4 Common Risks of Online Business and How to Prevent Them

Starting an e-commerce business has lower barriers to entry than building a traditional business from the ground up. But an online business also comes with a unique set of risks you need to know first before launching your site.

Retail from e-commerce generated $4 trillion in sales in 2020. As 4.9 billion people look to the internet to fulfill their needs during the pandemic, it’s the responsibility of e-commerce business owners to mitigate threats and ensure their customers are protected when using their online services.

Let’s look at the most common risks of online business and tips to prevent them.

Risk: Security Breaches and Data Hacks

Do you know that more than half of companies close within six months of getting hacked? Your website is a gateway for hackers to obtain sensitive customer information. 

A data breach is fatal to a company, resulting in costly lawsuits and the loss of reputation.

The most common technique used to obtain sensitive information is phishing. This happens when a site user is deceived into opening a malicious email designed to steal credit card and personal information like passwords and login credentials.


To prevent data theft and security risks like phishing, ensure that your site security and infrastructure are robust and well-protected. 

  • Use two-factor authentication (2FA) and multi-layered security.
  • Encourage users to use strong passwords upon account creation.
  • Use SSL certification for conducting safe transactions.
  • Set up PCI network scans regularly.
  • Choose an e-commerce platform with robust and reliable security features.
  • Conduct regular malware checks.
  • Train your staff on safe site use and data handling practices.
  • Only keep a minimum amount of data.

Hackers are finding new ways to steal user data every day. As an added layer of security, it may be wise to consider getting cyber liability insurance for your financial protection and peace of mind.

Risk: Service Downtimes

As with most things, your e-commerce platform and its associated apps and software need maintenance, which means downtime. Downtime is when a particular platform or service is unusable, inaccessible, or inactive.

Service downtimes cause more than just revenue loss. They can also disrupt the efficiency of your services, negatively impact your SEO, and leave a bad impression on your users and new visitors.


The best solution to this problem is to be picky in choosing your service providers: your e-commerce platform, your hosting service, and your third-party apps and plugins. Be diligent in your research, and read about feedback.

In the event of the inevitable, have a contingency plan for attending to your customers’ needs. 

  • Be sure you have your vendors’ current contact information to easily reach out in case you have questions about the downtime.
  • Set up a downtime page to inform customers of the issue and direct them to the proper channels for their questions and concerns.
  • Offer discounts to compensate for the inconvenience.
  • Leverage the use of social media to inform and answer queries.

Risk: Customer Disputes and Refund Requests

There are plenty of reasons customers dispute their orders. The most common ones include not receiving their parcels, the items received were not the same as the items ordered, the item was ordered on a stolen credit card, or they were charged double for what they bought.

These things happen and are common when you’re selling online. Still, it’s crucial to prevent these from happening in the first place to avoid bad reviews and wasting your time and resources.


To help mitigate chargebacks and customer disputes, have the following measures in place:

  • Set up a clear refund and returns policy page on your site.
  • Respond promptly to dispute notices.
  • Charge the customer only after the product has been delivered.
  • Use barcode scanners to prevent payment-related issues.
  • Ensure full authorization before product shipment.
  • Find the right vendors and partners to secure product quality.

These will ensure that customers receive the right items and get charged correctly for their orders. This also helps prevent you from expending your limited resources on customer service and refund processing.

Risk: Low Online Visibility and Traffic

It’s no use having the most beautiful website and the best available product on the market if your customers don’t know you exist. 

If you’re new to e-commerce, you might have difficulties establishing your presence among millions of sites vying for customer attention on the internet. Fortunately, you don’t have to be an old-timer to be reputable and get seen online. All you need is Search Engine Optimization (SEO).


Your website should have a good standing in Search Engine Results Pages (SERPs)  to be visible and get traffic. That said, SEO is a necessary investment.

SEO will optimize your website for page speed, crawlability, and keywords. When your customer types in a keyword related to your product on search engines like Google or Bing, your website should appear on the resulting pages. The nearer to the first page your site is, the more traffic it gets.

SEO practices and techniques are as sold as the internet itself. A quick Google search will yield plenty of resources that will allow you to do SEO independently. However, if you’re looking for fast, measurable results, the best way to go is to hire an SEO agency that knows the field better than anyone else.

SEO experts offer various marketing services, from SEO to Google Ads that can really bump up your page rankings and increase sales.

Final Word

Anyone can gather inventory, set up a store, and start selling online. But no business venture comes free of risk. When it comes to e-commerce, keep in mind the significance of data security, software limitations, and negative customer feedback on your brand to build a strategy for mitigating relevant issues. Knowing what you are up against beforehand will help you create plans of action to avoid these issues from transpiring and taking a blow on your business.


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