7 E-commerce Mistakes that will make you broke | Insights from my career

Everyone loves an additional income and even I was no different. So, I started an E-commerce business 5 years ago, thinking that I would make a lot of money.

But did I make a good amount of money initially?

No, not at all. I did a lot of mistakes in my journey. But I was determined to learn from those mistakes.

So over the time, I have realized that learning from mistakes is a task by itself. It comes from analyzing our plan sheets, detailing on our outputs, identifying the flaws, and finally aggregating our mistakes from the failed/not-so-progressing business ventures.

My E-commerce mistakes and the steps to overcome –

Here, I will be sharing the e-commerce mistakes I did, including the safety measures to prevent them.

Mistake #1: Lack of accounting knowledge and filing process

I agree that I did not have sound knowledge in taxes when I started my business. It was the era where we had VAT/ CST. It was really complex and confusing to consolidate them. Many auditors were not aware of E-commerce taxations, and also there was less resource and valid data on Google.

It took days for me to consolidate one month report, yet it was in a clumsy state. I was not able to validate the records. Ultimately, I ended up paying the tax penalties for showing wrong calculations.

However, today we have a lot of YouTube channels, facebook groups, blogs for GST, TCS, etc. Thanks to the development in technology, we now have automated software to do the same.

Again, I am not emphasizing here to master the taxation policies – but do make sure that you know the basics before starting a career in E-commerce.

It is important to hire a proper auditor for your company. He/she should have sound knowledge in E-commerce filing. One can also try automated software and add an additional resource to validate the records as a final check.

I am sharing one of the blogs which clearly explains about TCS/GST. Click here to understand the taxation policies.

Also, you can join E-commerce facebook groups and ask queries to the community. Click here to join my group

Mistake #2: I did all works myself

There is a famous proverb which states that Jack of all trades, master of none. It is 100% true. Though we call E-commerce business as a part-time/work-from-home business, the amount of work involved is really high.

You have to source products, prepare pictures and edit them, write down the description, list products, work on marketing, packing, shipping, accounting, etc.

As my business volume was small at the initial stage, I did all the work by myself. And when I analyzed my growth, I did not see progressive growth because I did not use my time wisely.

A seller should invest his/her time wisely in product selection and pricing. However, I was focused on accounting, packing, etc which would be the wrong decision.

When I hired people for packing and outsourced few works, I noticed that I spent time on analyzing the products and also saw a good growth in my business chart.

How to Create your team?

Team work

If you are an E-commerce seller, here are some of the ways to build a team.

  • Hire an employee for packing or do take a marketplace warehouse such as Amazon FBA.
  • Contact photographers and handover your products. Let them take picture and edit for you.
  • There are a lot of content writers who can write product description and key features for your business. Do contact and hire them and share your product images and descriptions – ask them to write/edit the content.
  • Outsource your marketing works like ad management and social media management.
  • Don’t waste your time on accounting: hire a proper auditor and save sweat getting the complete accounting work done for you

Mistake #3: Selling low MRP products

This is one of the biggest mistakes that every seller do and even I did. Selling products of low MRP like 99rs or 199rs will not give us any profit unless you are the manufacturer too.

I was reselling and I chose low MRP products. I did make good sales in number but at the end of the day, I did not make any profit.

Marketplaces charge us commission charges, shipping charges, and return charges. If you are a reseller, do not try to sell low-value products.

Make sure that you make a profit after marketplace commission charges, shipping charges, return costs. This will help you to build a successful and profitable business

Mistake #4: Wrong inventory planning

It is important to analyze products before we procure. You should not invest money without prior product research.

I was selling toys and I used to sell 1000+ products in a single month for a particular model. I got an offer for similar types of toys at the best rate and I purchased 1000 pieces believing that this product also will make me a good amount of sales.

You know what happened?

I did not even sell 100 pieces per month. That was a whopping wrong decision. Not only did I not make money from the same product, but also lost all my money.

My advice is to do product research before you invest. Search a product on Amazon and do check the best seller products in each category and purchase only good selling products.

You dont need any external tool for ánalysing fast moving products. Each category on Amazon has its best sellers as shown below.

best sellers

Amazon Best Sellers

How to win the market when our product is new?

If you wish to try new products, make sure whether the below criteria are met

  • Unique Design/ Product
  • Competitive Pricing
  • Analyze if there is a need for the product in day to day life.
  • Consistency in sourcing

Mistake #5: Relying on only one marketplace

My sales were mainly from Flipkart and ShopClues (yes, you read it right, it’s ShopClues). My 70% of sales were from Shopclues only.

Since I was busy with these two marketplaces, I did not focus much on other marketplaces. One day, I decided to explore the other opportunities and listed products on other marketplaces and also on sites like Indiamart. I could see a 30% increase in my sales once I started listing on multiple major marketplaces.

So if you are selling in a marketplace and relying only on that, it’s time to be proactive and take action. Hence, start listing on multiple marketplaces.

If you have a good marketing budget, you can also start your own site and start investing money on ads.

Mistake #6: Not validating my sales and profit regularly

Tracking offline business sales is easy when compared to online business. In E-commerce firm, procuring reports from each and every marketplace is a difficult task. Math and calculation stopped me from analyzing the profit.

This was the biggest mistake I did. When I started calculating my profits and losses, I got a clear study in which sector I am losing money.

Then, I prepared a plan to overcome my losses. That way, I was able to invest more time in my profit products alone.

It is important for you to spend weekends on analyzing the sales growth and profit calculation for your products. Don’t give yourself any excuses that you are busy, as I did.

Create a schedule right now in Google Calendar and try spending at least an hour in the coming weekend and you would really understand your business a notch better.

Mistake #7: Not abiding Marketplace policies

As soon as we start a business we feel that we are free to decide on our own and that there is no boss to question us.

That was exactly my prior thoughts too. But it’s not so. The ground reality is that our responsibilities, worries and difficulties are more than what one feels in a desk job. You have to answer many people in a business. And it’s no simple task.

If you are an E-commerce seller on Amazon or Flipkart, you would have seen the performance tab, which is important to be checked periodically.

As I did not check those periodically, I faced account suspension.

My Flipkart Account was put under review

My Flipkart account was on hold twice as I had canceled orders due to inventory issues. I did not maintain the inventory properly.

So, it is more than important for one to have a check on the offline and online inventory. If you are not able to handle it, please get the help of appropriate software like OMS Guru, Browntape, etc…

Do a weekly audit of the inventory on each marketplace

Amazon account suspension

My Amazon account was suspended once because of late dispatch rate. It was because of my carelessness that I shipped my parcels late.

I wrote a plan of action on Amazon and it got activated within a day. I would now say ‘Thanks Amazon for suspending my account’, because now I am able to help many sellers in account activation.

Check out the below video to prevent Amazon account suspension

Amazon Seller course

I have completely crafted a course based on my experience. In this course, I covered about selling on Amazon from scratch. Do click on the image below to check the course modules and the charges. 

Amaozn selelr course


Each and every marketplace has its own policies. Make sure that you read the policies. You are not supposed to send fake products to customers knowingly or unknowingly. In case you violate any of the policies, the companies have right to file a legal case against you.

nivetha muralidharan tips

If you have any queries, please comment below and I will be happy to assist you.

Also, you can contact me on [email protected] for a paid consultation.

This Post Has 23 Comments
  1. This post is so simple.. Yet so crucial to know. You clearly made me realize many of my mistakes as well :).

    However I would like to disagree on one point.. You actually DO need some external tools and softwares for product research atleast for Amazon. Selling products which are simply in the page first and 2nd of the best sellers list won’t work anymore. It used to work before but now the marketplaces are getting more and more competitive.

    1. Thanks for the comment Kshitiz
      Yes, I agree with you. We need to use tools for product research. But for a new seller, they can initially start with best sellers.

  2. I think (and it reflects from your write up also) that handling mistakes is what makes one masterful but one should not have mouthful of them as they can choke. So I fully agree that once business goes into growth mode one needs a team and building business and building a team goes hand in hand. Thanks for sharing your experience to let us check ourselves.

  3. Thank u for a very informative blog. For a new seller like me its an eye opening. It help me to rethink and have a good preparation before launching my online business.

  4. I am a year old seller , listened your name today in an ecommerce seller group , visited this blog and feeling amazed ,you catch all mistakes properly which most of new sellers Do. Very informative Article . It will help me to grow my business .
    Thanks for make my morning Positive .

  5. I must voice my appreciation for your kindness giving support to women who actually need help with that issue. Your personal commitment to getting the solution up and down has been extraordinarily effective and have all the time made professionals much like me to reach their endeavors. Your new invaluable guideline entails much a person like me and a whole lot more to my office workers. Thank you

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