Problems faced by a Retailer Starting an Online Business


With the growing emergence of online retail business, most of the retailers have started their online business to grow their networks in the market. But there are various problems faced by the retailer starting an online business.


The following are the 7 significant problems faced by an online retailer starting an online business:


  1. Price competition and shipping terms:

    there is a heavy competition over the online platform with a numerous number of retailers selling the same good. Thus, to get better sales on the online platform, a retailer has to make proper pricing strategies along with keeping the competitors price, margin concerns in mind. After a certain extent, pricing strategy does not help a retailer to sell his products effectively. Thus a retailer has to make appropriate strategies over shipping concerns like a retailer can provide free shipping on his products for better marketing and preferences by the customers for the goods. Selling online brings up the cost of the seller as various extra charges are charged by the online selling platform. Thus, these pricing and shipping strategies are important and very difficult to be analysed by the retailer.

  2. Increasing cost:

    while adding your products on an online platform, a retailer might find an increased cost issue. Each and every factor in the online selling requires a cost. While shipping as mentioned in the previous point, sellers use the free shipping strategy to gain more attention of the consumers. Thus there are shipping charges incurred. To upload a product online, the business requires a professional photography which again leads to cost. Maintaining social media platforms and advertising is another factor that again leads to high costs. You might create your own website. Creating a website requires professionals, especially for designing and maintenance purposes, leading to high cost. To maintain a high SEO, the retailer has to again incur some amount of cost. With all these factors mentioned, the overall cost is increased. Thus it becomes difficult for the retailer to initially bear these costs and make appropriate policies to control them and adjust them in their profit margins.

  3. Heavy competition with the manufacturers and distributors:

    the online retailers face a heavy competition in this sector because online selling removes the place hindrances and thus the manufacturers and distributors try to sell their goods directly to the consumers using the online platform. Thus this strategy of the distributors and manufacturers put the retailers to great difficulties while starting an online business

  4. Social media marketing:

    social media platform is the most emerging tool in the industry to promote a company’s goods and services. A small retailer tries to use the same platform due to a vast availability of target market on these sites. A retailer is in difficulty as he needs to create a marketing platform to create awareness about his products. A retailer might find it difficult to manage the social media channel and compete with it. A retailer needs to be available all the time over the social media to show his presence along with posting various availabilities of products with him, etc. that creates difficulties.

  5. Consumer satisfaction:

    consumer satisfaction is the most difficult task for a retailer starting his online business. This is because, during his local business working, there was a direct contact of the retailer with his customers. But in the case of online selling, there is no direct contact between the seller and the buyer which makes it difficult to create loyalty among the consumers. Thus a retailer has to make a strategy which is different from its competitors and ensures maximum consumer satisfaction. Consumer satisfaction is an important marketing term in a business as a consumer is considered as the kingpin of the business. It is vital to create and retain consumers. A business finds it difficult to create a new customer rather than retaining the existing consumer. To ensure there is no negative word spread by the consumer about the online retailer, extraordinary measures need to be taken to create satisfaction and consumer loyalty. Being an online business, a retailer might find it difficult to maintain the consumer.

  6. Increased competition:

    when the retailer had sold offline, in his local area, there was not much of competition. He had a consumer satisfaction and loyalty of consumers of that particular area that ensured him his sales. But when a retailer sells his goods and services online, he finds a wide reach of consumers in the market i.e., he is no more concentrated only on the local area. With the increased reach in the market, there is an increased competition. The retailer will find many more retailers selling the same good that he is selling. Thus a retailer when starting his business online has to make strategies to survive in the market and success in the competition. With the increasing competition on the online platform, a retailer might find it difficult to establish his business online.

  7. Content creation:

    during the offline selling work, a retailer did not have to create content for his business. But with establishment of his online selling business, he needs to create content due to lack of personal communication with each and every consumer. As there is a lack of personal communication and reach to the consumer, a retailer has to explain about his product that he sells through a written content. Initially, the retailer might find it difficult to explain about his product in write ups. There is no communication of face reactions and thus becomes difficult for the consumer as well as the retailer to know each other’s reactions. Hence he might find content writing work to be difficult enough.

With these changes that a retailer experiences while establishing his business online, he might find the above factors to be problematic enough. A sudden increase in competition on the online platform along with the lack of direct communication and pricing strategies, a retailer might find it difficult initially while setting his business online.