Table of Contents

Top 32 Online Business Failure Examples From Real Entrepreneurs | Common Online Business Failure Rates

April 5, 2024

Some of the top online business failure examples include:

Ben Alistor’s Amazon FBA business
Jordan Welch’s Shopify store
Goonzie’s Ecommerce clothing brand
Tim Cameron-Kitchen’s digital marketing agency
Mark Tilbury’s Shopify dropshipping store
Emeshe Etsy’s shop
Josh K’s eBay business
Kwebbelkop’s YouTube failure
Robert Delin’s Etsy print-on-demand store
Shaneria D’s Amazon KDP

90% of online business startup failures occur within the first three months of operation. If you’re an online business owner, knowing what caused failed startups is crucial to avoiding the same fate for your business.

In this article, we’ll explore the high business failure rate, along with a list of 32 failed companies. Businesses fail all the time, and it’s important to learn from them and take the lessons into the next venture. Like Mark Tilbury, whose dropshipping store failed. He used the lessons from this failure to become a successful entrepreneur worth over $10 million. Let’s explore people like Mark and 30+ others, dive deep into the exact reasons they failed, and come away with lessons for our own businesses.

1. Ben Alistor's Amazon FBA Business Startup Failure

Ben Alistor started his Amazon FBA business in 2018. He followed the Amazon FBA model, which allows third-party sellers to manage sales while Amazon manages shipping. At first, Ben experienced success. His first product, a tanning mitt, brought in an influx of sales. His monthly profits ranged from £600-£800.

Not long afterwards, however, Ben’s business success started to drop. The next product he chose to sell, a wooden foot massage roller, did not attract as many customers as his first product did. He also failed to learn about taxes, stay updated on Amazon’s programs, and manage his inventory efficiently. Overall, he ended up losing £10,000, severely compromising his online business and success projection.

According to him, here are the factors that led to his failure:

Overconfidence - Ben’s early success with the tanning mitt made him feel overly confident that any product he chose next would sell well. As a result, he failed to do enough research on the wooden foot massage roller, which was not as popular with buyers as the first product.
Lack of tax knowledge - Ben entered the business world without doing ample research on how to reduce his taxes. He hired his unemployed mother and brother to help him with the business. But he failed to list them as employees, which would have reduced taxable profit.
Underestimating product samples - Failing to test a product before promoting it can lead to bad reviews. Ben made the mistake of selling low-quality spy cameras, which resulted in an average rating of one and a half stars. High shipping costs and delays also led to low satisfaction and loss of profit.
Failure to stay updated - Amazon has a Small and Light program, which allows sellers to save money by listing their smaller products under it to receive less fees. Ben failed to stay updated and learn about the program, which caused him to lose money on 15 products that would have been eligible for the program.
Use of Virtual Assistants (VAs) - Ben thought hiring an affordable VA from a country like the Philippines was a good idea. Salaries there range from $300-$800 a month, and he thought he could delegate and save money at the same time. However, he later learned that no one will have the same passion and care for a business as the owner himself. While hiring a VA allows expansion, it also causes the company to wear thin and lose its initial high quality.

2. Jordan Welch's Shopify Store Failure

Shopify is one of the biggest ecommerce platforms to date. Holding 16.36% of ecommerce shares globally, it provides a great opportunity for entrepreneurs to have an online store. The platform makes it easy for sellers to streamline their processes. It also eliminates the need to build individual ecommerce websites.

When Jordan Welch launched his Shopify store, the initial result was a huge success. Not long after opening the shop, Jordan made $1.5 million in sales. One of his videos garnered 10 million views, and his strong ads campaigns and positioning made his store one of the top competitors in its industry.

Unfortunately, this stellar success did not last. Despite high sales, profits began to decline. Jordan lists three factors that spelled the change from success to failure:

Failed ads - Ads were the main reason Jordan’s online store shot up to success. In time, however, he stopped paying close attention to them. Daily ads management is essential to ensuring all ads are optimal, and Jordan failed to monitor how well his were doing. Although one of his ads garnered 10 million views at the beginning, over time it began to lose its impact on viewers due to ad fatigue. This over-reliance on paid advertising that wasn’t working was a big reason for his failure.
Complacency - When Jordan experienced his first success, he grew complacent in his personal life. He stopped working as hard as he used to in the beginning, which greatly affected his business.
Lack of attention - After Jordan’s initial success, he began to branch out into other businesses. The result was less focus on his Shopify store, which often spells disaster for any business, online or otherwise.

3. Travis Marziani's Amazon FBA Business Failure

Travis Marziani started his Amazon FBA business by developing a flavorful nut butter. He conceptualized the idea, facilitated its research, and found a manufacturer to produce it. He then began selling it on Amazon through Amazon FBA.

During his first year of business, Travis enjoyed significant success. The nut butter garnered $360,000 in sales, with $120,000 in profits. During the pandemic, however, he decided to launch a variant of his original product, a cacao-flavored nut butter. From there, his sales began to decline, and he ended the year with only $20,000 in profits.

Travis Marziani’s online business fail can be attributed to a number of factors:

The nature of perishable products - Unless a business is going to sell all its items quickly, perishable products are not, as a rule, a good idea. They cannot be stocked for long periods, meaning a decline in the market can result in huge losses.
Lack of passion and research - Travis conceptualized the original nut butter flavor from a place of passion. He spent adequate time doing research on it, including whether it would sell well. Conversely, the cacao-flavored variant was created more for financial gain than passion. Less research was done, resulting in its failure in the market.
Manufacturer issues - Travis felt scammed by the manufacturer. He disliked their reluctance to produce the new flavor, exorbitant fees, and production delays.

4. Goonzie's Ecommerce Clothing Brand Failure

Goonzie created a clothing brand manufacturing his own custom-made clothes. He then launched the brand, relying on social media platforms such as TikTok to generate leads and sales. Initially, he enjoyed exciting success. A post on TikTok which he published at 7:00 am went viral, garnering 100,000 views and massive interest in his product. On the same day his video went viral, he sold a pair of pants for $180, boosting his confidence in the brand.

Goonzie’s success was not sustainable, however. Of his 100,000 viewers, only 600 people followed him. Although he made 30 products to sell, only 6 were actually sold. The costs of production also outweighed his income - selling 6 pieces of clothing earned $500, but the cost of the sewing machine was $600. The reason for the entrepreneur’s failure can be summarized into four points:

Heavy reliance on social media - While social media offers an opportunity for exposure, it is temperamental, and a video can go from viral to nonconsequential in hours. Goonzie’s confidence got a boost when he achieved 100,000 views on one post, but his following posts only received 150 to 1,000 views.
Launching with a small follower base - Producing Goonzie’s products was expensive. He also made the mistake of creating them and launching before he had garnered enough followers. He suggests that before you launch a brand, you must have a follower count that’s 100x the quantity of the amount of products you need to sell.
Unrealistic expectations - Following his initial success on TikTok, Goonzie thought he could get rich overnight. He fell into the common trap of thinking that creating a logo, building hype, and quick selling was sustainable.
Failure to plan adequately - Goonzie focused on hype and the virality of his videos instead of investing time to research the market and plan how to make sustainable sales.

5. Tim Cameron-Kitchen's Digital Marketing Agency Failure

In 2012, Tim Cameron-Kitchen started up a successful digital marketing agency, Exposure Ninja. The agency thrived, growing until it reached 100 employees. However, new features and rising costs forced the company to increase pricing. This made it difficult for smaller entities to afford it. To counter this problem, Tim decided to create a lower-cost digital marketing agency, and Lead Cap was born.

At the beginning, Lead Cap seemed to follow in the success of Exposure Ninja. There was a large base of clients looking for a more affordable digital marketing agency, and the waitlist for the company’s services grew. The launch was also well received, and clients gave positive feedback on their experience with Lead Cap.

However, within a year, profit margins were discouragingly low. The business had also accumulated other problems such as high overhead costs and employee burnout. This forced Tim to make the difficult decision of closing it down. According to him, the factors that led to his decision were:

Unsustainable resources and project management -The business model required project managers to handle a large number of clients (25-30 each). Furthermore, these clients required more coaching, reassurance, and hand-holding than was anticipated. This greatly burdened the staff.
High costs, low profits - At the outset, Lead Cap was making considerable revenue. However, overhead costs such as HR teams, financing, and support used up almost all of it. What’s more, increased demand made it impossible for the current teams to carry the workload. More layers of management and team members needed to be hired. This would further decrease profit margins, making the business unsustainable.

6. ChrisBstation's YouTube Channel Failure

Chris Bstation was born with a passion for filmmaking. He decided to take his love for storytelling to YouTube, posting personal vlogs and films. However, even with sustained effort over years, he was unable to gain traction and success. He invested $14,000 on his YouTube business but ended up failing. Here’s why:

Lack of followers - Although Chris worked hard on his channel, it never achieved traction and enough viewers and followers to make it a success. His content didn't resonate with a wider audience. Also, the unpredictable nature of the algorithms made it hard to stand out.
Problems with consistency - Chris couldn't post regularly because he was busy with his other jobs. Success on YouTube requires consistency and timing, which Chris didn't have.
Insufficient resources - Chris invested $14,000 in his channel. However, his resources were limited, making him unable to invest further and improve the quality of his videos.

7. Mark Tilbury’s Shopify Dropshipping Store Failure

Mark Tilbury’s Shopify dropshipping store was called Cozy Comfort, and its main product was oversized blanket hoodies. He ordered the items on AliExpress and had them shipped directly to customers. The shop, however, posed serious challenges as a business model, and Mark decided to close it for these reasons:

Unhappy customers - The lower-cost items offered on AliExpress were low quality. Also, the 90-day shipping period frustrated customers who were used to the quick shipping from Amazon Prime. This led to high refunds and huge losses.
Lack of unique branding - Since Mark’s products were generic, they failed to stand out in a saturated market.
Low profits - Because of the massive amount of returns and refunds, Mark’s store began to lose profits.

8. MISS YANYI Full Time YouTuber Failure

Miss Yanyi quit her corporate job at 26 and became a full-time YouTuber. She did a one-month road trip across Europe, posting her content along the way. She also went through several personal changes such as breaking up with her boyfriend and altering her appearance.

However, she failed to gain the traction and views that would make her channel successful and sustainable. After a year, declining views and income loss made her decide to return to the workplace. Here’s what she says led to her failure as a YouTuber:

Failure to adapt - YouTube is a competitive and changeful marketplace. To survive, one needs to do constant research on what’s working, and adapt their strategy to it. Because Miss Yanyi failed to do this, her views quickly declined.
Failure to innovate - Miss Yanyi knew her views were declining, but all she did was post the same content while expecting different results.
Complacency and discouragement - Miss Yanyi started to get too comfortable and complacent, investing less energy in creating videos. Also, she became demotivated by other YouTubers and their success.

9. Kwebbelkop YouTube Failure

Jordi Maxim van den Bussche, aka Kwebbelkop, shot to early success with his gaming YouTube channel. He created content on popular games like Minecraft, Grand Theft Auto V, and Fortnite. These garnered millions of views. In August of 2019, he achieved his best month ever with 166 million views.

In April of 2022, however, his views declined to 8 million, a more than 90% decrease. Here’s why his channel failed:

Gaming content’s volatile nature - The popularity of gaming content depends on the popularity of the game. When the games Jordi played declined, his views declined.
Jorid’s shift in content direction - Instead of ramping up views by making content for more popular games, Jordi created content on wealth and his personal life. This did not resonate with viewers.
Shift in collaborations - One reason Jordi became popular was his friendly personality and desire to know as many other YouTubers as possible. He became part of a 3-person group called Robust, which significantly boosted his views. However, Jordi desired more creative freedom, and he gradually began to distance himself from Robust. Neglecting the importance of networking greatly affected his popularity.

10. Joel Williams's Dropshipping Store Failure

Joel Williams was inspired to start dropshipping by the popular laser epilator brand, “Hey Silky Skin.” He decided to sell a similar product and set up his own Shopify store for it. Because “Hey Silky Skin’s” ads were so effective, he ripped them and used them for his own product.

Joel’s store, however, failed to gain the traction he hoped for. He suffered significant financial loss, and was soon forced to close it down. The “Hey Silky Skin” ads, although they worked well for the original brand, did not do the same for him. Here’s why his store failed:

Unoriginal ads - Just because ads work well for a certain brand, doesn’t mean it’ll work well for every brand. Joel made the mistake of ripping “Hey Silky Skin’s” ads, which did not resonate with potential buyers the way he expected.
Generic website - Joel did not invest in building an effective website with compelling copywriting. This robbed his brand of the chance to appeal to potential buyers.
Unoriginal product - The market for laser skin epilators was highly saturated, so other sellers with better websites and ads easily stole sales from Joel.

11. Emeshe’s Etsy Shop Failure

Emeshe’s Etsy shop focused on supporting people in MLM (Multi-Level Marketing) companies. She created welcome packs, explanatory materials, flyers, and other printable materials. Initially, her store enjoyed success. People in MLM liked her products and she started making significant sales.

But since Emeshe was creating products with the names and logos of MLM companies, she soon ran into copyright infringement issues. She faced various legal concerns, and decided to close her shop. According to her, this is why her business failed:

Inadequate niche research. Emeshe plunged into her business idea without learning about copyright issues tied to it. She also failed to do thorough research on her target audience and what they needed.
Inadequate knowledge of the law - Emeshe was unaware that using a company’s name and logo would lead to legal consequences. As a result, she found herself facing legal issues and had to close her shop.
Jumping in too quickly - Emeshe thought she had found a profitable niche, and she started her business without second thoughts. A little research might have saved her from the problems she later faced.

12. Robert Delins Etsy Print-on-Demand Store Failure

Robert Delins’ Etsy store catered to Harry Styles fans. He named it HS Designed, and created merchandise themed on the popular musician and actor. He thought the customizable print-on-demand products would resonate with fans.

But although Robert did make a few sales at the outset, his business model wasn’t sustainable. He realized that he had targeted the wrong audience, and that his profits weren’t enough to justify continuing the venture. He therefore chose to close his shop. These are the reasons he stated for his failure:

Insufficient audience research. Robert knew who his target audience was, but failed to research the best way to reach them. He built his social platforms too late. And instead of engaging with Harry Styles fans with content they liked, he rushed to sell his pieces to them. Better research on marketing methods for his chosen audience would have resulted in higher success.
Hard sell content - The content Robert created for his social platforms didn’t focus on his audience’s interests. Instead, they focused only on selling his products, which did not resonate with viewers.
Giving up too soon - Instead of retracing his steps and trying to fix his mistakes, Robert felt discouraged and decided to close his Etsy store. Later, with his more successful stores, he realized that he could have saved and grown HS Designed if he reworked it.

13. Daryl Rosser's Lead Generation Business Failure

The lead generation business model is a viable one, with people claiming to earn up to $1,000 a day through selling leads to local businesses. It’s promoted as being a fast, simple way to make a large amount of money. When Daryl Rosser started up his own lead gen business, however, he realized that it’s not as easy as most people say.

Lead generation is not a business Daryl recommends. He said the business is difficult to run because of these issues:

Client dependency - Once the leads are sold to a local business, it’s the business’s job to convert them into clients. However, the success of this conversion depends on how good the local business’s strategy is. This took the power out of Daryl’s hands, making it hard to influence his own success.
Payment for performance instead of leads - Local businesses paid Daryl based on how well the leads were converted into sales. Since Daryl had no control over this, he also had no control over his company’s success.
Overly complex lead qualification - Not all leads qualify to be sold to a business. To qualify someone, Daryl had to listen to calls extensively to see if the lead matched his criteria. The issue of selling personal information was also a drawback.
Difficulty selling to potential customers - Not every local business wants to buy leads. Aside from the job of qualifying leads, Daryl also had to sell to potential customers.

14. Steph Castelein's Blog Failure

77% of internet users read blogs, making blogging an enticing business model for many entrepreneurs. The popularity of blogs appealed to Steph Castelein, and she promptly started her own.

Unfortunately, the blog did not succeed. With over 600 million blogs online, her content failed to get the attention it needed to stand out. But the sheer number of competitors was not the only reason for her failure. Here are other reasons she talked about as a warning to would-be bloggers:

Beginning without a plan - To grow a successful blog, careful planning is required. One must come up with the right keywords, research the audience, and create a strategic content calendar. Steph’s blog failed because she plunged right in without a plan.
Being overwhelmed by perfectionism - Steph focused too much time and energy on trying to achieve perfect content. Because of this imbalance between quality and quantity, she failed to post consistently. Without consistency, blogging success is impossible.
Doing too much at once - Doing too much at once. Aside from her blog, Steph was also creating content for her social platforms. Multitasking became overwhelming. She was soon unable to create consistent quality content for any of her channels.

15. Alex Nerney from Create and Go's Blog Failure

Alex Nerney and his partner started a blog called Create and Go, which featured tips on how to balance health and social life. The blog centered around their personal lives. This included their lifestyle around fitness, health, socializing, and partying. They wrote with a humorous style, detailing party recipes, their experiences, and their take on health and wellness.

The blog never took off, however. After numerous posts, they noticed that no one was reading their content or buying what they were selling. They eventually decided to move away from their blog and start another venture. Here are the main reasons why Create and Go failed:

Self-centered content - Readers enjoy blogs that are valuable to them, not blogs that revolve too much around the writer. Create and Go was all about the couple’s personal life and experiences, which failed to interest readers.
Focus on the wrong aspects of blogging - Focus on the wrong aspects of blogging. It took the couple 7 days to write a mission statement for their company. They focused on the insignificant parts of their business. Meanwhile, they ignored the important ones like audience research and quality content creation.
Ineffective monetization - . Alex and his partner attempted to monetize their blog even before they had consistent traffic and a dedicated reader base. Effective monetization only comes after building a loyal audience and knowing what kind of content they like.

16. Stephan Yaz's Amazon FBA Retail Arbitrage Business Failure

Stephan Yaz was 15 years old when he decided to start an Amazon FBA retail arbitrage business. He was intrigued when he saw a video on YouTube detailing the business model. He decided to go into it by purchasing discounted items at Target and Marshalls and selling them on Amazon. He delivered these products on his bike and made a decent profit at the outset.

However, significant problems soon plagued Stephan’s business model. Although revenue was good, he faced issues like scalability and insufficient time to deliver all the products himself.

Restrictions as a new seller on Amazon - Stephen faced restrictions that prevented him from selling some of the items he bought at Target and Marshalls.
Logistics issues - Stephen delivered products on his bike, which limited the number of orders he could take and process. The mode of delivery also made it difficult to scale the business.
Time issues - Stephen was still in school, and it was hard for him to dedicate enough time to running his business.

17. Josh K's eBay Failure

Josh K started his eBay business as a part-time venture while he was in the military. After he left the military in October 2019, he made it his full-time job. He enjoyed a passion for selling things on eBay, and made a decent income. However, his satisfaction in the business model was short-lived.

After a few months as a full-time eBay seller, Josh decided to return to the marketplace and get a job. Around July of 2020, he landed a position at Amazon as Operations Manager. Here are the reasons why he decided not to continue with full-time eBay selling:

Insufficient profits - Josh was making enough to pay his bills, but only enough. He had no extra money for luxury and enjoyment. Because of this, he felt stressed instead of motivated.
Difficulty balancing passion and financial needs - Josh was passionate about selling and invested a significant amount of time into it. However, since he wasn't selling enough to meet his financial needs, he decided to go back to a regular job.

18. Mary Spender's TikTok Failure

Mary Spender is a British songwriter and guitarist. Her passion is creating her own music. Over the years, she developed skills in sound engineering and videography, and gravitated to YouTube as her platform of choice.

But although Mary was successful on YouTube, she felt it wasn't enough. She wanted to diversify and appear on other social channels. This led her to create a TikTok channel, which unfortunately didn’t turn out as successful as she’d hoped. Here are her reasons why she didn’t make it on TikTok:

Personal style - The TikTok videos that usually go viral are those which feature certain dances and lip-syncing. This did not resonate with Mary’s personal style, leading to discomfort while creating content for the platform.
Problems with platform trends - TikTok trends change quickly, and Mary was unable to adapt her own style with them. Although she knew what was popular on the platform, she couldn’t alter her music to match it.
The transience of viral content - TikTok leans heavily on viral content, and virality doesn’t always lead to success. As a lesson, Mary says it’s important to build a solid following of loyal viewers instead of trying to create viral videos.

19. Shaneria D's Amazon KDP Failure

Shaneria D started an Amazon KDP business selling journals and planners. She created and self-published the journals herself. Initially, the business succeeded by generating interest and clicks to view the product. But out of 500+ clicks, she only made a single sale.

Looking back, the entrepreneur noted the reasons why her business failed. Some of them were a low social media following, low product appeal, and inadequate lead conversion strategies.

Insufficient social media following - Before launching her products, Shaneria failed to grow a strong base of loyal followers on social media. Most of her followers were her family and friends, and although they supported her business, this was unsustainable for growth.
Inadequate lead conversion strategies - 500+ people clicked to view Shaneria’s store, but she only made a single sale due to ineffective strategies for turning visitors into buyers.
Low product appeal - Shaneria started her Amazon KDP business with basic-looking journals and planners. It was only later that she modified them for more appeal. However, the initial generic designs may have greatly hurt her sales and success at the outset, making it difficult for her store to rebound.

20. Marissa Roxas Freelance Filmmaking Failure

Marissa Roxas had a passion for filmmaking and decided to pursue it as a freelance business. At first, she enjoyed the memorable experiences it provided. She created a Filipino-American short film, a football documentary, and a Comic Con shoot with the “Wakanda Forever” cast. She greatly enjoyed being a full-time freelance filmmaker, but it wasn’t long before she realized it wasn’t sustainable to support her needs.

Marissa eventually quit freelancing full-time and took on a part-time job to help stabilize finances. Here’s what she said hurt her full-time freelancing business and what other would-be freelancers can do to avoid the same mistakes:

Going into freelancing unprepared - Marissa jumped into the world of freelance filmmaking without sufficient savings. Because of this, she found herself under considerable financial strain. The unpredictable nature of freelancing stressed her out and this affected her creativity.
Not having a strong network and portfolio - Freelancing requires a steady flow of clients in order to pay the bills and other expenses. Maria didn't have a large network or strong portfolio. Therefore she often found herself without enough money to live a comfortable and stress-free life.
Personal struggles coming in the way of creativity - Marissa allowed her inadequate preparation to come in the way of her creativity. She suffered burnout due to excessive workload. This made it difficult for her to continue her freelance business with passion and confidence.

21. Daniel Midson-Short’s Healthcare App Failure

Daniel Midson-Short’s idea of a good business was a healthcare app. He knew someone who could develop the technology, and with this background in marketing and consulting, he thought they could make it work. He was excited as he dreamed of making big money and becoming like one of the huge tech startups with their fancy cars and houses.

Unfortunately, the business model never took off. Daniel spent $60,000-$70,000 of his own savings keeping himself afloat as they worked on the startup. He also invested so much of his time, deciding to abandon his career and focus on this venture. But after everything, the healthcare app floundered before it could take off. Here’s the short of what Daniel says went wrong with the business:

Conflicting ideas and work ethics - The team had a lot of discussions and meetings, and the business strategy changed constantly. However, nothing could be finalized and the app was never launched.
Lack of interest and passion - Daniel spent two and a half years of his life working to promote the healthcare app. He invested money and quit his other career for it. But he never loved what he was doing. He says that going into something he didn’t love was his biggest mistake.

22. Mike Ojo's Video Streaming Site Failure

Mike Ojo decided to start a subscription-based video streaming business like Netflix. The difference was that it would stream Nollywood instead of Hollywood movies. Since he had other successful startups under his belt, he had enough funding to start his new venture. He moved to Los Angeles, hired a team of employees, and launched the business.

But things didn’t work out as he expected. His business failed to gain the traction it needed and started losing money. He eventually had to close it, but not after spending so much to try to save it and ending up in debt. According to him, these are the reasons it failed:

High market competition - Mike’s business model required subscribers to pay to stream his videos. YouTube, however, allowed them to stream the same videos for free. This led him to lose his initial subscriber base.
High overhead costs - Mike hired a whole team of employees to help run his business. This made his overhead costs too expensive for what the business was earning.
Fund mismanagement - Mike used funds from his other businesses to try and save his video streaming startup. This resulted in him ending up in debt.

23. Sagar Shah’s 2 Business Failures

Sagar Shah was studying aerospace engineering at the University of Sheffield when he started his 2 businesses. He called the first one Vertisol. It was a business that aimed to help customers connect with rocket companies that launched small satellites. He called the second one Yeet Deal. Its mission was connecting diners with restaurants, increasing the number of both through deals.

Unfortunately, none of the 2 businesses took off. Vertisol struggled because rocket companies didn’t like being commoditized. Only one restaurant showed interest in Yeet Deal. Here’s what Sagar says caused his businesses to fail:

Insufficient industry knowledge and experience - Sagar had no experience in both the rocket and restaurant industries. He didn’t have firsthand experience booking a satellite launch. He also didn’t know much about the restaurant market. Lack of knowledge and experience led to failure.
Lack of a sustainable market - Rocket companies resisted commercialization. Restaurants weren’t interested in making deals with diners. These two factors led to a lack of a proper market for Sagar’s businesses to thrive.

24. Aaron of Coding Crow’s App Failure

Aaron of Coding Crow had a unique business idea. He was aware of the overemployed community and their ability to hold multiple 9-5 jobs simultaneously. His plan was to launch an app that catered to their needs and connected them with employers willing to hire them. From this idea, Overemployers.com was born.

Aaron had high hopes for his startup, but the overemployed community didn’t feel the same. The negative reaction to the app was one of the major reasons Aaron had to abandon the idea. Here’s a breakdown of the reasons his startup failed:

Failure to understand the market - Aaron’s market included overemployed people looking for additional jobs. However, the people already in the community disliked the idea of being trackable. They were afraid employers would use the app to find out that they were working multiple jobs. This lack of enthusiasm on the community’s part made the app suffer poor reception.
Insufficient market demand - Aaron’s idea was to connect the overemployed community with companies willing to hire them. However, companies were generally unwilling to hire people already employed elsewhere. This led to a very low demand for the business’s services.

25. Tom Shaw’s Mobile Ordering Business Failure

Tom Shaw started his business during the Covid-19 pandemic. Its mission was to facilitate orders from restaurants and convenience stores. He decided to create a platform called Kardlo that made mobile ordering easy. People could order food and other goods on the platform, and he would earn a fee from each order.

Initially, the business took off. It quickly got 2,000 users and earned £30,000 in revenue in only 45 days. However, after its first success, it began to decline. The business faced severe competition from better-funded competitors. After a struggle, Tom decided to close Kardlo. Here are the main reasons it failed:

Insufficient funding -Tom was a solopreneur in this venture, which meant funding relied on him alone. He struggled to keep up with better-funded competitors that had enough money to scale quickly.
Reliance on a single customer - Tom’s business relied solely on people who wanted convenient mobile ordering. This skewed view of the market led to the inability to understand its wider needs.
Slow progress - Because Tom lacked funding, he couldn’t grow his business as fast as his competitors. This caused him to get left behind and unable to keep up with market needs.

26. Khoo Kar Kiat’s Hawker Food Delivery Business Failure

At 33, Khoo Kar Kiat decided to quit his job and 8-year career to go into business full-time. His idea was to leverage food hawkers and vending machines. This unique plan involved a food delivery app that customers could use to get hawker food. Fastbee was born.

At first, Fastbee thrived. It operated 10 vending machines and got up to 800 orders per week. Its uniqueness set it apart from the competition. At one point, Kar Kiat said he thought he was on his way to winning the business park food delivery game. But suddenly, everything changed. Within only two years, his company folded. Here’s why:

Struggles with logistics - There were days when drivers didn’t show up for work. There were issues with the food lockers. All this led to deliveries arriving hours late. By then it was past mealtime, and customers were upset.
Struggles with investors - Angel investor funding required Kar Kiat to find 10 investors in 6 months. However, he couldn’t find the 10th one, and he was running out of money. When his last investor called to say the deal wouldn’t push through, he knew it was time to close.
Financial loss - Fastbee grew in size and accumulated expenses. Its profits were unable to keep up, and Kar Kiat found himself running out of money. In the end, he lost $200,000 when the business folded.

27. Angelica Torres’ Etsy Failure

Angelica Torres wasn’t getting any success selling her watercolor designs on Etsy. To improve sales, she decided to niche down. She started using Taylor Swift lyrics on the shirts she was selling. This caused a sudden increase in sales, and her business soon reached $6,000 in revenue.

But it wasn’t long before Universal Music sent her a copyright infringement notice. At first, she took down a few of her merchandise. She didn’t want to lose earnings from her bestsellers, however, so she continued selling them. After many copyright violation warnings, Etsy finally closed her shop down. Although Angelica was heartbroken about the loss of her business, she decided to move on to the next venture. According to her, here’s why her Etsy shop failed:

Failure to understand copyright - Angelica thought it was legal to use someone else’s song lyrics as long as the designs were her own. This failure to understand copyright law led to her business’ failure.
Quick success with a proper foundation - The allure of earning thousands of dollars made Angelica ignore her first warning. Although her store quickly rose to success, it wasn’t standing on solid legal ground.

28. Jamie Pride’s Employee Satisfaction App Failure

In 2016, Jamie Pride started a business called Refind. Refind aimed to help companies keep their staff happy and engaged. It rose quickly. At its peak, it acquired big-name clients like Coles and Qantas. In just 14 weeks, its stock price went from around 20 cents to 2 dollars.

But as soon as it hit the top, Refind began to decline. Its fast rise led to a similarly fast fall. Jamie had to let go of staff, and eventually he decided to close the business. Here are the reasons he states for his startup’s failure.

Instability - The company shot up with rapid growth in only 14 weeks. This volatility and quick expansion often leads to instability. It’s difficult for a company to sustain itself with such rapid growth. As fast as Refind grew, it also fell.
Market overvaluation or decreased investor trust - Refind’s stocks soared to 200 million in a few weeks. However, it declined just as quickly. The reason may have been that experts overvalued the stocks. It could also have been that investors lost trust in the stocks and decided to sell.

29. Caroline from My Freedom Empire’s Amazon KDP Failure

Caroline started an Amazon KDP business selling low content books. Low content books are books without much writing, such as journals and notebooks. The creator started out earning a nice side income. She earned around $500 a month from her coloring books.

But not long afterwards, she started to run into problems. Her account was flagged and then closed. She started another account, which was also flagged and shut down by Amazon. Here are the reasons she failed:

Low content books - Amazon closely monitors low content books. There’s a great deal of copying within that market, and Amazon values original creations over everything else. With journals and notebooks, it’s hard to stand out with original content.
Market saturation - So many people are selling low content books because it’s a quick and easy way to make money. The result is a highly saturated market that’s hard to enter.
Copying issues - So much of Amazon’s low content books are similar. This means they may have similar titles and meta data, even if authors aren’t aware they’re copying. When Amazon sees repeating meta data and titles, they flag the account.

30. Tayo Aina’s Handmade Goods Site Failure

Tayo Aina started an online business in 2012. He was still in college, but already business-minded. His idea was to create a website similar to Etsy. People could sell handmade goods on his platform, and in return he would get a small commission for every sale.

Unfortunately, Tayo’s site never took off. He started the business too early, well before there was a proper market for it. Also, he failed to gain the trust any business needs to succeed. Here’s a breakdown of the reasons for his failure:

Expensive products - Handmade products are beautiful but expensive. Tayo had a hard time finding enough people willing to spend cash for these products.
Unprepared market - Tayo started his business in 2012 in his hometown of Nigeria. At that time, buying things online was not the norm. People generally didn’t trust online commerce, so Tayo was unable to make sufficient profits.
Inexperience - Tayo’s online store was the first business he started. He was still in college, and had yet to learn valuable lessons about researching and implementing a good business plan. Fortunately, he learned from his mistakes and went on to start other successful businesses afterwards.

31. Alex of DefinedBy Alex’s Failed Print-on-Demand Business

At the end of 2019, Alex started a t-shirt business on Etsy. Her model was to create t-shirt designs, produce the t-shirts, and sell them. The print-on-demand business model allowed her to enter a business without high startup costs.

In the beginning, Alex was passionate about her t-shirt business. She invested in a Silhouette Cameo for vinyl cutting and a heat press. All her t-shirts were handmade DIY projects, and she was managing everything from production to marketing.

Soon, however, challenges began to sprout up. Alex was overwhelmed by running her business alone, especially during the pandemic. She also started a YouTube channel, which she loved doing more than making t-shirts. Not long afterwards, she closed her print-on-demand business. Here’s why:

Solopreneurship is taxing - Alex was managing her whole business, from product conceptualization to running Facebook ads. The high demand on her time and energy made it hard for her to continue the business.
Lack of passion - When Alex started creating content for YouTube, she realized that this was her true passion. She thus started to focus more on content creation. Eventually, she shifted her focus to YouTube and stopped making t-shirts.

32. Nicole Harness Print-on-Demand Amazon Failure

Nicole Harness capitalized on famous country star Luke Combs. She created tumblers with his image on them and sold them on Amazon. Soon enough, she started making sales. She earned more than $5,000 from fans of the popular music star.

But Luke Combs caught on, and Nicole found herself facing a huge lawsuit. She was sued for $250,000 in damages for using the star’s image for profit. Although she had earned thousands of dollars from her sales, Amazon froze $5,500 of her earnings. Here’s why her business failed:

Copyright infringement - Nicole failed to get a clear understanding of copyright law. This caused her to face huge consequences with her business model.
Frozen assets - All Nicole earned from her business was $380 from the tumblers. Amazon froze her $5,500, putting it towards her penalties. This made it impossible for her to recover and keep her business afloat.

Breaking Down Online Business Failure Rates

What Is the Failure Rate of an ECommerce Business?

The failure rate of an eCommerce business is 80-90%. There are many reasons for this, including poor user experience and customer service. Other reasons are ineffective marketing strategies, unresponsive website design, and poor site navigation.

This includes retail businesses, dropshipping, and Amazon FBA sellers. Dropshipping has a failure rate of roughly 85%, while Amazon FBA's failure rate is around 83%.

Why Amazon FBA Sellers Fail?

Unrealistic expectations
Unforeseen FBA hurdles
Spending profits too soon

Unrealistic expectations is the main reasons most Amazon FBA sellers fail. People hear stories of people earning 6-figures overnight, and they think they can easily replicate it. However, Amazon FBA requires skill and some luck to become successful. Unforeseen FBA hurdles like getting the freight or shipping company, finding high-quality products, and having enough money for ads also cause many people to fail. Spending most of the profits on ads is also the reason people like Paul Savage failed at Amazon FBA.

What Is the Failure Rate of a Content Creation Business?

The failure rate of a content creation business is 80-90%. 76% of marketers say content marketing generates demands and leads. However, competition is intense. There are 207 million content creators in the world, and it's difficult to stand out in the noise. Another reason a content creation business can fail is inconsistent or low-quality content. Also, inadequate marketing strategies and a lack of search engine optimization (SEO) knowledge.

What Is the Failure Rate of a Digital Marketing Business?

The failure rate of a digital marketing business is 80%. Yes, 68% of online experiences begin with a search engine. There's a high demand for digital marketing services. But it's not easy to find clients in a saturated and competitive market. 96.5% of pages on Google get no traffic at all, raising the bar for digital marketing services and making it hard for them to compete. There are other factors that cause digital marketing businesses to fail. These include poor quality content, poor website design and user experience, and failure to adapt to market changes. Underestimating the competition and a poor use of analytics also play their role in business failure.

Why Do Affiliate Marketers Fail?

Most affiliate marketers fail due to lack of knowledge of:

Affiliate programs terms and conditions
Local and international rules and regulations
Niche markets
Online marketing strategies
Creative content creation
Audience engagement

Affiliate marketing is an attractive industry which is worth over $17 billion. 20% of brands declare that affiliate marketing is one of their most successful channels, with 16% of all orders in the U.S. coming from affiliate sales. Unfortunately, 95% of affiliate marketers fail. Building an affiliate marketing business from scratch demands consistent hard work. But affiliate sites usually don't earn a cent for 6 months to a year. What's more, affiliate marketers need to have a deep understanding of SEO, search intent, and their audience. They also need to create consistent high-quality content over a prolonged period. All these make the affiliate business model so much hard work with slim chances of reward.

How Can Online Business Owners Avoid Failure?

Online business owners can avoid failure by:

Spending sufficient time doing market and target audience research
Growing a strong following on social media and other platforms
Investing in high-quality customer support
Building a functional and attractive website
Focus on quality and value to customers
Continuously innovating and improving

Planning and research are two main ingredients in building a successful online business. Choosing which venture to enter into (affiliate marketing, content marketing, etc.), is also crucial. Picking a saturated market or one mismatched with your skills can lead to failure. Also, it's important to understand your audience and build a website that attracts them. There are 1.13 billion websites in the digital space today, and standing out is a big challenge. It's essential to beat the challenge by knowing what it takes to stand out in the noise.

Which Online Business Has a Low Rate of Failure and High Profit Potential?

Local lead generation is an online business that has a low rate of failure and high profit potential. A local lead generation website requires low investment because all you have to do is create and host a website. If you build several of these websites, you have the potential to earn over $50,000 in monthly passive income.

This business model works by creating websites targeting a specific service business (such as plumbing, towing, or tree trimming) and ZIP code. Once your digital assets are ranking on Google, you can rent them out to actual local businesses for $500 - $3,000 a month. Service businesses are willing to pay these amounts because they need leads, and a ranking website can generate leads on autopilot.

Local lead generation also has low competition because there are hundreds of different service businesses and over 40,000 ZIP codes to choose from.

Follow Me

Ippei Kanehara

Founder/CEO

$52K per month providing lead generation services to small businesses

Ippei.com is for digital hustlers, industry leaders and online business owners.

His #1 online business recommendation in 2024, is to build your own lead generation business.