10 Failures That I Noticed When I Operated 2 Online Shop

Online Shops

Online Shop: Entering e-commerce was the best study of my life. You won’t find what you’ve learned by actually starting a business in an MBA or any other business course.

That said, they all learned from the mistakes I made. Every time you make a mistake, you can look back on what you should have done so that you can improve it in the future. So today I would like to share the mistakes I made and help you avoid them and lead to faster success.

Failure # 1: Too Rushed To Calculate

When you ask an experienced entrepreneur what is the most important skill in running a business, everyone will say “computational ability”. Business at the time of opening was like a hobby for me. As a result, I didn’t have to create a detailed business plan or focus on business calculations that I should have done.

As a result, we have entered a niche market where demand is sufficient but profits are not expected. The product I was trying to sell was very cheap and I had to make much more sales than I expected to make a reasonable profit.

The formula for determining business feasibility is very simple. To find out how profitable it is, you can use the following formula: 

Profit = Demand * (Income-Cost)

To analyze this formula, let’s first assume that 20,000 people are searching for the product you are dealing with (this is a combination of key and long-tail keywords (multiple words combined). It is a rough prediction using the thing).

Assuming that about half of them are aware of the existence of the shop, there are 10,000 potential buyers. If your average conversion rate is about 1-2%, you’ll have 100-200 sales. Assuming an average order value of $ 100 and a net profit margin of 30%, your profit is expected to be about $ 3,000- $ 6,000.

Of course, these are pretty rough estimates. In any case, by making such calculations in advance, you can get a good idea of ​​what kind of situation you are in. After running two online shop, I finally realized the importance of this calculation. The average order for the second shop was good, but the profit margin was low, leaving little money after deducting expenses.

Failure # 2: Not Finding a Niche In The Market

Both of the online shop I started were based on drop shipping models. This meant that I had to compete with hundreds of competitors who deal with the same items as my merchandise.

Unless it was different, I was just like any other shop and couldn’t add value to the situation. And that was before we had to compete with big companies like Amazon and Walmart.

I thought I found a good gap in the market at the first shop, so I just jumped in and went crazy without investigating competitors or grasping the market situation. As a result, I missed the big company that was winning alone there. They have already sold all of my products, have received hundreds of reviews and thousands of likes, have popular blogs, and have received countless media interviews. In short, they had already touched on all the bases that existed in the market. Nevertheless, I dared to challenge myself because I thought I had a chance. Needless to say, the shop was unsuccessful.

The second shop had a big gap in the market about information, not merchandise. I was able to jump into that opportunity, conduct the necessary research, and create a wide range of resources in niche markets.

It’s not that there was no other such information, but it was easier to find and provided more useful information to the visitor. The result, coupled with SEO efforts, was to win as many as 15,000 natural search visits per month in a highly competitive niche market.

The easiest gaps to find are information. It requires less financial investment and the value of the business will include not only the product and customer list, but also the content to be transmitted.

Failure # 3: Too Much Reach For The Product

The first shop I ran sold environmentally friendly recycled bags. However, the sales of bags were not good enough, so we gradually started to add other eco-friendly products.

In the end, we ended up with a wide range of products that weren’t very relevant except for the commonality of being “environmentally friendly.” It was fine for more common brands, but unfortunately, it wasn’t. As a result, although it did not directly affect sales from paid search, it became extremely difficult to appeal to specific customers and take measures against search work.

The failure here was a branding error rather than an economic one. Proper brand building is very important because the brand reflects the actual value of the business.

Failure # 4: I Didn’t Plan The Content

The fourth error was also experienced through the first shop operation. I didn’t put much effort into content marketing, so it was very difficult to get access from organic search and SNS. It may have been even more so because the products we were dealing with were bland eco-bags. From that experience, the second shop corrected this point and started a business based on content marketing.

Writing content about a niche market that isn’t interesting is difficult.

In fact, who can write a long sentence about eco-bags? The secret here (which I learned later) is that content marketing should focus on the customer, not the product.

Consider the example of an eco bag. First of all, what kind of people do you think may use eco-bags? “People who are interested in the environment” may come to mind immediately. In addition to that, I think there are people who “have a healthy diet,” “exercise regularly, such as yoga,” and “value natural beauty.” All of this comes to mind intuitively, but it can be firmly supported by conducting a survey.

By building a content marketing strategy that focuses on the ” ideal customer image-persona ” rather than the product in this way, you will be able to write more and more strongly engage with your audience.

Even if the niche market is highly technical and you can write about 50 to 100 articles about a product, it is unlikely that the information will go by itself. In order for content creation efforts to be rewarded, it is important for customers to find more in common with them than just “buyers.”

Failure # 5: Not Thinking About Free Samples

Depending on your business, you can improve your performance by giving out free samples. Even in niche markets with the theme of “environmental consideration,” such opportunities have come around.

Unfortunately, I made the wrong decision and ended up losing money on the project. Of the 300 free samples we sent, only one led to sales. It was a big pain.

Free samples, giveaways, and free samples are effective ways to get your product to market, but not all types of products or niche markets work. Distributing free samples is suitable for products and consumables that do not last long. Examples are skincare, foods, and supplements. For other types of merchandise, such as clothes, it can be difficult for the free sample strategy to work, even if you can easily buy another one of the same.

What I learned from this very expensive mistake was that such props would not lead to increased sales. It can help you build your brand, but it requires a solid plan in advance.

Failure # 6: A contest for prizes was held without a plan

Despite being severely hurt by the free sample, I was still looking for an effective way to promote the eco-bag business. So I decided to hold a contest with a blogger. I chose a few links to solicit shares on social media and increased my followers and email list.

This time, we made good financial preparations and prepared a $ 50 gift certificate as a free gift. As a result, the number of followers on social media has nearly tripled, and the contest was a success.

No, is this a success in reality? As mentioned in Part 4, “I didn’t plan the content”, so there was no content plan to support the increased number of followers.

The latest thing to keep in mind on social media is that you need to keep your followers on track from the beginning. Find content every day, share it, update new content on a regular basis, talk to your followers, send out useful information to your followers, and more. Who would have imagined that Facebook and Twitter would be so hard? In my case, it was eventually forgotten by the increased number of followers. Through this experience, one lesson has been learned.

If you’re running a contest, it’s important to have a solid plan for the aftermath. Making that plan can be far more valuable than the contest itself.

Failure # 7: Wasting time on monotonous work

There is a concept of “opportunity cost” in economics. Basically, when you decide to do one of the multiple options, you think of running out of time for other opportunities as “cost.” So the cost of one opportunity is actually all the other opportunities that exist.

Many people like me who started an online shop from scratch probably handled the whole process themselves. From launching an online shop to modifying / processing, uploading products, creating product descriptions, and all sales promotion activities, I think it’s like a solo stage.

It’s great to be able to do it all by yourself, but the problem here is that it takes a lot of time. That’s because the wasted time is also a valuable time to spend on other things, such as spending time with family, developing new ideas, and building business relationships.

There are two types of monotonous work: what is needed and what is not needed.

It’s a good idea to automate the monotonous tasks you need as much as possible. This process can be a bit expensive, but it’s definitely worth the money you’ve invested in, given the worries you can solve and the time you can save. What’s more, it’s relatively easy to find someone who is willing to take on such tasks (such as inventory uploads and data entry) at a reasonable price. He said unnecessary monotonous work, spending too much time designing the logo on the site, tinkering with image-size pixels, sticking to the colors of the buttons on the site, and fixing details that only you could see. Work should be omitted.

Some of these tasks may have a positive effect on conversions, but only after more visitors and 

comparable sales. Therefore, it is best to avoid these monotonous tasks in the early stages of business.

After spending a few hours fixing the site, you may feel like you’ve worked hard. But in fact, there must be other ways to spend time more effectively.

Failure # 8: I Didn’t Know The Ideal Customer Image

This is a mistake I learned when I was running my first online shop, but I made a similar mistake in the second one.

Niche market research can be divided into “finding products” and “knowing your customers well.” One thing to keep in mind here is that although it is possible to develop products with customers, it is very difficult to develop new customers with products.

Traditionally, most people would think that numbers and analytics should be used for niche market research. That’s absolutely necessary, of course, but I’ve neglected another important step: “think about the ideal customer image and build that customer profile.”

Even with sufficient demand in niche markets, it can be very difficult to succeed without an ideal customer image. That’s exactly why I made a mistake in my second online shop. There were months when we were doing well, but I feel like we missed a lot of sales opportunities because we didn’t target our customers enough.

If you dig a little deeper, you should be able to find more gaps in the niche market. This means that being more targeted will be more beneficial to your business and will make it easier for you to identify the needs of your customers.

The second online shop I ran sold relatively complex electronic devices. Among the myriad choices in niche markets, there was a certain level of less complex, standard, and very advanced.

My shop handled all types, but looking back now, I think it would have been possible to build a closer relationship with our customers by limiting them to one type. .. I think it shouldn’t have been too difficult to develop a network of influencers that fit my business. My shop gave customers the impression that it was too professional for beginners and unsatisfactory for professionals.

Failure # 9: There Was No Concrete Marketing Plan

There is a saying, “Fail to plan, plan to fail / No success without a plan (not planning means that you are planning to fail)”.

When you launch an e-commerce website, it shouldn’t be too difficult to create a marketing plan if you already know who your customers are and where they are. Unfortunately, I wasn’t sure about either of them, so I had to go through trial and error, and it was just a plan for my daily life.

Every e-commerce site needs a comprehensive marketing plan that covers all the basics. Depending on the distribution channel. Your marketing plan may work better than other channels. For some businesses, pay-per-click (PPC) advertising may be more effective, while for others, search engine optimization (SEO) and social media will do the trick. In addition, E-mail will also function as a solid sales channel.

No matter what your plan is, it is important to introduce it firmly from the beginning of the online shop. New opportunities come naturally, but if you have a solid foundation, you will be able to grow steadily little by little.

Failure # 10: I’m Addicted To The Sweet Words Of Pay-Per-Click Advertising Companies

When your business is just starting out, it’s easy to find a solution among the many services and software available. I also don’t know how much time I spent checking various sites trying to find a solution to the problem I faced.

At that time, one advertising company caught my eye. Everyone was fine, but the company looked very attractive to me. The charges were high and could be a significant loss if they didn’t work. But before I knew it, I was fascinated by their marketing videos and the good performance of their customers.

After that, I had the opportunity to talk to them on the phone. In it, they were persuaded to overturn my business from the ground up and from there I could make the business stand alone like an autopilot.

Asking them for service was a disaster. Despite spending a lot of money on a six-month contract, all the sales I made during that period came from my own search engine optimization (SEO), not from pay-per-click (PPC) advertising. There was nothing. I think they are good advertising companies, and I don’t blame them. It was just my misconception that they overlooked that the solutions they offered were not suitable for my niche market.

The pay-per-click companies we’ve seen so far have set up two payment schemes:

  1. a) The advertising company charges a preset fee and uses a certain amount from it for customer advertising. 


  1. b) Pay the amount you decide (more than the minimum agreement amount) to the advertising company as the advertising fee, and pay the percentage of that amount as the service fee.

 Scheme (a) will only be a big expense for small businesses and will not be very profitable.

 Scheme (b) requires a large budget to get started.

It may also be a difficult system to work well for someone like me who uses drop shipping. Some of my friends have benefited from these services to some extent, but they were not at a level that would support their lives. If you are producing your own products, or if you can procure a very profitable product, you may want to consider this method. Many companies have had great success with PPC, but it’s important to think carefully about cost-effectiveness.

Advice For New Entrepreneurs

So far, I’ve introduced you to the many mistakes I’ve made, but you’re wondering, “How do you know if your business is on the right track?” it might be. I can’t foresee your future, but for your reference, here’s a summary of some of the hard, but worthwhile, work you can do to successfully launch and run your online shop. rice field:

  • Do a Niche Market Survey: Is There Demand?
  • Know your customers: What exactly are you trying to serve?
  • Find a gap in the market: Is it worth the addition, or is it just one of the same shops as the others?
  • Set up a solid marketing plan.
  • Avoid being distracted and wasting your time.
  • Think twice before doing it, and scrutinize the companies you work with. Avoid companies that “guarantee” high profits.
  • Adopt a simple and easy-to-use design that does not require fine adjustment.

Also Read : 7 Tips To Increase Productivity At Work From Home