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Nine out of ten start-ups in e-commerce fail within 120 days. Poor online visibility and low demand turn out to be the main issues.
Physical start-ups last longer
In the UK, 90% of e-commerce dreams go up in smoke within 120 days. Online retailers fail more often than physical stores. According to the British register of small enterprises, new stores have a 78% survival rate in their first year. So although the failure percentage is 50% after five years, only 22% don’t make it through the first year.
Why do online sellers have so much more difficulty? Online marketing might be one of the main causes of failure. Being noticed online, gaining visibility and competing with the big players are the biggest hurdles according to a British study by marketing agency Marketing Signals. The agency polled 1,253 failed online enterprises.
37% admitted to inefficient or insufficient online marketing as the cause of death, while 35% cites low online visibility as the main cause. In 35% of the cases, entrepreneurs couldn’t find a market or found it was too small for what they had to offer. Another 32% ran out of money, while 29% ran into issues with pricing and costs. 23% succumbed to competition.
