5 Main Reasons for Low Sales in Your Online Store

What makes business owners wake up in the middle of the night, check analytics, change advertising campaigns, and search for culprits? The reasons for low sales.

If your online store isn’t performing well, the issue likely lies elsewhere .

When a category manager believes they’re doing everything right, but sales remain low, it’s time to address potential issues. The sooner, the better. Every day spent in this state is a day of lost customers and revenue.

In this article, we’ll explore the common mistakes that lead to a drop in sales and provide practical solutions for category managers to turn the situation around.

Contents:

The Main Reasons for Low Sales

Poor Interaction Between Marketing and Category Management

Inappropriate Assortment

Pricing Mistakes

Weak Online Merchandising

Ineffective Promotions

How to Identify the Reasons for Low Sales

The Main Reasons for Low Sales

We won’t be covering the obvious reasons for low retail sales, such as issues with the website, loading speed, UI, navigation, or the order form. There’s already plenty of information available online about these topics. Instead, we focus on the aspects that category managers can directly influence.

Reason #1. Poor Interaction Between Marketing and Category Management

One of the most common yet overlooked reasons for low sales in online stores is the lack of alignment between marketing and category management. When these two departments don’t collaborate effectively, it leads to missed opportunities in strategy execution and a disjointed customer experience. Marketing may push campaigns that don’t align with the products category managers are focusing on, or vice versa, leading to inconsistencies in messaging and targeting.

The solution lies in fostering stronger communication and collaboration between marketing and category management. Both teams should be on the same page about goals, product priorities, and customer insights. Regular meetings to align marketing campaigns with product availability, promotions, and sales data can help ensure a seamless, customer-focused strategy. When marketing and category management work together, the store can see more targeted campaigns, better product positioning, and ultimately, higher sales.

Reason #2: Inappropriate Assortment

Assortment policy is the foundation of any business because it dictates whether customers will find what they need or turn to competitors. Mistakes in managing the assortment can undermine all other efforts made by the team. Even the most effective marketing will not save sales if the online store faces issues with its product range.

This problem often manifests itself in the absence of trendy products. For example, when the target audience of an online electronics store is searching for the latest model of a fitness ring, or when customers of an online toy store are eager to buy the newest collection of squishes, but these products are missing from the assortment.

When a store is late in introducing popular items, customers will inevitably seek them out from competitors.

Another common issue is the ineffective management of product availability. Items may be in your catalog, but they’re out of stock, unavailable for order (Out of Stock), or only have limited availability (for instance, just one size or color of clothing or shoes).

Solution

A category manager can leverage competitor digital shelf analysis to spot gaps in their assortment and uncover potential growth opportunities.

With Pricer24’s Assortment Analysis, you can:

Automate the process of gathering information on product availability across different market players

• Track changes in competitor assortments over time
• Monitor the introduction of high-sales potential new products to the market
• Identify gaps in your assortment by comparing it to competitors’ offerings and quickly replenish it with popular or in-demand items
• Maximize sales of exclusive products unique to your online store (for example, by launching attractive promotions or adjusting pricing)
• More effectively manage inventory and ensure better product availability in your assortment
• Track emerging trends and respond promptly to competitors’ actions

With real-time access to market assortment data, category managers can more accurately determine the reasons behind sales fluctuations, identify growth opportunities, and create unique offers.

Reason #3: Pricing Mistakes

Incorrect pricing is a major contributor to low sales. When an online store fails to track competitors’ prices, it often results in two extremes: prices that are too high or too low, both of which can lead to poor sales performance.

In both cases, a business loses customers, profits, and its competitive edge. Overpricing drives customers away as they find cheaper alternatives while underpricing leads to lower profits, with the store selling a lot but earning little.

Common Causes of Pricing Mistakes:

• Lack of Systematic Competitor Price Analysis: According to our survey, 39.4% of e-commerce professionals only collect competitor pricing data on a situational basis, when a specific problem arises. Without a systematic approach to monitoring competitor prices, category managers struggle to react quickly to changes, often overlooking competitor pricing strategies and market trends.
• Failure to Monitor Supplier Prices: If an online store purchases products at higher prices, this automatically leads to higher prices for the end consumer. As a result, the store loses its competitive edge against market players who source products at lower prices and offer more attractive deals.
• Prices That Are Too Low: On one hand, excessively low prices can raise doubts about product quality, especially in categories where brand reputation is crucial (e.g., electronics, cosmetics, branded clothing). On the other hand, low prices may temporarily boost sales but erode profitability. A store may sell many units but still fail to turn a profit due to low margins. Moreover, consistently violating MAP/MSRP can lead to penalties from suppliers for not adhering to the brand’s pricing policy.
• Slow Product Repricing: If an online store cannot adjust prices quickly in response to shifting demand, competitor actions, or seasonal trends, it risks losing customers due to uncompetitive pricing. The challenge here is that even if you have just a few key competitors, manually tracking their prices and changes in real time is almost impossible.

Solution

Automate Price Collection

The Price Crawler Tool acts as a price scout, scanning competitor websites and matching product pages with your SKUs. The Price Scraping Tool regularly “visits” sites to gather competitor pricing data.

Additionally, Pricer24 can automatically collect partner data from B2B portals, supplier price lists from emails, online spreadsheets, and Excel files. The tool generates structured reports by unifying disparate data sources, allowing category managers to identify the most profitable purchasing options.

Price Analysis

Once the data is collected, it is visualized in customizable reports, allowing you to tailor the analysis to your needs. Key features include:

• Price Comparison: Compare your prices with competitors, whether by individual products, categories, brands, or segments.
• Price Tracking: Monitor price fluctuations and analyze the history of product prices over a selected period, enabling more informed pricing decisions.

Automate Product Repricing

Pricer24’s dynamic pricing automatically adjusts product prices based on predefined rules and factors (such as competitor prices, margin, and other key variables), enabling you to respond to market shifts and maintain an optimal pricing strategy. For a real-world example, check out our case study on scaling sales.

Reason #4: Weak Online Merchandising

Another common reason for low sales in retail is poor online merchandising. Imagine walking into a supermarket and seeing chaos on the shelves: products without price tags, packaging without descriptions, and staff unable to answer basic questions. The desire to buy quickly disappears. The same thing can happen in online stores.

Product pages that lack key details like product characteristics, detailed descriptions, high-quality photos, and engaging content (such as video reviews, 3D models, or infographics) are weak and unappealing. Even the best products won’t drive sales in a competitive environment without effective, visually attractive presentations.

Reviews and ratings also play a critical role. Shoppers crave social proof—they want to see that other customers have purchased and are satisfied with the product. Positive feedback builds trust and drives conversions.

Solution

To prevent weak online merchandising from undermining sales, it’s essential to constantly optimize content and actively manage reviews. Properly “packaging” your product content will immediately capture the interest of visitors, increasing the likelihood of a purchase.

Beyond improving your online merchandising, it’s equally important to understand your competitors’ strategies. Pricer24, for instance, helps you analyze which products dominate competitors’ search results, which have the most reviews, and which have the highest ratings. This insight allows you to identify the products your competitors are actively promoting and adjust your marketing and product promotion strategies accordingly.

Reason #5: Ineffective Promotions

Promotions and discounts are essential for driving sales, but when mismanaged, they can backfire. Two key mistakes often lead to poor performance:

Failure to Monitor Competitors’ Promotions

Imagine your best-selling product, Product X, suddenly sees a sharp decline in sales. Upon investigation, you discover that a competitor launched a promotion on a similar item, and your customers have switched. The issue is that you didn’t track your competitors’ promotions in time to respond.

Without real-time monitoring, it’s easy to miss promotions that your competitors are running—discounts, free shipping, or other incentives—that make their offers more attractive while yours remains static.

Lack of Understanding of Effective Promotions

Another issue is not being able to determine which promotions are driving sales. As a result, you may either offer irrelevant or ineffective deals, failing to capture customers’ interest, or you may over-discount certain products, eroding your profit margins. This leads to either a missed opportunity to drive sales or unnecessary losses.

Solution

To avoid these mistakes, you need to consistently track competitors’ promotions, understanding which products they’re promoting, the discounts they’re offering, and their overall strategies. This allows you to adjust your promotions quickly to stay competitive. Pricer24 provides real-time insights into competitors’ promotions, helping you stay ahead and make data-driven adjustments to your offers.

How to Identify the Reasons for Low Sales

Low sales are often the result of multiple underlying factors that aren’t immediately obvious. However, when you prioritize comprehensive market and competitor analysis, pinpointing these reasons becomes much easier.

Here’s how to identify the causes of low sales effectively:

1. Analyze Key Indicators: Every drop in sales has a cause. To identify it, focus on key metrics such as sales dynamics by category, SKU, or brand, conversion rates (CR), return rates, and average order value. Anomalies in these data points can reveal the root of the issue.
2. Monitor Competitors’ Prices, Assortment, and Promotions: Regularly compare your prices, assortment, and promotions with your competitors. If sales are down for a specific brand, it might be a sign of price misalignment or stronger competitor offerings. Analyzing the competitive landscape helps identify such problems before they escalate.
3. Evaluate Your Assortment: Assess whether your assortment has gaps—are there missing top-sellers, seasonal products, or an excess of unprofitable items? Ensuring a well-rounded product offering is critical to meeting customer expectations and driving sales.
4. Track Pricing and Promotions: Even small price fluctuations can significantly impact sales. Compare your prices to the market average, check for margin issues, and assess whether your promotions are effectively driving sales. It’s essential to balance attractiveness with profitability.

FAQ

What causes low sales?

Low sales can be caused by poor assortment, pricing errors, weak online merchandising, or ineffective promotions.

How can I identify the reasons for low sales early?

Regular analysis of the market, competitors’ assortment, pricing, and promotions helps spot problem areas quickly, allowing you to address them before they lead to significant sales loss.

Can poor assortment contribute to low sales?

Yes, an inappropriate assortment, such as missing popular products, can drastically reduce customer interest and conversion rates.

How does pricing affect sales?

Incorrect pricing—whether too high or too low—affects demand and margin. Regular competitive price analysis helps avoid these pitfalls.

How can I optimize online merchandising to boost sales?

Improving product listings with high-quality photos, descriptions, and reviews, along with proper display on digital shelves, can increase conversion and sales.

Can ineffective promotions cause low sales?

Yes, poorly planned or weak promotions, based on limited data, can significantly harm sales. Analyzing competitor promotions helps you refine your strategies.

How does Pricer24 help identify the causes of low sales?

Pricer24 allows you to track competitors’ prices, assortment, promotions, and product card quality, enabling category managers to quickly identify issues and implement corrective actions.