Electronic commerce is one of the key segment that is thriving in the online business world. With the availability of software such as the Shopify, WordPress Woo Commerce and many others, it is now easier to establish an online shop and start selling within minutes.
Even though the selling of the products and services seems simple, the management aspect is always complex. There are several risks that you will run into just like any other business. The key ones are as follows:
Being able to sell a product or a service online is one of the major risks. Being successful in this industry is defined by the product that is chosen for sale how many are being sold. This is the number one risk that all online business owners have to face. The quality of the supplier’s products that reaches to your doorstep may not be the same as seen on photos. You need to be able to cover such costs. Avoiding this kind of risk will also not do any better for the company as your sales will be stagnant.
Cyber security risks
Cyber security is a key risk in the online business world. Some of the risks that are encountered include the unauthorised access that results to personal information about customers leaking, interception of the credit card details and also a denial of service. This risk can result in a very bad reputation of a company especially when it occurs.
In this business, there is higher dependence on the third party service providers such as payment gateways’, hosting, shipping and even delivery. When the providers experience an issue, it will always affect the business thus leading to losses due to the reduced sales. Therefore, always have an alternative to switching to when interruption happens.
It involves the lawsuits that come from the customers when a product that was sold to them causes damage or injury. It is very common when defective products are sold. The mitigation is to acquire liability insurance and avoid selling products that have no authentic origin.
Planning makes the owners of the business prepared when such like risks materialise. Failing to plan is planning to fail.