What’s holding brands back from investing in eCommerce?

As e-commerce is growing faster, many businesses are connecting to it. But despite its growth, brands hesitate to invest in online platforms.

You must be wondering why. This is because of the complexity of the e-commerce platform and its high cost. Also, many small brands might be worried about competition with big brands such as Amazon.

If you are one of the small companies, you can partner with an e-commerce SEO company. They can offer you much expertise in driving traffic and online visibility, allowing you to attract many customers.

Now, let us know what the key barriers are to e-commerce investment.

Key Barriers to eCommerce Investment

Cost Concerns

One of the main reasons brands do not invest in e-commerce is the high maintenance cost as developing an online website requires significant investment in website design, user experience, and a secure payment system. All this makes the brands feel that the online presence is highly costly, and they invest their profit in it.

Furthermore, other elements such as hosting, software updates, digital marketing, and cyber security contribute to a greater financial burden. You may also worry about the return on investment (ROI) since the benefits of eCommerce can take time to materialize.

So, if you are one of the brands hesitating for e-commerce investment, you can opt for an e-commerce business plan from any agency. This can help you understand the online business strategy and get many benefits under your budget. 

Order and Inventory Management

Order and inventory management are other reasons the brand hesitates to invest in e-commerce. Many individuals do not understand the concept of online order and inventory; this leads the brands to deal with their business offline.

Image Source- SOS Inventory

To solve this issue, you should use an advanced e-commerce platform that automatically updates inventory levels in multiple channels. This not only handles the order but also helps in making secure payments.

Here are some points that can let you know why automatic order and inventory management are important:

• Reduces Human Error: With traditional order and inventory management, you can face human issues such as pricing, data entry, packing the wrong product, etc. But with the help of an advanced setup, you can reduce all these human errors, allowing your customers to place trust in you.
• Improves Stock Accuracy: Real-time updates help maintain accurate stock levels, preventing issues like overselling or stockouts, which can lead to customer dissatisfaction.
• Saves Time and Cost: When AI or another module handles your online business, you need not worry about the cost and extra time. It can help you by replying to customers fast with accurate knowledge. Also, eliminating an extra team for management can save a lot of money for further business investment.

Unauthorized Sellers and Distributors

Unauthorized sellers and distributions are also a big problem for brands. These sellers offer their prices at lower rates, which can confuse customers about the product’s value. This affects the brand reputation, and many brands do not invest in e-commerce businesses.

According to recent insights, unauthorized sales in online marketplaces like Amazon account for 35% of online purchases, intensifying the issue.

On a technical level, unauthorized sellers may take advantage of gaps in eCommerce platforms to sell products without following the same quality standards as official distributors. This lack of control on the sellers can lead to poor quality of goods and services. Even if they do not offer good customer service, the customer’s trust is reduced.

Integrating with New Channels

Integrating new sales channels is another big issue preventing brands from investing in e-commerce. As online shopping is increasing in the market trends, brands are selling their products and services on various platforms such as websites, Instagram, WhatsApp, and many third-party apps. This makes handling data and management very hectic due to the different rules and regulations of the platforms.

The main challenge is that the brands feel very hectic handling different platforms’ orders and payment methods. This degrades their ability to invest in e-commerce businesses.

Technology Integration Challenges

The recent development of technology is the main challenge for the brands to invest in e-commerce. Many brands have old and outdated software and setup to handle the business. So, the latest and updated technology, such as data integration, stock listing, payment management, and customer relationship management, makes e-commerce business management very complex.

In addition, integrating with new technologies requires a budget to install the latest hardware and software and a well-trained team to handle all the business data. The main investment is in security, which handles all personal customer data and files.

Image Souce- FasterCapital

Lack of Resources

For any brand, lack of resources is the biggest barrier to fully investing in e-commerce. Maintaining and running an online store needs more than money. It needs time, value, resources, well-trained staff, and knowledge of the latest technologies. Smaller businesses or traditional store owners find this hard to handle, and as a last step, leave the plan for building online businesses.

Further, many brands lack the internal expertise to effectively manage complex digital marketing strategies, SEO practices, and social media engagement.

Bad Shipping Makes for Bad Shopping

Shipping logistics plays a main role in building a business and brand. Due to a lack of this, you can face a negative business reputation. As the online marketing industry expands, the market becomes more competitive. So, many customers want free, fast, and fair shipping of their ordered products.

According to SEMrush, 66% of online shoppers consider fast and reliable shipping as a major factor in their purchase decision.

So, many brands are stepping back from moving from traditional stores to online due to the lack of fast and fair shipping. Also, due to the large brand names in the market, such as Amazon and eBay, brands hesitate to invest in e-commerce, as both companies offer fast deliveries.

Increasing Competition

The online market is rising rapidly with increased competition. Due to the big companies such as Amazon, eBay, and Walmart, small brands face many problems in making customers. Competing with large brands needs much patience and money to invest.  On top of that, the rise of direct-to-consumer (DTC) models, where manufacturers bypass intermediaries and sell directly to consumers, adds additional pressure by cutting into margins.

So, if you are thinking of investing in e-commerce, then be sure to get support and an online business strategy from e-commerce business agencies. They can help you know the exact trends and conditions of the market, allowing you to implement the strategies accordingly.

Conclusion,

Even though online business is essential for organizational growth, many factors stop brands from investing in online business. These are the latest technological emergence, increased competition, technology-integrated different platforms, unauthorized sellers and retailers, and many more.

According to the study by SEMrush, over 30% of small businesses cite high initial costs as a primary reason for delaying their eCommerce investment.

The solution to the problem is to invest in an e-commerce business agency that can help you enhance your online business easily. They can also help you build a strategic plan for better running businesses and making new businesses.

FAQs:

• What is the ROI (Return on Investment) in eCommerce? 

ROI in business measures the profit a business has earned compared to its invested money. It helps you to know that the business is paying you well after the investment.

A positive ROI means that you have earned more than your investment in your business. The investment is mostly made on website development, marketing, and shipping. You can calculate ROI by comparing sales and total costs.

• Why should you consider investing in eCommerce?

When you invest in e-commerce, you can easily reach new customers in less time. As more people have access to online shops, you can enhance your brand in a short period, allowing you to reach globally.