What Risks Are Associated With Investing In Ecommerce?

Investing In Ecommerce
Investing In Ecommerce

According to a recent report, the global ecommerce market size was estimated at US$ 16.6 Trillion in 2022. Industry experts also predict that the value is expected to reach US$ 70.9 Trillion in the next 5 years (2028). Looking at this trend, it’s safe to conclude that the future of e-commerce is pretty bright.

Yes, you certainly will enjoy tons of goodies by investing in e-commerce. However, before you go ahead to invest, you need to know that e-commerce investment also has its issues. Read on to discover the risks associated with e-commerce, including what AWM wants you to do to avoid these problems.

Here are the common challenges associated with investing in e-commerce

Like various physical businesses, e-commerce businesses also face tons of difficulties. Below, you’ll see some common risks you may encounter while investing in e-commerce:

1.  Cyberattacks

Today, cyberattacks have become a day-to-day thing. According to a recent study, about 30,000 websites get hacked daily. As of 2022, cyberattacks alone cost the world roughly $6 trillion. This value is expected to increase to about $10.5 trillion yearly in 2025. This trend shows that e-commerce investors need to be careful to avoid falling victim to cyberattacks.

Yes, as an investor, you need to be very vigilant to avoid losing your customer data to hackers. This issue won’t only expose you to liability. In addition, it can also ruin your reputation.


  • One effective way to avoid cyberattacks and data breaches is by keeping your systems protected against malware.
  • In addition, you can also avoid various security breaches by building and maintaining secure apps and systems.
  • That’s not all; you can also keep your business protected by using different advanced security tools and adding extra security layers to your system.
  • Furthermore, the use of SSL certificates is also very important to protect your transactions.


2.  Seller competition

Before investing in e-commerce, you need to keep in mind that you’ll surely encounter competition with other sellers in your industry. The interesting thing about e-commerce competition is that it’s available in different types. Apart from competitive products, you’ll also need to keep up with competitive services and even prices.

  • One good way to overcome a competitive price issue is by clearly creating a business value proposition, which you’re sure your buyers can’t get from your competitors.
  • You can also address the issue of e-commerce competition by performing a competitive analysis. This way, you’ll better understand exactly what your competitors are up to. By knowing your customers, you’ll get one or more ideas on what to do to improve your business and remain in competition.


3.  Online fulfillment of orders

Investing In Ecommerce

Investing In Ecommerce

You may encounter various order fulfillment issues when trying to run your e-commerce platform. For instance, as a small business owner, what happens when you get more orders than you can handle? Many business owners often encounter this problem.

To address this issue, one effective solution is to consider online fulfillment services. These services involve outsourcing your shipping & order fulfillment to a third-party fulfillment company.

4.  SEO ranking issues

Before investing in e-commerce, you need to understand SEO or search engine optimization is important to attract more customers to your site. When done right, SEO can always help you rank at the top of the search engine results page (SERP). When this happens, you can easily drive more sales to your business.

5.  Chargebacks

Refunds and customer disputes are no doubt two common risks associated with running an ecommerce business. In this type of business, certain issues, such as wrong product delivery and defective products, are possible. When these problems occur, the client may request a refund or even a chargeback.

While refunds on defective products or wrong product delivery are not too bad, chargebacks can always cost your business a lot of money. Apart from the reversed transactions that come with them, you’ll also be charged certain fees for each transaction due to chargebacks.

  • One effective way to avoid refund issues when investing in e-commerce is by putting a clear refund & return policy in place on your website.
  • You can also prevent chargeback issues in several ways. For instance, the use of certain tools to deflect client disputes can always work for you. According to AWM, you can also utilize effective fraud prevention tools to avoid unnecessary chargebacks when running your marketplace e-commerce

Why should you partner with AWM?

It’s no more news that there are tons of benefits associated with investing in e-commerce. While the future is bright in this industry, you should never forget that e-commerce also comes with its risks. One effective way to avoid any of these challenges is by partnering with a trusted ecommerce management firm, such as Automated Wealth Management (AWM).

At AWM, we offer different solutions that could potentially save you from experiencing the aforementioned e-commerce investment risks and many more. You can visit our official website to learn more about the different e-commerce management services that we offer.

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