E-Commerce Trends October 2022

Each month we bring you e-commerce trends, analysis, and resources so you can pilot your business to success. Check out our September edition here to stay up to date.

This month we are looking at four common mistakes made by E-commerce brand owners..

Running an e-commerce business is not easy. Yes, it can be very financially and emotionally rewarding. But, you typically don’t reach that stage until you have experienced some pain and failure. We have worked with a lot of e-commerce brands, so we decided to share some of the most common mistakes made by e-commerce brands when they are first getting started.

Four Common Mistakes Made by New E-Commerce Brands

1. Budget is Too Small

This one will hurt to hear for the solopreneurs trying to create a product for under $10k. Yes, it is possible to develop a product for under $10k. But, your sales will come very slowly, and you might be unable to survive the inevitable cash flow crunch. To develop a well-researched and marketable product, you will want a budget of at least $50K. Let me explain:

Need to Spend to Create Product

First, you will have to pay someone to manufacture your product. The minimum order quantity an outsourced manufacturing company will accept is typically 100-150 units. However, due to economies of scale and a one-time tooling fee, those orders are significantly more expensive per unit than regular-sized orders.

Need to Spend to Test Product

Next, you need to test your product to ensure that it looks, feels, and operates as intended. If you are lucky, it will. But most of the time, you will have to make multiple iterations and adjustments to your product before you have something you can sell.

Need to Spend to Market Product

Many entrepreneurs forget to include marketing costs in their product development budget. The thinking goes that marketing should pay for itself with product sales. However, you need a large sample size of traffic before you can get accurate conversion rates. Spending a couple of hundred bucks here and there will not get you the necessary traffic to determine if your conversion rate is sustainable or not. Your first marketing campaign should cost at least $5,000 per month so you can get adequate traffic and tweak the effectiveness of your ads.

2. Seeking Validation

People are always looking for validation from their friends and family. You may want to hear them say things like: “wow that is genius” or, “I would definitely buy that.” However, one of two things usually happens:

  1. They tell you what you want to hear
  2. They tell you their honest opinion, but you don’t listen to the feedback

The only place you should be looking for validation is the market. If your product is selling, you don’t need validation from your friends or family. If your product isn’t selling, look to what your competitors are doing and what your customers are saying about your product.

3. Advertising Everywhere

We like to call this the “spray and pray” strategy, and we see it far too often. Effective marketing starts with identifying who your target demographic is. Next, you need to find out what social media platform your target audience is hanging out on. We created an in-depth look into social media platform demographics on last month’s e-commerce update.

Blindly throwing money at advertisements will just lose you more money and erode your budget. Instead, it is best to focus on one or two platforms so you can refine your copy and call to action specifically for your targeted audience.

4. Not Testing Demand

You should not pay money to develop a product until you have tested its demand. As the old saying goes, “measure twice and cut once.” Testing demand is a simple three-step process:

  1. Create a landing page for your product
  2. Buy traffic to your landing page to measure your conversion rate
  3. Show an error message when a customer clicks to buy

Following this process will save you a lot of time and money in developing a product that does not have any demand. Alternatively, you can accept pre-orders and use that money to fund your product development 


If you can avoid these four common mistakes, you will save a lot of money and headaches in your e-commerce journey. Ultimately, these mistakes all boil down to a lack of good planning. You will be well on your way to profitability If you can (1) prove that there is demand for your product and (2) have a large, flexible budget for development and marketing. 

At Windstone Financial, we specialize in helping e-commerce brands grow their revenue and lower their taxes. If you need help reaching your business goals, click the button below to speak with a CPA today!

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Windstone Financial

Windstone Financial

We are a dedicated team of CPAs that work exclusively with small business owners to lower their taxes and grow their businesses. We will provide relief to all of your accounting headaches.

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