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Why a Lot of Amazon Businesses Fail

May 22, 2020 | Business

Amazon is the biggest eCommerce platform in the world. With a lot of factors to consider, it is no surprise to see Amazon businesses fail.

Top Reasons why Amazon Businesses Fail

It’s the preferred platform of many entrepreneurs. Even though there are countless sellers who can attest to eCommerce as a fundamental factor in their increased profit, many still fail to operate their businesses successfully.

A large fraction of eCommerce business failures consists of micro-businesses. Owners of these businesses are usually forced to face a disheartening predicament once they realise that their company isn’t earning as much as it should.

But why exactly do businesses fail despite the accessibility of eCommerce platforms? Read on to find out.

Amazon Businesses Fail
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Low Competition

The biggest challenge for a business is competition. With so many other companies selling the same products and offering the same services, it can be difficult for you to stand out. One solution to this is to expand your services and market your products in Europe.

Amazon is available to 250 million people in five of the biggest European countries alone.

This makes Europe an ideal place to market your products because not only is it home to a growing population, but Europe is also only seeking services from 200,000 sellers. It is a significantly small portion of the total number of sellers worldwide — which is estimated to be around 2 million.

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Most entrepreneurs shy away from expanding to Europe as they think that sticking to the Western market is a better option. Since the United States and the rest of North America are bigger countries, many believe that it’s home to a greater population — which they believe can help them sell their goods more successfully.

However, companies who expand their business in Europe are proven to be thriving more in terms of profit compared to those who remain to sell in the US and its neighbouring countries. 

One thing that needs to be considered before expanding to Europe is the cultural difference between the US and the European market. Customers and their expectations and terminologies vary from one country to another. There are minor differences in the language and traditions that should be addressed.

If you plan to sell sneakers in the UK, labeling them as ‘’trainers” would be more suitable as it’s the common and more recognised term – these small details have a significant effect on the sale of products.

Customer Service

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It may seem unimportant to many business owners, but customer service can significantly grow your brand in many ways.

Even if you are selling a unique or excellent product, there are still instances where some of the customers will face a problem regarding it – and it’s the responsibility of your customer support to get those issues resolved efficiently; because of the lack of customer support can tremendously affect your reputation.

Poor customer service can get you negative reviews. The Amazon algorithm is prompted when it receives weak feedback regarding your products, which can result in the platform stopping the promotion of your listings – this is detrimental in terms of being ranked organically, or defeating the PPC competition.

If your product is not listed on Amazon organically, it will never show up in the searches made by customers for a similar product. Therefore, the chances of your product getting sold decreases instantly.

Product Reviews

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It is evident that many failed businesses on Amazon have poor ratings given to them by customers. Customer feedback is paramount to your business because over 90% of people buying on Amazon wouldn’t purchase an item with less than a three-star rating.

Having great customer service gets you an immense amount of excellent feedback which can positively impact on your sales. This can result in Amazon promoting and prioritizing your products which can get you more views.

Statistics show that the buyers are more interested in spending on a product that comes on the first page of their search than the others.

Every entrepreneur aspires to own a successful industry. With the availability and accessibility of selling on Amazon and other eCommerce platforms, it’s vital that you provide your customers with a convenient way to know more about your products. Because providing this type of service can give you positive reviews in return.

In Conclusion

While it may seem like a daunting task to answer every inquiry from everyone, companies like Sterlinx have found a solution that can aid in the improvement of your customer service.

Sterlinx can help your business grow as an eCommerce seller because they provide your business with its own virtual call centre. Check Sterlinx Global to get all the best solutions to help you grow your business. Your virtual call centre can answer phone calls and respond to emails sent to you by your customers. You no longer have to check them one by one just to make sure that you will receive great feedback – because Sterlinx ensures that you do.

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