality we mean a number of things; the design, usability, conversion.
These three things are depend upon each other.

Let’s explain with an example:
If the design for instance is very poor (for example the navigation on the website) then this will have an effect on the usability. The potential customer can’t find what it is looking for so this will affect the conversion rate, thus making you less money.

So how to address this problem when you design a new website and service? The best thing to do is thinking like the customer and in conversion terms; why is a potential customer coming to your website and what do they think that they can do on your website or service? If you figure this thing out, you must make sure that they can do and find these things easily on your website. This way they are easily converted to a sale!

Product or service is not suitable for e-commerce
Of course not all products are suitable for e-commerce (with e-commerce we mean buying online.) For example if someone is selling two million dollars sailboats they will not sell them through a web shop.

Again you should think like the customer and in conversion terms. The customer wants to buy a sailboat. Most likely they will start the hunt for a suitable sailboat by searching the internet, because they are looking for companies that are selling sailboats.

So it is important that the companies have a business website that has information, picture, and videos of various models that they build and sell. But what sort of conversion can this company do on there website?

As said before they will not sell two million dollar sailboats online, but the potential customer most likely want to look at the sailboats before they think of buying one. The conversion will be that they can make an appointment online to look at some sailboats.

This example shows that almost every business should have a website, but this doesn’t mean that you have to sell online!

Conclusion
By thinking as the customer you can prevent a lot of problems. The other pitfalls like harmony between internal business processes, website security and distribution are of course also very important. Without a good organization in the back-end every online business will fail!

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