5 Main Risks of Starting an E-Commerce Business

Since the advent of the internet and the invention of high-end but more affordable mobile phones, e-commerce has become a thing. A big thing. Online shopping has become prevalent wherever you are in the world. Shopping online for just about anything has become so popular that more and more people, all over the world, are now setting up their own e-commerce businesses.     

If you want to start your own online store, you need to equip yourself with the knowledge of the main risks of an e-commerce business to ensure that you’re off to a good start. 

Risks you WILL encounter

While running your own online store is much easier and less expensive than opening a brick-and-mortar shop, there are a few risks that you will most likely encounter.  

Read on to be aware of those risks to be able to prepare yourself better as you start this new entrepreneurial journey.

  1. Online Security

There are several security threats that your online shop will come across with if you’re not careful. These include phishing, data errors, credit card fraud, unprotected online services, and hacking.  

To protect your e-commerce business from at least most of those, you need multiple layers of security in place. You should also monitor all transactions from purchase to delivery. Also, require strong passwords from your customers and secure an SSL certification.    

  • Copyright or Intellectual Property

Intellectual property is a legal term that refers to copyright protection of any type of property or asset.    

When you deliver high-quality products as advertised in your store and ads, you must protect your property or asset from infringement by legally performing an audit and by patenting your products (if necessary). Similarly, you should also make sure you’re not violating other business’ intellectual property.  

  • Customer Disputes and Chargebacks

Disputes between online shoppers and merchants is a common risk for all e-commerce businesses. Some of the most common chargeback reasons include the following:

  • The product was never delivered.
  • A stolen credit card was used to make the purchase.
  • The product didn’t meet the buyer’s expectation. 
  • The wrong product was shipped.
  • The purchase was billed twice.

In most cases, you will be required to refund or pay the total amount of the items in question, as well as pay a chargeback fee to the processor once the claim is proven valid. Be sure to respond to the dispute immediately. Also, see to it that your shop’s refund policy is as clear as possible to your customers.

There are some services which can help you settle disputes with customers more smoothly and quickly. To understand better how it works, read the following Purchase Guard review.                       

  • Product Warehousing and Logistics

Your business can run out of stock, products are shipped late, and sometimes even delivered to the wrong recipient – these are just some of the main risks of an e-commerce business.    

To avoid these, use an inventory management software to track sales and stock easily, and a barcode scanner to process everything faster. You must also make it a point to cross-check all the details of every buyer to make sure deliveries are made to the right location. 

  • Customer Service

Poor customer service can make you lose your business, especially now that people can easily write a review of their experience with your online shop. It’s recommended to use chatbots to assist customers with their needs. It would be best if you also made it a point to exceed their expectations so they will be more than happy to shop with you again.


There might be other issues and risks that your business will encounter. You have to make sure that you always update your knowledge on running an online shop so you can better prepare for any eventualities.