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90% of ecommerce startups end in failure within the first 120 days

By Sasha Fedorenko July 23, 2019 - 4:36 pm

A significant percentage (90%) of ecommerce startups end in failure within the first 120 days, says new research by Marketingsignals.

The analysis polled 1,253 ecommerce startups owners in the UK to understand the reasons behind the industry’s lack of growth.

According to the research, 37% of the polled ecommerce entrepreneur said that their failure could be attributed to an inability to compete or deliver online marketing, with 35% saying a lack of online visibility was the main factor.

Further research found that the same proportion of respondents (35%) felt failure was down to them being too small to compete or there being no market for their products and services, whilst 32% reported that it was due to them running out of cash.

Completing the top five reasons for failure, was price and cost issues, with 29% of failed startup owners claiming this was the reason why they folded.

When further quizzed on the reasons why their online startup business failed, 23% said that it was due to being outcompeted, whilst 19% blamed retail giants such as Amazon for dominating a large share of the consumer online retail market.

On the other hand, 6% felt that their business collapsed due to their lack of customer service, whilst 14% felt it was due to the poor team they’d built around themselves.

Completing the top ten reasons why ecommerce startups fail was product mistiming, with 11% of startup owners claiming that the reason why their business failed was due to “the right product, wrong time.”

“It’s clear to see that having an online presence and being visible on search engines is a key area e-commerce startup need to focus on to ensure they succeed.”

“As nine in ten online startups fail within their first 120 days of businesses, it’s incredibly important that business owners put provisions firmly in place well before launching – this must include bulletproof search visibility and online marketing strategy, as well as ensuring there is a market for their product offering. A targeted, strategic approach to digital marketing is vital to the success of any online business in this day and age, only more so for small businesses who are just starting out. Many tools can be used to increase their brand awareness and search visibility in their first few days and weeks, where consumer trust and loyalty hasn’t yet been established.”
– Gareth Hoyle, managing director at Marketingsignals.com

  • jim
    2 years ago

    too many third party apps and services punting their selves as must haves raking of the top,
    to many entrepreneurs ,thinking all you need to do is import from china and add a mark up

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