Why does an internet business fail

Why does an internet business fail

These days, it seems like an internet business just cannot fail. But that is a flawed and misconstrued assumption and each day we see more online businesses closing shop because they have made some very basic mistakes. We investigate why internet businesses fail in a world where virtually every customer is online and online shopping boom has truly arrived.

A flawed marketing strategy

Most internet business make the flawed decision of using 50 percent of their startup resources in marketing alone to build a big customer base very early on. This can sometime leave the company without sufficient funds to remain operational in the long run or even make it to the second round funding stage.

Segmentation and target consumers

Defining the audience and targeting a particular customer type is a must for online businesses. Failing to identify an exact niche and not marketing to it makes internet businesses fail.


When you set up an internet business, you need to be essentially more cost effective for the consumer than an on-ground shop. However, packaging and shipping often drive product prices higher. Failing to offer competitive prices is a major cause behind the failure of internet businesses.

Improper metrics tracking

Any internet based business need to track its metrics to remain optimally functional. Not tracking metrics properly or using a flawed system that returns an inaccurate result can seriously hamper projects and run an internet business in the ground.

Trying to be too speedy

When you run a business over the internet, you are tempted to be better, faster and cheaper than the closest competitor. However, you cannot get all three qualities in your service and products at once and trying to do so only debilitates the business for good.