The eCommerce platforms enable entrepreneurs to launch custom web stores within a short amount of time. Some eCommerce solutions allow entrepreneurs to build and set up eCommerce stores without writing any code. Likewise, the robust eCommerce solutions even enable entrepreneurs to build web stores that support multiple languages, currencies, payment gateways, and shipping methods. But each retailer has to address a number of challenges to make its eCommerce store successful. In addition to handling well known challenges like marketing products, competing with large online retailers and finding the right suppliers, the retailers need to address a number of lesser known challenges in eCommerce to run the business.

7 Lesser Known Challenges in eCommerce Industry

1) Drop Shipping

Many eCommerce business owners opt for drop shipping to curtail operating cost by shipping products directly to customers from the manufacturer or distributor. The option even enables web store owners to store and manage additional inventory. But drop shipping creates a number of challenges for retailers. As the retailer do not inspect the products shipped by the manufacturer or distributor, the manufacturers or distributor get an opportunity to ship low quality or counterfeit products. Likewise, the retailers have to ensure that the drop shipper delivers the product to the customers without any delay. While opting for drop shipping, a retailer has to focus on both product quality and delivery time.

2) Inventory Management

Both large and small retailers find it difficult to maintain a balance between demand and supply of individual products. They have to avoid investing in slow-moving products, while ensuring the bestselling products do not go out-of-stock. Improper inventory management can affect the reputation and profitability of a web store in short and long runs. On the other hand, a structured inventory management strategy will help small retailers to compete with large and established web stores. The retailer must monitor and match demand-supply gap to improve customer experience and reduce unfulfilled orders.

3) Product Shipment

Most online retailers nowadays allow customers to choose from multiple shopping options. But they must address a number of challenges related to product shipment to ensure safe delivery of products. For instance, a retailer must explore ways to keep the products safe while being transported from the supplier or manufacturer to the warehouse. He needs to ensure that the products are packages in the most appropriate way to improve customer experience and prevent damages during transit. Likewise, he needs to partner with the right domestic and international courier to get the products delivered safely and reduce number of lost packages, without increasing shipping expenses.

4) Providing Prompt Customer Service

Most customers nowadays opt for web stores that provide prompt and personalized customer service. But the small retailers often lack the resources required to deploy skilled customer support executives and provide customer support 24 hours a day. But they must provide prompt customer service to prevent negative reviews and unfavourable blogs. An online retailer can always boost customer experience by interacting with customers through emails, voice chats, online forums, and social media. Likewise, he can easily improve customer experience by sending automated transaction emails. However, he needs to keep the conversations personal and responds to inquiries quickly to improve customer experience without deploying dedicated support staff. Here are some key elements to an eCommerce personalization strategy.

5) Taxes

The eCommerce websites enable retailers to sell their products to customers living in different countries. The features provided by robust eCommerce platforms further help enterprises to build eCommerce websites that support multiple languages, currencies, and payment gateways. But often web store owners find it daunting to calculate and pay local, state, and country sales taxes. The rates of local, state, and country sales taxes differ. Also, the sales tax rate for individual products varies. The retailer can avoid these challenges related to taxation, if he is selling digital products. But he must use robust software applications to calculate sales tax based on the location of the warehouse and shipping addresses of customers. Also, he needs to remit the sales tax on schedule to avoid legal problems.

6) Working with Foreign Manufacturers/Suppliers

Many retailers work with foreign manufacturing/distribution companies to reduce operating cost. They even try to save money by getting products manufactured and shipped through foreign companies. But most retailers have to address challenges related to language, work culture, and product quality while working with foreign companies. They can easily hire a translator to communicate with the foreign partners smoothly. But they have to put extra time and effort to understand the distinct business culture and assess quality of products. In addition to understanding the business culture of the foreign manufacturer or distributor, the retailer also needs to interact with the company consistently and monitor the production process consistently.

7) Consumer Frauds

Several reports show a steady rise in eCommerce consumer frauds. With more and more retailers providing cash-on-delivery options, it becomes easier for customers to execute various frauds. There are many customers to buy products through cash-on-delivery option and receive delivery of products. After receiving the delivery, they report the transaction as fraudulent. The banks further allow the customers to mark specific transactions as fraudulent. Hence, the retailer has to incur additional expenses to deal with such consumer frauds legally. The small retailers even prefer writing off loss due to consumer frauds to save both time and money. A retailer must verify customer details thoroughly before shipping products to prevent consumer frauds. Also, it must implement multi-factor verification to ensure that the order is authentic.

On the whole, retailers have to address a number of challenges to run an eCommerce store effectively. Some of these challenges are common and well known. But the retailers also need to prepare for a number of lesser know but critical challenges to make its web store successful. However, the challenges faced by individual retailer might differ according to their business models and online retail strategy. Small retailers can address some of these challenged by picking the right eCommerce platforms and implementing best practices during eCommerce application development. They also need to keep a tab on social commerce trends. Also, he can address these lesser known challenges by implementing a comprehensive eCommerce store management strategy.