Top 8 Major Issues Faced by eCommerce Businesses

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Top 8 Major Issues Faced by eCommerce Businesses

Over a decade, the e-commerce industry has beheld dynamic growth. According to the recent survey by the US Census Bureau, e-commerce market share, as a percentage of all retail sales, has increased by almost 6%(approx. $5 trillion) in annual turnover.

We can say that in the age of the Internet, the eCommerce industry is the brightest star! However, this doesn’t mean all the e-commerce businesses are making huge profits as the industry that grows faster faces more challenges to attain success. Developing a company in e-commerce is hard today. You need to take care of everything from the beginning to earn long-term profits.

Here are the top 8 issues which are plaguing the eCommerce sector severely:

The Trending Artificial Intelligence –

In today’s modern business world, everyone is talking about Artificial Intelligence. It works for hand in hand to provide personalized services, helping firms build a better relationship with their customers.

For example, ASOS is a famous online shopping store offering customers to try clothes, shoes, accessories, etc., by using “selfie-mode” on their mobile. This is called “inventive shopping.” Moreover, there is one tab known as “add items,” wherein you can add clothes, which you might have seen people wearing in malls or streets. This advanced shopping provides endless opportunities for customers.

This eventually becomes challenging for other e-commerce online portals to stay ahead of the competitors like Amazon or John Lewis.

Increasing Customer Expectations-

This is not a new challenge for any online retailer as an e-commerce business. You ideally work for your customers. However, this year, customers have a new set of expectations as Amazon is providing a one-day delivery service.

The competition in the market is the next level as even Zara has opened a Click and Collect store in East London, which is blended with high-street and online fashion. Now customers can choose when and where they want their items to be delivered using their mobiles.

Thus, it is highly recommended to find critical ways to fulfill your customer’s expectations. They are centrum for any e-commerce business and are considered one of the biggest challenges.

Accounting Problems-

Accounting for a retail store has always been challenging, whether it is an online portal or a normal shop on the street. Many retailers have been surveyed, and no one ever said accounting is easy. Some retailers are not passionate about managing their books. However, some are, but they don’t have enough time. But, to compete better in this agile market, accounting and bookkeeping for retail businesses need to be streamlined efficiently.

So what should one do? Retailers are spending a lot on their accountants to organize their books. Still, some e-commerce retailers are looking for alternatives to cut their operational costs, as hiring an in-house accountant is undoubtedly a costly affair. In such scenarios, third-party vendors or firms are playing a crucial role in offering accounting services to retail/eCommerce businesses at competitive prices.

Dealing with Logistics Associates-

Whenever the customer punches an order for any product, the logistic partner with your e-commerce store gets a notification for delivering the item at the specified address.

As you are running an e-commerce retail store online, you might get an order from any state of your country or any part of the world. Thus, it would be best to deal with logistics partners based on pin code at every location. So the moment they deliver the goods, they will collect the cash and deposit the same to the E-commerce Company.

However, this process is also problematic; suppose you have around 100 logistics partners at every location and keeping track of the amount you received from your partner, settling commission of your logistic partner and the goods have been delivered on time or not, things become challenging.

So try to keep a separate team for tracking delivery proficiency and reconcile your accounts that the cash deposited is accurate or not.

Inventory Management-

One of the major challenges for every e-commerce/retail business is tracking its stockpiles, which is essential for its operational success. Therefore, managing your inventory is vital for every retail business to have lean working capital, even if you are selling your goods online. Inventory management is all about making products available at the right time and tracing the location where your products have been stored efficiently.

Suppose you are unable to keep track of your inventory or unable to make goods available at the right time to fulfill your customer demand along with financial losses. In that case, you may also face reputational losses as well.

Nonexistence of Online Identity Authentication-

When a customer inputs their information in your e-commerce website as signup, you are unaware of the customer’s details. So the customer is genuine or not is doubtful. This may create substantial revenue losses for your e-commerce business if the customer orders the product with an invalid address or phone that too at COD (Cash-on-delivery).

So make sure you verify the customer’s identity by detecting fake phone numbers or email addresses. You can keep them sending messages related to recent offers. During signup, you can keep the criteria of One-time-password (OTP) wherein for confirming their sign up, they need to input the code they receive at their registered number. You can also check the zip code they have entered according to state/city.

Issues of Data Security-

 Security issues over the web are frightening for many businesses. Many fraudsters or hackers are posting spam to hack all the data of your customers by attacking web host services and infecting your portal with dangerous viruses. As a result, they can quickly access your confidential customer details, including phone numbers, credit/debit card details, etc.

Hence, it is advisable to manage your servers solely and avoid FTP transfer files. The FTP transfers are susceptible to theft as any developer who copies a file in an open Wi-Fi network can lose passwords and confidential data to fraudsters. So constantly upgrading your e-commerce portal will reduce the chances of a data thief. Furthermore, many content managers store their data in the database; thus, ask your developers to take the backups regularly and recover the data if embezzled.

Introduction to GDPR-

GDPR is an abbreviation introduced by the EU that may give heart attacks to any organization. The General Data Protection Regulation is initiated to redefine how brands communicate with their consumers, and it raises significant penalties and sanctions if they find your organization is guilty.

However, it has become effective on 25th May 2018, so the organization needs to prepare themselves and strictly adhere to their guidelines to save your business from any penalties. Furthermore, the e-commerce business entirely drives on data. Thus, it is advisable to go through the norms by GDPR and implement the same in your E-commerce firm.


The predicted trajectory for e-commerce businesses is for constant growth and success, but to ride this wave, you need first to overcome the navigated challenges in your way.

Author Bio – Eliza Davies holds seven years of experience as a Business Development Manager at Cogneesol, an outsourcing firm that is offering accounting and bookkeeping for retail businesses globally. She helps retailers achieve their goals by advising them on every aspect of accounting. Eliza specializes in retail/e-commerce, finance and accounting, small business growth, entrepreneurship, branding, and marketing and is passionate about helping startups and small businesses plan and grow their money.

Top 8 Major Issues Faced by eCommerce Businesses