Top 5 Things E-commerce Entrepreneurs Find Most Challenging

At some point or other, all entrepreneurs face a fair share of challenges in their business. And when the initiative is e-commerce, things become even more tricky. The world of e-commerce has its unique set of challenges.

When you consider that up to 80% of e-commerce businesses fail, you realize just how unforgiving this industry can be, to the unknowing and the unprepared.

Fortunately, this is an industry of tremendous promise. Global e-commerce spending has risen to over $2 trillion over recent years. Analysts predict it to reach over $4 trillion by the year 2021.

In this write-up, we highlight some of the prominent obstacles that e-commerce entrepreneurs find the most challenging. If they successfully overcome these, the road ahead is relatively easier.


Sometimes the appeal of e-commerce stems from not having to deal with the tribulations of managing physical business premises. Do not be fooled, as the technical difficulties of an online store can be just agonizing.

a) Basic Issues

E-commerce stores constantly have to deal with day to day tech problems.

  • Website speed
  • Maintaining server and support
  • Database limitations
  • Data privacy, security issues, among many more

Technical difficulties are not just a huge annoyance. The slightest technical problem with your site can see you lose scores of potential long-term customers before they have even given your business a fair chance.

A recent Google study has found that 53% of mobile visitors will abandon a webpage if it takes longer than three seconds to load.

This is why e-commerce entrepreneurs should carefully select and sample their service providers. Hosting service and support has to be first grade. 

Having a secure and solid IT support system from the very start helps to run the show smoothly.

b) Lack of Integration between Operational Systems

E-commerce operations deploy data management systems, spanning across multiple departments. If these systems are not properly integrated, it could be a disaster.

Receiving orders, validating the customer details, followed by the physical side of arranging and packing the products and shipping out on time, it is a huge chain.

Every team and process should be streamlined to work in complete sync. 


Mastering the sales funnel for e-commerce sites may require a different approach.

a) Attracting the Customers

Getting the attention of potential customers of an e-commerce store differs tremendously to that of physical stores.

These prospects are not going to stumble upon the store by chance while walking along the street or in a shopping mall.

Bringing them to your online store requires a strong marketing strategy, involving several and ever-evolving digital techniques.

It’s important to remember that starting a business is easier but generating leads and customers is most difficult. That’s why the marketing department always remains on its toes.

b) Converting Site Visitors into Sales and Leads

Getting potential leads to a site is only half the battle, with e-commerce conversion rates ranging from 1% to 3%.

An e-commerce site needs strategic design and optimization to hold the interest of the average online consumer and to close the sale.

c) Retaining Customers

There is no dearth of competition. With customers fleeing at the slightest technical or logistical annoyance, e-commerce entrepreneurs must invest in building customer loyalty.

Addressing voice of every customer is very significant.


Security is a big concern that often disturbs online customers.

But as much as the customers are wary of it, e-commerce businesses to want to provide their customers with a foolproof shopping experience. 

Consumer fraud is on the rise in the e-commerce world, with US retailers alone losing $32 billion in 2014 to consumer fraud.

E-commerce entrepreneurs can remedy this through undertaking fraud education and implementing customer and payment verification measures.

Customers should only be asked for details that are essentially required for completing the purchase. Databases should be made robust using the latest technological tools.


Knowing that 78% of consumers will abandon a transaction because of poor customer service will make you want to pay special attention in this department.

Especially so, when this reality is combined with that of stiff competition in this industry.

a) Lack of Personal Assistance and Personal Contact

This is where e-commerce businesses may be at a disadvantage. They lack the face-to-face contact on which physical stores thrive.

E-commerce businesses need to establish ongoing, open lines of communication with their customers.

b) Personalization in Client Liaison

E-commerce lives on customer interaction that is purely personalized, such as sending on-going personalized emails, addressing support, sharing special offers and schemes.

This needs a lot of care. Modern day customers are smart. If they don’t get personalized attention, they switch.


Tapping the near and off-shore customers is the new potential in the e-commerce market. But catering to global customers isn’t easy and can be highly challenging.

a) The Legalities and Logistics of a Borderless Economy

Selling and shipping items across various countries can make it tricky to deal with:

  • The varying and complex government regulations on items entering cross borders
  • Managing transactions between with numerous international currencies, all subject to ever-fluctuating exchange rates
  • The accounting and tax management of a "stateless income"

b) Localization and Globalization of Products

Shipping products to an international market certainly do expand the customer reach but it also creates the added operational cost of having to localize products to different markets.

E-commerce stores shipping to international destinations have to find the balance, continually, between localizing and globalizing their products to meet the needs of an international customer.

c) Shipping Logistics

Shipping can be a thorn in the side of both e-commerce customer and business. E-commerce loses billions of dollars each year to shipping returns. The US retail economy alone experienced  $351 billion losses to returns in a single year.

Online shopping has significantly higher item return rates of 30-40%, as compared to 10% return rates of physical stores.

Long shipping times and high shipping costs also repel many potential customers. In fact, surveys show that up to 80% of consumers consider free shipping a major factor in their purchasing decisions.

There are many elements of shipping- such as varying shipping costs, varying shipping laws, and delayed shipping times- that are mostly out of the control of e-commerce businesses.

However, business owners can take measures to implement smarter shipping policies, which reduce these costs to a reasonable extent.

d) Staff Management and Collaboration

The lack of effective staff communication and collaboration is a continual struggle for most businesses.

When multiple geographical locations, a lack of face-to-face contact, language barriers and varying time zones enter into the mix, this does not get any easier to manage.

Final Thoughts -

E-commerce certainly yields well because the products and services have a greater reach. But running it effectively can be a daunting task.

E-commerce businesses continually need to invest in terms of organizing processes and resources. From ensuring a smooth website to delivering a product and inviting customer loyalty, all need efforts.

Regardless of brand popularity, the ability to handle on-going bottlenecks determines its long-term, business success.