Avoid Ecommerce Mistakes That Can Turn Your Profits To Loss


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An eCommerce store can be one the most lucrative ventures you can undertake.

It can also lead to one of the most egregious, darkest and most dangerous situations in your life when it comes down to your profits.

You can make mistakes that will rob you of all your profits. This will leave you scratching your heads and considering giving up.

These are some of the mistakes you might be making if you have been having trouble maintaining a consistent profit from month to month.

You can still overcome each of these errors.

Here are the most common eCommerce errors that could cost you your profits.

1. Do not rush your business math

As an ecommerce business owner, math skills are essential.

Business math is easy.

This formula can be used to calculate your potential business profit: Potential profit = Demand + Revenue + Expenses

Through platforms such as Shopify, you can also see your weekly profit margins:

Knowing your profit margins will help you predict what’s going to happen over the next few weeks.

Let’s suppose that 10,000 people visited your website last week and that 2 percent converted into paying customers. You made 200 sales at that rate. If your average order value was $100 and your net profit margin at 25 percent, then you have made $5,000.

There are many factors that can influence what happens in your business this week and last week. You can track these metrics over time to get a good sense of the trends and plan accordingly.

Calculating your expected profit will give you a clear picture of how financially successful you are. This will help you to plan the next steps in your business growth.

If you don’t have a good grasp of your numbers, you could lose your profits and end up in the gutters. To ensure that your profit margins are not cut, make sure you include overhead costs such as shipping and returns when calculating the price of your products.

Here are some things you can do to reach your online sales goals.

  • Your revenue goal. Your revenue goal is yours to set. Let’s not forget a simple formula. Let’s assume that the annual revenue you desire to make is $100,000.
  • Calculate your order count. Divide your revenue goal with the average order value. Let’s take $20.00 as an example. This will allow you to calculate how many orders you’ll need over the course of the year. This is how it will look:

(Goal $100,000) / (AOV $20 = 5,000) (Order/year estimates at 11 per day during the year.

  • Calculate the number of visitors. We will use “solve forx” to find the required number of visitors to reach this sales level (brings back fond memories from algebra class, right?). The formula for a 2 percent conversion rate will be:

(Number Of Visitors) “X” (Conversion Rate). 2% = 5,000

Now we can solve for “X”. Don’t get discouraged. Although it is not easy, it is not difficult. Plus, this will make your ecommerce business much more profitable.

Next, divide the conversion rate by the number of orders.

X = 1 (since 2%/2% equals 1) = 250,000 (number visitors)

Assuming your conversion rates don’t change significantly, your total visitors for the year should reach 250,000 if your goal is to achieve your revenue goal. This formula will help you identify metrics and other aspects that need to be improved in order to reach your goal and increase your revenue.

This formula will help you gain a better understanding about your business and determine if you are heading in the right direction.

2. Fraudulent Purchases and Product Returns

Fraudulent purchases and product returns are another area where profits can be lost. eCommerce stores are more vulnerable to fraudulent product returns than brick-and-mortar counterparts.

You can reduce the amount of product returns by making sure your descriptions, images, videos, and descriptions are as clear and complete as possible. If the customer is still unsure about what they’re getting, you can revisit your descriptions, images and/or videos to clarify.

You need some type of order monitoring system to prevent fraudulent purchases. This will be either built into the eCommerce platform or available as an add-on/plugin. A shipping restriction will most likely protect you against fraudulent purchases.

You can limit the processing and shipping of orders based on your settings. For example, orders that exceed a certain amount or come from certain countries and people. You can’t resell a returned product, and you also lose the product’s value.

You can get a plugin by Etoile Web Design to monitor your orders.

It allows you to modify the status of orders, projects and other items, notify customers via email about order updates, and select which status information to display.

A fraudulent purchase can completely ruin your profits for the week or month depending on the amount of the purchase. These are two things that can completely destroy your profits.

3. Not Understanding Your Target Audience

Your eCommerce store’s marketing campaigns are another area that can cause problems. You don’t really understand your target audience if you just throw darts at the wall and hope to hit it.

This is a dangerous and expensive practice!

Facebook’s Audience Insights can help you understand your target audience.

This section will provide you with a wealth of information about your audience that will allow you to laser-focus your marketing campaigns.

Advertising campaigns that are expensive can quickly drain your marketing budget and leave you scratching your heads. If you don’t take care, you could end up throwing even more money at a problem that isn’t really your problem.

You can stop the bleeding by taking the time to get to know your audience and tailoring your advertising campaigns to them.

4. Fixed Shipping Costs and Using the Wrong Packaging

This area is often overlooked. You would think that shipping costs and packaging materials are part of the business cost. Wrong!

There will always be costs when shipping any product. However, there are areas where you can reduce these overhead costs.

Stop using $7.99 fixed shipping options. This works well for a widget that costs $2.99 to ship but could be disastrous if someone orders 100 widgets. Shipping costs are now significantly higher than $7.99, so you’re losing money. To add more features to your checkout, Magento 2 users may be interested in shipping rules extension and multi-flat shipping rates extension. These modules will help you save time, increase efficiency, and reduce costs.

Using the wrong packaging can lead to multiple costs. Shipping costs can rise if you ship the product in a larger box. To keep your product safe, you will need to use more protection material. You’ll need to use more tape to secure the product.

It’s easy for fixed shipping to cost you more than improper packaging. Fixed shipping options can make it easier for customers to estimate their final costs, but it can also cost you. You can also lose money on packaging materials. You need to find a way that you can use the smallest packaging options while maintaining product safety in transit.

These two areas can be fixed immediately to improve your bottom line.

5. Make the wrong investments

You can lose your money by investing in the wrong things at the wrong times.

While it’s okay to invest in software, marketing, or employees for your ecommerce company, you must ensure that you are acquiring the right asset at a suitable time.

Consider, for example, whether banner advertising, Facebook ads or Google search ads are the best ways to promote your product given the current situation of your ecommerce shop. Is it really necessary to buy the most recent model of a laptop, or digital camera, in order to run your business?

Even if you answer the question “yes”, you should still consider how much you can budget for it. Otherwise, you will only end up overspending and ruining your business.

Use online budget tools such as Omni Calculator to determine if you have the budget for additional investments.

This tool allows you to enter your income and expenses. You can then decide how much you spend.

To maintain the health of your business, it is important to plan and balance what, when and how much you will invest. This should be your top priority.

6. Inconsistent Ecommerce Branding

Many ecommerce store owners make the error of selling products and choosing domain names that are inconsistent with each other.

Make sure your brand is representative of what you sell now and what you could possibly sell in the future.

The example of Eco-bags USA is a product and geographic description. It might be confusing for your target audience if you plan to sell other products or in different locations.

Be aware that confusing or inconsistent brands can easily alienate segments of your audience. This can have a negative impact on your bottom line.

Take what you have learned from these stores about brand consistency and use it to improve your ecommerce.

7. Choose the Wrong Platform

Many people rush into eCommerce without doing enough research on the various platforms. It can be very costly for them. You can lose a lot of customers and your profits by choosing the wrong platform. Headless is the future of eCommerce platforms.

Many eCommerce businesses are switching to “disconnected” CMS solutions such as headless eCommerce systems. These systems rely on APIs and cross-channel integrations to implement changes in environments that are isolated from all aspects of your product line, inventory and sales.

Headless commerce offers the advantage of making changes to your website without affecting its business infrastructure.

Websites such as Amazon and Netflix rely on headless solutions at a huge level . Amazon pushes new code changes approximately every 11.7 seconds, while Netflix releases thousands of coding modifications each day.

You can make changes to your content infrastructure without affecting the functionality or accessibility of your website. This makes it easier for customers to have issues fixed and allows you to customize user experiences more efficiently.

8. Underestimating the power of user experience

Ecommerce stores often have complicated storefronts and expect lots of orders to just pour in. They blame shoppers if these orders don’t come in or believe that ecommerce isn’t working.

Both are incorrect. UX is essential for generating sales when operating an ecommerce store. As an example, take your navigation online store. This will show you how important UX is to prevent store abandonment. You may find some great tools to help improve the UX.

Today’s empowered shoppers expect a seamless and painless shopping experience on websites. They won’t buy if they can’t find the product they need or the information they want.

You can’t expect your shoppers to spend more than a few minutes on your website to find the information they need.

Keep this in mind: Shoppers’ expectations will be determined by their buying experience at more established and reputable ecommerce shops around the world.

9. We are grateful for customer feedback

Your customers’ feedback can make or break your ecommerce store.

Reviews and customer feedback not only help customers decide whether they trust your products but also help you to refine or change your strategies. This helps you assess if your products are efficient and effective, as well as what aspects of your ecommerce store you need to change or improve.

Online stores offer incentives to customers who leave reviews by giving away free samples, gifting or rewarding them with gifts. Whatever method you choose, ensure you have a system of review reminders that you can send to customers after each purchase.

For example, if your customers complain about product delivery delays, it is high time to sign up for a more efficient shipping service provider.

A different note: If your packages are delivered on time, it is possible to keep your agreement with your provider and improve other aspects of your online business.

You can get feedback from customers by adding your store’s contact information and messaging apps to your website. Your profit situation can be greatly improved by their input.


These mistakes can all be fixed or prevented, as you can see.

You must:

  • Be aware of your overhead costs (packaging and shipping, returns, fraud purchases).
  • You must ensure that you use the correct eCommerce platform.
  • Learn what your customers want.
  • Do not match the price of your competitors.

Avoid these common mistakes and you will be able to easily recover your lost profits.

If you don’t make any money, an eCommerce store won’t be worth the effort.

You didn’t start your eCommerce store because you enjoyed wasting your time. Instead, you did it to make money and secure your financial freedom. These costly mistakes shouldn’t be made.

About the author

Kobe Digital is a unified team of performance marketing, design, and video production experts. Our mastery of these disciplines is what makes us effective. Our ability to integrate them seamlessly is what makes us unique.