Common Mistakes New Online Store Owners Make That Prevent Them From Ever Being Profitable

After answering questions and critiquing online stores for over 4 years on this blog and running an online store course for the past year, I’ve noticed many common patterns and mistakes that new shop owners repeatedly make. And the funny thing is that most of these mistakes are crucial things that people often take for granted or don’t consider carefully.

In fact, most newbies that email me with their questions are obsessed with starting a website.

They are worried that they won’t be able to figure out how to launch their store.

They are worried that it will require too much technical expertise to start an online business.

They are worried that it will cost too much to design a website.

What’s ironic is that starting your website is probably the easiest task of all. With fully hosted shopping cart solutions like Big Commerce and Volusion, anyone can start a website without any technical experience whatsoever. And if you are on a budget or want more control over your website, there are many free open source options available as well.

The reality is that most new online store entrepreneurs shoot themselves in the foot long before they make it to designing their website. In fact, there are a lot of little traps along the way that can slow you down or prevent your business from ever making a profit.

Mistake #1: Choosing A Niche That Is Too Competitive

When I first launched my course on how to create a profitable online store, almost 70% of my students wanted to either sell t-shirts, baby clothing, or wedding favors. But you know what? Those markets are extremely broad and ultra competitive.

Do you know how many stores out there sell t-shirts? Tens of thousands. The same is true with baby clothing and wedding favors. The biggest mistake I see that most students make is that they choose a market that is way too competitive. And the problem with choosing a competitive market is that…

  • You’ll probably never rank in the search engines for your targeted keywords
  • You’ll have problems standing out among the crowd of similar stores
  • You’ll be subject to price erosion as your competitors try to undercut you in price.


There is a fine line when it comes to choosing the right niche to pursue. If you pick a niche that is too narrow, there won’t be enough customers. If you pick a niche that is too broad, you’ll have too much competition.

Ideally, you want to pick a product or set of products that isn’t readily found in brick and mortar stores and doesn’t have a lot of online competition. And most importantly, you want to find a product that has enough demand for you to make a decent profit that meets your income goals.

I’ve seen it time and time again. Most people pick a niche that they are passionate about without taking into consideration the potential profit numbers and the chances of converting a sale. And more often than not, these entrepreneurs struggle to find customers and rarely make any money.

Mistake #2: Finding Vendors In The Wrong Places

Most people have no clue where to find products to sell online. The Internet is a horrible place to find vendors to buy your products from because there are so many scammers out there. In fact, if you do a search for the term “wholesale”, you’ll get a ton of hits full of middlemen and people out there to rip you off.

The reason the Internet is a horrible place to find vendors is because most legit distributors don’t advertise online. Most real distributors focus on real businesses and do not want to be bombarded with inquiries from people who are not serious about owning a business.

Just as an example, our online store is constantly bombarded by “wholesale” requests from many of our customers and it’s very difficult to separate out the serious customers from the riff raff. We don’t sell wholesale at our shop, but if we did we’d probably lie low and be extremely selective about who we work with.

The fact is that many new shop owners find their vendors online and expect to pay the lowest prices for their goods. But in reality, they are buying products from middlemen who in turn buy directly from the distributor and mark up the price dramatically.

Mistake #3: Not Having A Marketing Plan

If you’ve picked the wrong niche or if your products cost too much to make a decent profit, your store could be dead on arrival. But even if you do get everything right, you still need a plan to get customers in the door.

Getting traffic to your website is extremely crucial to the success of your business. But you’d be surprised by how many people brush marketing off entirely and decide to “wing it” once they launch.

You can’t launch a profitable store unless you have a traffic strategy in place. It doesn’t matter if you’ve found the perfect niche or the perfect product, if no one can find your store then you are in big trouble.

Mistake #4: Not Optimizing For Search

Throughout the life of your online store, you will probably get a lot of customers through the search engines. Even if you target extremely competitive keyword terms, your shop is bound to rank for at least a few long tail keyword phrases if you do things correctly. But you have to setup your website properly.

Overall, your ability to rank in the search engines is based entirely on how well you optimize your site for the search engines and your ability to build backlinks back to your site. Practically every online store that I’ve ever critiqued has had some major search engine optimization problems.

If you don’t know what you are doing in this department, you could be throwing away large volumes of highly targeted free traffic.

Mistake #5: Not Having A Unique Value Proposition

Even if you get a customer to visit your online store, you still have to get them to whip out their credit card and make a purchase. And in order to do so, you have to convince them that your shop is the best! I can’t tell you how many online stores that I’ve looked at that completely blend in with the rest.

Within the first 5 seconds, a customer should know exactly what makes your store special. If they can’t, then they’ll either leave or instantly categorize your products as a commodity. And you know what happens when your products become commodities? Your customer will most likely base their purchasing decision solely on price.

If you are going to launch an online store, make sure that you have a hook or something that makes you stand out. If you can’t think of anything, then don’t even bother starting your business.

Mistake #6: Not Optimizing Your Website For Conversions

Even if you’re doing everything else correctly and you’re driving traffic to your website, it does you no good unless your site is optimized for conversions. Here are a few deal breakers that can prevent customers from making a purchase on your online store.

  • Your website is too slow – Statistics show that customers are much more likely to leave your site if the loading time exceeds 4 seconds.
  • You have no clear call to actions – Every page on your site should have a clear goal. Customers need to be herded along like cattle, otherwise they may wander away
  • Your website lacks credibility – Does your website come across as amateurish? Are you missing pieces of key information that customers look for in a site? Does your website have social proof?

There are many ways to screw up the design of your website even if your shopping cart is fully functional.

Do You Want To Learn?

Create  A Profitable Online StoreAs you can probably tell, there are many ways to shoot yourself in the foot when you first start your online store.

And the question you have to ask yourself is whether you can afford to make all of these mistakes.

What if you could magically learn about all the potential pitfalls with starting an online store before you even begin?

If you want to avoid the stumbling and the painstaking setbacks, you should sign up for my full blown course on how to create a profitable online store.

My course offers over 35+ hours of video and includes live office hours where you can ask me questions directly over the phone or chat.

If you want to learn everything there is to know about ecommerce, be sure to check it out!

Ready To Get Serious About Starting An Online Business?


If you are really considering starting your own online business, then you have to check out my free mini course on How To Create A Niche Online Store In 5 Easy Steps.

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20 thoughts on “Common Mistakes New Online Store Owners Make That Prevent Them From Ever Being Profitable”

  1. matt says:

    hmmm point 4… any more in depth detail on this?

    1. Title tags, links within your site, etc.

      1. matt says:

        whoops i meant five

    2. Go to my search bar and type in search engine optimization. There should be a few articles about on site SEO

  2. Christopher C says:

    I consult with a lot of clients about their marketing strategy and the most important problem I come across is a lack of differentiation between competitors. So out of the list above, I’d say that mistake #5 above is the most common in my experience.

    1. What I’ve found is that most people simply launch their store because they want to sell a certain item without taking into account the competition. As a result, they tend to ignore their value proposition entirely.

      1. matt says:

        okays whats your VP for yoursite…

  3. With regards to Mistake #2, it’s so tempting to find vendors online because that’s easiest! I’ll admit, I did search online for vendors at first, but quickly learned that was not the way to go.

  4. Hmm…I have a feeling that I got most of these mistakes down…but not sure which ones. Maybe the most I can think of are two things: One looking amature-like. Two, maybe sounding like the others but I do think that there are more mistakes then I realize. But with my low income, its hard to make it look pro and amature-ish. I can’t even afford food without the bills in the way to even come close for a normal income for two weeks. maybe I need major help to get started eh, or maybe I need guidence of what I should put in my store.

    1. Hi Anthony,

      It doesn’t take a lot of money to make your website look good. If you use wordpress, you can make your website look pretty professional at almost no cost. You may have to buy a template for 30-50 dollars but that’s all it takes. You can learn to do the rest yourself. I have a health coaching website that I created on my own with wordpress. I am not very techie and have no web design background but I was able to put together a decent looking site. http://www.nurseyourhealth.com

      So I would encourage you to play around with wordpress and go for it!

      1. Well, thank you…I just hope I’m doing this right since I’m fresh and new at this. I do use wordpress and bluehost is my web maker and my seo (supost to be). My main problem is getting customers to visit my site…and I’m lacking some matterals like ereaders….I can’t seem to find them as a affiliate.

      2. Exactly. The same is true for an online store. All you need to do is buy a template and that will take you 80-90% of the way there.

    2. Hmm… Your niche is especially difficult since you are trying to sell books. What comics do you have that you can’t get on Amazon?

      1. Well I became an affiliate to “mycomcshop.com” I had some but the cover is new and I made some errors and as a result, they have to be reloaded onto the site…which mean more work for me. I also became an affilaite to free-Ebooks.net. So far, I hit nothing for a small profit for income to make ends meet.

      2. Anime? I’m not sure but manga (anime) is one I hear that is popular in the comic sections…or so says my little brother since he’s a big fan of Naruto. He told me that I should put manga (animae) on my website to make some profit. Sounded like a good idea since I don’t have a job.

  5. I think #1 is definitely the hardest. I feel like if I can finally figure out what I want to sell, everything will be so much easier. I just feel stuck in trying to figure out what product I want to target :-(

  6. This is great post I coach others on getting on line too and I agree 100% with what you’ve post. Another mistake I see is the don’t build long term marketing strategies. I’ve seen many people with huge followings, good amount of traffic and they don’t collect emails to directly connect with folks later.

  7. Steve, this is my first time at your blog. Very well done with a ton of useful information. My wife just started a blog so these points are of critical importance. I am sending her the link to this post and this will be a great springboard for discussion and brainstorming the development and enhancement of her new site. Thanks for the tips.

  8. It’s absolutely wonderful content and you have sharing alot of knowledge in this blog. Thanks for posting.

  9. There is a problem about my store/internet

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