Why 9 Out Of 10 Online Businesses Fail – The Harsh Truth Of Online Marketing

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A lot of researches seem to agree that more than 90% of beginner online marketers will fail to make an income online. What can you do to become the 1 out of 10 that succeeds?

success online business

The situation is not very different for the traditional brick and mortar businesses. Bloomberg claims that 80% of businesses will fail within first 18 months. This doesn’t come as a complete surprise (at least to me). Four years ago I decided to open a bicycle shop in Montreal. I found a forum post on that subject where a bike shop owner documented his journey on the 36 pages… things didn’t look pretty. Opening an offline business requires a LOT of money and if your business doesn’t pick up really fast – you’ll be out of money and out of a business. Besides that forum thread I’ve done a lot of research locally and I found out that a bike shop success rate in Montreal is about 5%… that’s 95% chance of failure. Needless to say I didn’t pursue that idea.


The Online Business Benefit

Although most traditional businesses fail because they can’t pay for rent, stock and many other things, the story of online business is quite different yet the failure rate is just as high (if not higher).

Online marketing makes itself so attractive because of the low investment. In many cases you can start a business without investing a single penny, how awesome is that? The “free set-up” factor lured me into the world of Internet marketing many years ago. To be honest it was not totally free as I started by paying for a training program (free basic membership is now offered) and I paid for a hosting plan a few months later. That was it. I chose the affiliate marketing business model which meant I didn’t have to buy and stock inventory, I didn’t need to ship anything, take care of payments or deal with customers. All I had to do was get the product in front of potential customers. If they bought – I made money. As simple as that.


The Online Business Failure

Over the years I’ve had my ups and downs in the world of Internet Marketing. I’ve interacted with thousands of beginner marketers and I am sad to admit that most of them abandoned the idea of online business without making a single penny. Sure, you’d like to hear that those who “struck gold” were super lucky and the ones that failed were simply unlucky but that’s not the case. I often analyzed these failures and came to the conclusion that all these failures happen for the same reasons. Now I’d like to share their issues so you don’t end up in the same place.


1. Information Overload

Being overwhelmed with information could be pretty devastating to some people. If you don’t have any experience with marketing, website building and social media – you will most likely go through an info overflow when you first start learning about starting an online business. I went through the same problem when I was starting. I had no idea what “affiliate” meant, what keywords were, what was the difference between domain names and hosting. I’ve never heard of SEO or OPT-INs, or Conversions or Paid Traffic. I had no clue how to set-up a website or upload an image to that site or how to change meta tags.

The truth is, you will be overwhelmed with all of the new information. The solution is using a proven step-by-step action plan. Using a specific training program you’ll be able to stick to a path without getting lost. It’ll take time but if you stick to it you’ll come out with lots of useful knowledge that will help you move your business forward.


2. Instant Gratification

Many newcomers to the online world fail to recognize the fact that they need to build a long term business. For some reason folks expect to make mountains of cash overnight without putting in any effort. A lot of beginners will quit the online game without even starting it because they expect to make 5 figures the next day. If it was this easy we’d all be millionaires.

Forget about instant gratification and learn how to be patient. The good thing is – the sky is the limit when it comes to online marketing. A lot of millionaires were created online (especially in the affiliate marketing model). The bad news is that an online business is just like any traditional business. Success doesn’t happen overnight.


Success Online
Too many give up right before achieving success. – image by Dum


3. Lack Of Persistence

This is closely related to my second point, the instant gratification. Most internet marketers (and I include myself in that category) simply aren’t persistent enough. Yes, it is very hard to keep on doing something when you see no results but you can’t simply give up halfway. Unfortunately I am guilty of this and I’ve given up on too many things too soon. I’ve abandoned websites that had huge potential. I stopped testing things simply because I didn’t feel like it. I stopped producing content because I though that no one will ever read it anyway.

I’d like to share a little story that you probably haven’t heard. I’m pretty sure you’ve heard of Angry Birds… That simple video game took over our smartphones and tablets by storm and it’s been downloaded over 2 Billion times (yes, Billion with a “B”). I keep hearing people saying: “Damn those angry birds creators are so lucky! Just look at that overnight success!”. Well, it wasn’t exactly an overnight success.

Three guys in Finland started the “Rovio” company and began making video games in 2003. By 2009 they had created 51 video games and none of these games became successful. After 6 years and half-a-hundred “failures” the company was about to go bankrupt. At this point the guys started going through other sketches they made and trying to figure out what kind of game they could create to save the company… that’s when Angry Birds was born.

It took 3 experienced people, over 6 years of trying and 51 failed games to finally come up with the 52nd game that became world known. That certainly was not a “lucky overnight success”. Imagine if they gave up at the 51st game? Unfortunately a lot of internet marketers do exactly that with their online business. They don’t become persistent and give up, thinking there is no way to succeed.


These are the pitfalls many beginners fall into. I believe that if people were aware of these 3 simple facts, the rate of failure would be drastically lower. There are of course other factors to internet success: the internet evolves fast and you’ll always have to be learning to keep up. Now that you are aware of the most obvious mistakes, you can focus your efforts on building your business.

Questions? Comments? Use the comment box below!

– Alex


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