There is no doubt that the E-commerce industry is growing at an alarming rate. If you pick up any reliable studies that have been done over the past few years, you can see that the growth has been aggressive.
However, with newer opportunities, there are newer challenges that these businesses have to contend with.
In recent years, increasing competition, extra legalities, an informed digital audience, etc. have all created hurdles. While bigger E-commerce businesses with their resources have been able to get a handle on things, smaller ones have suffered from overstretched resources.
In this article, we look at five of the top challenges E-commerce businesses are facing in 2021. If you are an entrepreneur that is into E-commerce, be sure to stick around till the end of the article.
List of 5 Challenges E-commerce Businesses are facing
1. Taxation and Legal Paperwork Issues
According to TaxConnex, E-commerce businesses need to follow a whole list of legal paperwork to ensure compliance. This means staying on top of everything from Nexus Laws to the various permits, licenses, and approvals that are to be taken from federal and state bodies.
As the business grows and stretches over to different states, all the paperwork and taxes must be submitted on time. If an E-commerce business is not able to do the same, it can face cancellation of licenses and hefty fines levied on it by the authorities.
2. Increased scope of Cybersecurity in 2021
Studies reveal that E-commerce businesses are more susceptible to online attacks from cybercriminals. This has increased after the pandemic when more and more people are turning to E-commerce platforms for buying both essential and non-essential items.
Most business experts reveal that online platforms need to strengthen up their security systems and data servers to ensure that they do not come under attack. E-commerce businesses store a host of their customer’s financial data. This is why need to be extra sure of the security.
3. Appealing to an Informed and Aware Digital Consumer
There is a lot of competition in the E-commerce ecosystem. The digital consumer is now more aware than ever. They are ready to do background research on every product or service that they are looking to get from a brand. Appealing to such an aware consumer has its challenges.
For starters, you need to build a credible and authentic brand. This means investing in your E-commerce website and supporting the same with a strong social media presence. It also involves engagement with the consumer through aggressive CRM at all times.
4. Focus on Improving Supply and Logistics
As a consumer, we do not want to wait till eternity after ordering our products and making payments right away. This means that supply and logistics play a very important role in making an E-commerce brand successful. Focussing on the same helps improve levels of service.
E-commerce business needs to work on its Inventory Management, ERP Systems, and Delivery Partners if you have inter-state operations. This helps in creating the perfect logistics ecosystem that keeps track of everything from what is in the warehouse to how fast the customer is receiving an order.
5. Return, Refund, and Payment Policies
The last, but by no means the least challenge comes in the area of returns, refunds, and payment policies. E-commerce business aims to create the best possible user experience for its consumers. This means ensuring that the returns are done timely and without complications.
Working with a good financial payments company ensures that the payment gateways, policies, holding accounts, and other aspects are taken care of in the best possible fashion. Once you can satisfy the customer in terms of these, your E-commerce business will be a success.
The Bottom Line
Whenever something becomes big, it attracts problems, complications, and challenges. As an E-commerce entrepreneur, you need to be on your toes to ensure that your business does not suffer because of the above-mentioned challenges. If you would like us to help with any more issues, please drop your queries in the comments section below.
