Why do many traditional business owners lose three to five million yuan when they start transitioning to e-commerce? There are two pitfalls that 99% of people have fallen into!

Losing money in business is fine, the problem is losing it so "justifiably"! Many traditional small business owners step into...E-commerceThey were brimming with confidence, thinking, "If I sell so well offline, it will definitely be easier online." But what happened? Three months of passion, six months of anxiety, and a year back to square one.

The pitfall of e-commerce, to put it bluntly, is not that people don't know how to do it, but rather that they "think too much about it."

I. Stream Feeding: The "Sweet Trap" of Algorithmic Feeding

At first, the small business owner found that advertising was incredibly useful!

The backend data was soaring, with more clicks, more add-to-carts, and more sales. I felt like I was on steroids.

Algorithms are things that specifically understand human nature.

It gives you a taste of success first, making you mistakenly think, "Wow, this business is taking off!"

So the boss waved his hand and said, "Add some more budget, let's go for it!"

But once the data stabilized, they realized—the profits were gone. Advertising costs were skyrocketing, and the more expensive the traffic, the lower the ROI (return on investment).

Those seemingly "explosive" data points are actually the result of the platform "raising fish"—you are that fish.

To put it simply, gambling is like a casino, where the house always wins.

The algorithm knows when you're excited and when you want to try again. You think you're in control, but you're actually just being led by the nose by the algorithm.

II. Inventory: Sentiment is the most valuable, illusion is the most damaging.

The biggest problem with traditional business owners is that they have too much faith in their products.

Decades of offline experience have instilled in them "product confidence"—"I've been selling this product for over a decade, and customers all praise it; it's sure to be a hit online too."

As a result, once they started stocking up, it filled an entire warehouse.

But e-commerce is not offline; the target audience, channels, and pace are different. Offline, you rely on word-of-mouth from regular customers; online, you rely on algorithmic exposure.

Sometimes a product becomes popular because the algorithm gives it traffic; sometimes it doesn't become popular because no one can find it in search results.

This led to a classic tragedy: initial orders surged, leading to an over-stocking of ten times the normal inventory, only to have the algorithm suddenly reverse course, causing sales to plummet. Warehouses were overflowing, cash flow was severely disrupted, and factories were still waiting for payment—the entire supply chain collapsed.

Just like dating, you might think that if she smiles at you today, it means she likes you; but actually, she's just being polite.

Third, traditional thinking: treating e-commerce as a "new channel" resulted in being exploited.

Many business owners think that e-commerce is just about changing where they sell their goods, but it's actually a game of "changing their mindset".

Traditional businesses emphasize "resources, connections, and relationships," while e-commerce emphasizes "algorithms, content, and data."

When a traditional business owner spends hundreds of thousands of dollars to hire an "e-commerce team" and expects them to "achieve results quickly," it's like pinching a sapling and shouting "grow taller quickly"—it's pointless to rush them.

Operations are not magic, and algorithms are not a panacea.

As the saying goes:Good operations can amplify a good product 100 times, while poor operations can amplify it 10 times and still result in losses.

Truly impressiveInternet marketingOperations professionals rarely work for others—they prefer to do it themselves. Finding a partner who truly understands operations is harder than winning the lottery.

IV. The "Poison Effect" of Explosive Orders: Sweetness Comes Quickly, Death Comes Quickly

Many small business owners are not most afraid of not being able to sell, but rather of "suddenly selling too much".

A surge in orders is like a sugar-coated bullet; once you've tasted it, you'll become addicted.

At first, I was so busy my hands cramped, packing and shipping for days and nights, feeling like I had won a great battle. But once the hype died down, inventory piled up, returns skyrocketed, customer service collapsed, and cash flow dried up, and everything came back to square one.

A surge in orders is not success; it's an "illusion."

True e-commerce masters never pursue explosive growth, but rather "stability." Stability means ensuring monthly profits, preventing the supply chain from collapsing, and making sure advertising spending is transparent and cost-effective.

Just like a master chess player, they look at ten moves ahead, not just the immediate thrill of the move.

V. From Losses to Stability: E-commerce is Actually a "Traditional Business"

To put it bluntly, e-commerce has now become a "traditional industry".

In the past, everyone competed for traffic; now, the competition is for "omni-channel management."

Multi-platform product distribution, content seeding, shelf monetization, onlinedrainageOffline operations, inventory cycle calculation, supply chain collaboration...

This is no longer a question of "whether you know how to operate a business," but rather "whether you are a person who truly understands business."

To survive in e-commerce, you don't need tricks, but patience.

Good products + good supply chain + stable mindset – that's the golden triangle.

You don't need to chase after a surge in orders. As long as you make a little money with each ad, your inventory keeps moving, and every customer comes back for repeat purchases, then you've won.

To put it bluntly, e-commerce is just an "old play" on a different stage. The audience is changing, the script is changing, but the actors—have to learn to change their lines.

Conclusion: E-commerce is not a passing fad, but a journey of self-cultivation.

Many people who do e-commerce are focused on traffic, but forget to see their own path clearly.

True e-commerce isn't about playing a game of algorithms; it's about understanding human nature. You need to understand consumers' hesitation, the "greed" of algorithms, and also know when to "cut your losses."

Be rational in your investment strategy, control your inventory levels, be cautious about excessive orders, and have a long-term vision for your business.

When you learn to treat every loss as "tuition fee" and every conversion as a "signal," then you have truly evolved from a "traditional small business owner" into a "new business player."

Final summary:

1. Streaming is a technical skill, but even more so a psychological battle. Algorithms first offer incentives, then reap the rewards.
2. Inventory is a trap, and blind confidence is the most harmful.
3. A surge in orders is poison; it brings temporary sweetness followed by three years of bitterness.
4. A good product is the underlying logic; operations are just a magnifying glass.
5. E-commerce is not a passing fad; it's a long-term endeavor.

Learn to calculate first, then learn to read minds. Understanding data and maintaining a steady pace are the keys to becoming a true winner.

The ultimate secret of e-commerce lies in steady growth, not explosive growth.