What Risks are Involved in Starting an Ecommerce Business?

If you are thinking about starting an eCommerce business, you have probably been drawn in by all of the advantages it has to offer. For example, you can forget about having to pay rent for a storefront and having to pay for all of the overheads that involves. There is also the potential to make a lot of money, and it is simple to start this type of business online. 

But you must remember to look at this debate from both sides. There are also some risks that are going to be involved in starting an eCommerce business. So, let’s take a look at what they are and if you are able to overcome them.

The Platform Goes Down

If you are new to creating an eCommerce store, then you are probably going to choose a platform to help you build your website. For example, this could be BigCommerce or Shopify, or set up a shop on eBay or Amazon. These are popular platforms since they make it easy to begin selling. But, there is one risk. The server could go down due to problems or if they are updating them. When this happens, it means that your business will not be able to operate.

So, what can you do about this risk? Well, you can try creating your own website and not use this type of platform. But this can be very difficult. The best thing you can do is try to do your research and select a platform that most people like and praise.

A Product Causes Damage

There can be instances when something goes wrong with the products you are selling. For example, someone could get hurt, or the product could cause damage to property. Often, you do not have control over whether this happens, as something could go wrong with the product at any time. A customer could then complain and open a case against you. 

The best way to protect yourself is to get relevant insurance – like if you’re an Amazon seller, then Amazon liability insurance will be best suited to your needs. This is going to protect your business if something does go wrong and makes a claim. The insurance policy will ensure that you have the financial capabilities to deal with this type of scenario. It is a worthwhile investment that can give you peace of mind.

You Have No Customers

We have discussed a lot of technical risks that are involved in starting an eCommerce business. But let’s keep it simple. There is a risk that you are not going to attract as many customers as you thought you would. Perhaps you thought you had cracked the code and were offering fantastic products. However, you have had next to no sales.

Yes, this is a risk. But it is one that you can overcome. For example, perhaps you need to work on the design of your website, as it might not be attractive to customers. In addition, you may need to put in more time to SEO and become visible on Google. Know that this risk is one you can remedy with some hard work on website design and optimization.

Interesting Related Article: “How to choose an ecommerce platform: 5 Important factors to consider