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Shopify Success Rate: How to Make It in the Harsh World of E-commerce

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Shopify success rate: Starting a new business is no easy task. According to the US Bureau of Labor Statistics, roughly 20% of new businesses fail within their first couple of years. That figure climbs to 45% within five years and 65% during the first ten years. Only about a quarter of new businesses make it past the 15-year mark.

These figures reflect how challenging building a new business can be. In the digital world, starting a new business is even more challenging. In this article, we will explore Shopify success rates. In particular, we’ll focus on how many e-commerce stores make it and how your store can be among the winners. We’ll unlock some of the secrets to building a successful e-commerce site.

What is the Shopify success rate?

Most estimates coincide that the Shopify success rate is about 5-10%. Note that Shopify doesn’t release specific numbers around this, so it’s hard to know exactly. 

That Shopify success rate might seem quite low, but don’t let it deter you! It’s just a good reminder of how hard it is to start a new business, and keep it afloat. It ultimately requires a combination of knowledge, skills, experience, and perhaps even a dose of luck from time to time. Unfortunately, many eager entrepreneurs build a Shopify e-commerce site without truly understanding what it takes to succeed.

Building a successful Shopify store demands that you understand the most common mistakes and how to avoid them. Fortunately, we’re here to take a deep dissection into some of the mistakes entrepreneurs make. By understanding these mistakes, you can build a successful Shopify store. This knowledge will help you climb into that coveted 5%.

What are the five most common reasons why e-commerce stores don’t make it?

The five most common reasons in this section don’t necessarily apply to Shopify e-commerce sites. These reasons essentially apply to any online store. However, using Shopify as your chosen platform gives you a leg up on the competition. 

How so?

Overall, Shopify simplifies building an e-commerce site. As a result, you can leverage Shopify’s tools and apps to make building a successful Shopify store straightforward. Let’s take a look at some of the most common reasons why e-commerce stores don’t make it. 

Shopify success rate: Avoid these common mistakes

#1 Failing to Understand your customers

Simply put, businesses that don’t understand their customers are doomed to fail. Virgin founder and CEO Richard Branson once said, “To succeed in business, you need to be original, but you also need to understand what your customers want.” 

Branson’s quote sums up this first mistake. When you fail to understand your customers, you most likely end up in the wrong market niche. For instance, your Shopify e-commerce site focuses on beauty and cosmetic products. 

You build an original-looking site aimed at a younger demographic. However, your products typically sell better in an older market niche. As a result, your branding and marketing efforts fail to deliver your expected results. 

What’s the lesson here? 

Striving to be hip and original will only take you so far. When you clearly understand your customers, you can build a great-looking site that appeals to and attracts the right customers. 

Extensive AB testing of your site is also a great idea, and might result in a few surprises. Spend as much time as possible learning who your customers are, what they’re looking for, and how you can best give it to them.

#2 Choosing the wrong products (a major Shopify success rate factor)

Let’s suppose you have a perfect understanding of your customers. Let’s also assume you’ve built a top-quality site. Now, your Shopify store’s success boils down to selling the right products. However, your site ends up selling the “wrong” products.

How is this possible?

Tech legend Steve Jobs offers this blunt piece of advice.

“Your customers don’t care about you. They don’t care about your product or service. They care about themselves, their dreams, their goals. Now, they will care much more if you help them reach their goals, and to do that, you must understand their goals, as well as their needs and deepest desires.”

Harsh, but true. If you can help achieve your customers’ goals and dreams, you have a great shot at building a successful Shopify store. For example, imagine you sell household cleaning products. What do your customers want? Products that will clean most effectively, products that reduce the amount ot time spent cleaning, or products that are environmentally friendly? Once you know what your customers need, you can offer them the right products.

shopify success rate

#3 Neglecting mobile customers

Today, m-commerce is a massive component of almost every successful Shopify store. After all, there are roughly 6.3 billion smartphone users in the world. Two hundred ninety million of those users are in the US alone. Therefore, your Shopify store must facilitate users’ access to a mobile version of your site. 

shopify success rate

Sadly, many e-commerce sites fail because they neglect to build a mobile app or a mobile-friendly version of their site. Of course, developing a mobile app can be a costly endeavor. Therefore, the next best thing is to build a mobile-friendly site. Shopify can help you do that, and it’s well worth the time and effort.

#4 Low-quality storefront

Trust is a valuable commodity in the e-commerce world. As such, a low-quality store breeds mistrust with customers. For instance, stores with spelling mistakes or even just vague product descriptions may turn customers away. Plus, poor-quality photos and a poor storefront design may cause your customers to think you’re an amateur shop.

Unfortunately, new e-commerce sites fail to realize the importance of building a top-quality site. With Shopify, it’s hardly difficult to make a great site, even if you’ve never done it before. Using Shopify’s great apps and theme templates will help you give your customers a great first impression.

#5 Poor customer service has a huge impact on the Shopify success rate

Many Shopify stores fail because they can’t handle customer service appropriately. Customer service involves answering questions dealing with returns, complaints, and refunds. As a result, your ability to swiftly handle customer communication will give your customers a great shopping experience. 

There are plenty of great Shopify customer service apps. These apps make communication easy by integrating several channels. For instance, you can integrate social media, email, and chat functions into a single dashboard. This approach allows you to manage customer communication quickly and easily. Consequently, you can boost your site’s overall performance by giving your customers a great shopping experience.

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What are the five most common signs of Shopify success?

Let’s say you address all the points above, and you think your store is doing ok. What are the signs that you’re on the right track? How do you know whether your store is in line to become on of the lucky 5-10%? Here are some of the key metrics you can use to track your store’s success. 

#1 Increasing revenue

Undoubtedly, growing revenue is a key indicator that your store achieves success. Sustained month-to-month growth is an encouraging sign of your e-commerce site’s success. 

shopify success rate

Naturally, there are ups and downs – sales, holidays, and other factors can have a big impact on your sales. So, one down month should be no cause for concern, but measuring overall trends is very important. 

#2 High site traffic (good indicator of Shopify success rate)

Another key success metric is site traffic. Site traffic is just like getting customers to walk into a store. Naturally, you cannot expect to sell anything unless customers walk in the door. Similarly, site traffic reflects the number of visitors your site gets. 

Most Shopify sites measure their traffic daily. In other words, they calculate the number of daily visitors. High-traffic sites measure their visitors hourly. Extremely high-traffic sites measure visitors by the minute. 

Generally speaking, if your site keeps getting more visitors, you can take that as an encouraging sign. However, customers walking through the door isn’t what makes you money, which brings us to the next point.

#3 Conversion rate

A high number of visitors is a great thing. A high conversion rate is even better. A high conversion rate means your visitors are buying into your e-commerce site. Thus, you can track your Shopify store’s success by how many visitors end up making a purchase. 

For instance, if 3 out of every 100 visitors purchase, you have a 3% conversion rate. Generally speaking, anything over 5% is amazing, and you can relax.

#4 Return/refund rate

Indeed, making sales is great. However, a clear sign of trouble is a high number of returns and refunds. If your store has a high return or refund rate, it means something is wrong. Ultimately, you may lose both money and customers. 

Therefore, keeping your return and refund rate below 1% should be your golden metric. If you focus on delivering exactly what customers want, you’ll keep your refund rate down as low as possible.

#5 Profitability

Second, you can measure your Shopify store’s success by its profit margin per product. For instance, if product A costs $1, and you sell it for $1.50, you have a 50-cent profit margin. This metric is your gross margin, as you may still have overhead costs to consider. A gross margin of over 25% is healthy. 

However, you may find that most products have a gross margin of at least 50%. It’s a sign of trouble if your shop is handling razor-thin margins. This situation means your costs are too high, or you’re not pricing your products appropriately.

How can PickyStory help you become the next Shopify success story?

PickyStory can help you generate more revenue from every store visit by selling extra products to your customers. Rather than adding one product to their cart, offer your customers a three pack, or tempt them with products that are often purchased together. This helps to increase your average order value (AOV), which in turn boost revenue and helps ensure your store makes it. 

shopify success rate

With PickyStory, you can display deals on product pages, in collections, in the cart, and just about anywhere else you like. What’s more, your inventory is automatically synced with Shopify and tracked at SKU-level, and the deal widgets can be customized to suit your brand’s stylings. 

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Stay on the right side of the Shopify success rate

Becoming the next Shopify success story is about understanding what your customers want and how you can better serve them. After all, you already know the value that your products can deliver. So, the challenge is to combine your e-commerce site’s value proposition with outstanding customer service. Then, PickyStory can help you maximize your site’s overall value with irresistible product deals.

You have everything it takes to make it into that top 5% of Shopify stores!

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  • Topics: Shopify How-To

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