Halloween Horrors: 5 Classic eCommerce Mistakes That Can Murder a Business

Warning: If you’re easily spooked, or squeamish about classic eCommerce business mistakes then don’t read on! 

BOO. Halloween is here. 

So in the honor of the spooky season, let’s take a look at the horrors that haunt the eCommerce world. 

#1 Launching an eCommerce Business Without Sufficient Initial Capital

It’s true that starting an eCommerce business requires much less initial capital than opening a brick-and-mortar store. But you still need some!

Don’t overspend - it’s easy to run out of money before you figure out how to do it profitably.That’s why you need to make sure that you have enough funding to give yourself time to learn the ropes. 

Armed with enough initial funding, you can defeat the start-up monsters, and generate not only revenue, but also profit. 

#2 Seeking Financing Without Having Validated the Business

Testing, testing, testing. You may believe you have the best idea in the world - and like a Mad Scientist, you need to perform experiments to test and learn to see if your business is viable. This is called validating your business idea.

What does validating mean? Well in basic terms: will people buy whatever it is that you are selling? 

Validation is particularly pertinent if you are actually manufacturing your products. In this case it’s best to use crowdfunding platforms like Kickstarter to test your idea. Do people want to pay for your product? And how much are they willing to pay?

Only seek funding once you have a proven business model and know exactly how to scale it profitably. Otherwise, you may end up burdened with debt, as well as inventory that no one wants. 

#3 Mixing Personal Finances and Company Finances

So you’ve had an idea. You’ve got your first sales. It’s all terribly exciting. You probably want to get your business off the ground as soon as possible.

So it’s tempting to put off less urgent tasks such as legally establishing a company, hiring an accountant, etc. All that paperwork is enough to get totally wrapped up in. 

After all, you can just do everything with your personal bank account, then handle all that boring stuff later, right?

But if you mix personal finances and company finances, you not only risk serious legal trouble, but you also may get hit with a tax bill that will haunt your dreams long after you have paid it.

Our recommendation? Just set everything up properly from the beginning and enjoy the peace of mind. 

#4 Burning Money on Marketing Campaigns That Don't Work

Gather round the campfire, children. We’ve got a grim eCommerce horror story for you. It goes like this…

Once upon a time a business owner decides to spend a ton of money on an advert in a magazine. They didn’t get a single sale from it. And now they’re broke. And that business owner? THEY COULD BE YOU! *Screaming in terror*

This can happen with anyone and any of your business outgoings. It could be a Facebook ads campaign, a partnership with an Instagram influencer, a podcast sponsorship, inventory spending, recruitment. Oh my, this House of Horrors is neverending. 

That’s why you need to test each marketing channel with the least amount of money possible, then only scale that marketing campaign if it proves to be profitable.

#5 Not Having an Emergency Fund

Having an emergency fund - a back-up plan, a treasure map, a metaphorical (or literal) Falkor - is extremely important for eCommerce businesses.*

This is especially true as you start hiring employees, signing contracts with manufacturers, and becoming more exposed to legal risks. You don’t want all your hard work to be wiped out by one unexpected event.

*Ok, dragons probably aren’t that important for businesses. Sorry, Deborah.


Your dream of financial freedom can quickly turn into a financial nightmare if you don’t take measures to avoid these eCommerce fails.

So make sure that you:

  • Have enough money to get your business off the ground.
  • Validate your idea before seeking funding. 
  • Don’t mix personal finances and company finances.
  • Only invest in proven marketing campaigns.
  • Build an investment fund.

If you want to talk to a human being who can navigate you through the Frightening Forrest of Founder-Fails, then give Business Score a ring on 020 331 812 63. We’ll get you sorted. 

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