90% of e-commerce startups fail in first 120 days

The vast majority of e-commerce startups fail within their first 120 days of operation, new research has revealed.

A survey of 1,253 owners of startups in the UK, carried out by digital agency Marketingsignals, found that 37 per cent said that their failure could be attributed to an inability to compete or deliver online marketing, with 35 per cent saying a lack of online visibility was the main factor.

The same proportion of respondents (35 per cent) felt failure was down to them being too small to compete or there being no market for their products/services, whilst 32 per cent reported that it was due to them running out of cash.

When further quizzed on the reasons why online retailers failed, 23 per cent said that it was due to being outcompeted, whilst 19 per cent blamed retail giants such as Amazon for dominating a large share of the consumer online retail market.

A further 16 per cent felt that their business collapsed due to their lack of customer service, whilst 14 per cent felt it was due to the poor team they had built.

Gareth Hoyle, managing director at Marketingsignals, commented: “It’s clear to see that having an online presence and being visible on search engines is a key area e-commerce startups need to focus on to ensure they succeed.

“As nine in ten online startups fail within their first 120 days of businesses, it’s incredibly important that business owners put provisions firmly in place well before launching - this must include a bulletproof search visibility and online marketing strategy, as well as ensuring there is a market for their product offering.”

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