For the sake of this article, I’m going to equate “profitability” with “success”, because when all is said & done, the only thing that really matters is profitability.
Conversions, visitors, margins, even sales are irrelevant if you aren’t profitable.
You can go out of business just as readily when business seems to be booming as you can when the cash register hardly rings. A marketing axiom that comes to mind says ‘good’ sales can hide a multitude of sins.
Running a 10+ year Shopify Partner marketing agency, I’ve seen first-hand the many obstacles to profitability that ecommerce stores face (identifying & overcoming them is a large part of what we do).
Here are a few of the most common obstacles we see on a regular basis:
No Market Demand
Let’s get this one out of the way up front: launching a store selling products no one is searching for or interested in buying, or a trend that’s been done to death is not a good idea.
If you’re new and launched a store based on a guru’s Youtube course, spent a few minutes on AliExpress looking for “winning products”, or saw something on Tiktok that you’re sure will kill it, you will likely fail.
If you don’t already have a product that you make, or have experience in a market, then you need to learn & do thorough market research before you launch your store in order to validate your assumptions. Google Trends plus one of the many free keyword research tools is a good place to start.
Poor User Experience
Bad experience = poor conversions, poor sales, and high bounce rate.
Many factors can contribute to a poor user experience – slow and/or unresponsive site, difficult or confusing checkout process, high shipping costs, slow product delivery, limited payment methods, or even just an ugly / poorly designed storefront (your theme, pics, logo, etc., plus how you laid it all out).
One of the best ways to understand where these friction points are is through the use of analytics, session recordings, and post-purchase surveys (we just did a feature edition of our Ecom Tipsheet newsletter on exactly this).
You can search the Shopify app store for “session recordings” or “heat maps” or “post purchase surveys”.
Low or Inadequate Profit Margins, or Inaccurate Profit Calculation
If you don’t know your true margins, your real CAC (Customer Acquisition Costs), your realistic customer LTV (Lifetime Value), you will only end up being profitable through luck.
Fortunately, there are some excellent profit analytics & calculators available in the Shopify App Store – take advantage of them!
Insufficient Traffic
Most operators assume this to be the ‘be-all’ and ‘end-all’ of profitability issues. While more traffic is almost always better than less traffic, if you don’t solve for the issues above, you are squandering what traffic you have, and limiting the impact of additional traffic you acquire.
