How to Buy an eCommerce Business
One way you can become a successful internet entrepreneur is to buy eCommerce business for sale
Buying an existing eCommerce business for sale is one way you can avoid the challenges that go with launching a new eCommerce brand.
Yes, becoming a successful internet entrepreneur takes much time and effort. You have to know which of the eCommerce brand to select and how to vet them. Besides, raising the money and the web development skills needed to launch a new one is a herculean task on its own.
Fortunately, website marketplaces and brokers that cater to such needs have become more prominent in recent years. So, it’s now easier to buy online eCommerce business for sale while revealing more affordable options. That means you can buy an online eCommerce business for as low as $300, and up to $10M.
Why Buy Ecommerce Business For Sale?
Below are the core reasons why you should buy an eCommerce business
- A proven and reliable business model
Oftentimes, businesses or entrepreneurs that want to get into a popular niche such as online skincare business are not always sure where or how to go about it, not to mention beating the competition to be at the top.
Acquiring a premade and successful eCommerce business is a great way to start strong and achieve an early foothold in your target niche.
Here, the keys rest on the ‘proven’ business model. The business has differentiated and proven itself to be a reliable and profitable venture. It has an already established base of traffic, customers, and suppliers. Above all, it has gained much from someone else or some other business taking all the risk over the years.
- Cross-Selling Potential
For a business owner that owns an eCommerce business in the same or similar niche, buying an existing eCommerce business for sale can translate into massive cross-sell capability. Cross promotions have paid many online business buyers in significant returns—from email lists to targeted competitive discounts—as a way of moving customers/clients between both platforms.
- Gain a strategic and informed advantage
The internet as we know it is one innovative, wonderful, and weird place for making a lot of money. Thus, it’s not unusual to come across businesses in the market that has a unique feature about their brand and business model that buyers are keen to purchase for a strategic purpose.
One of the reasons why investors acquire eCommerce businesses is to gain a strategic advantage in the areas of suppliers, customer relationships as well as warehousing contracts.
- To beat the hard work
As stated earlier, one major reason why you should consider buying an eCommerce business for sale is that it offers a cheap method of getting around the hard work in building a great business. You will become less bothered by doing things like setting up ads, keyword research, site development, SEO, finding suppliers, customer service, etc.
7 Practical Steps To Buying A Rewarding Ecommerce Business For Sale
Here are the best-laid practices for buying a good eCommerce business. Stick to them and the banks will be your friend.
- Focus mainly on profit, not revenue
Don’t be distracted by the plethora of digits you’ll find in a company’s revenue list. In eCommerce, the revenue stream is a huge misleading factor.
While revenue provides info on a company’s total income, it doesn’t cover the cost. In other words, a company that sells costly products may have a mouthwatering revenue stream yet doesn’t make much money.
Hence, you should focus mainly on profit. That is the cash that remains after operations. Get a profit & loss account statement from the seller to see the figures by yourself.
- Remember to research traffic sources
The traffic that a site or page gets goes beyond measuring just the amount of people that visits it. It shows the business’s SEO strategy—how healthy and effective it is in their marketing campaigns.
Try to determine how much of the eCommerce business traffic is derived from paid Ads and see if it suits your plans in terms of Return On Investment (ROI). If the business is spending too much on marketing, sustaining their traffic target/numbers may not be realizable. But if this is one business you don’t want to miss out on, you may want to consider hiring an SEO expert to review the site’s backlink portfolio and see if there is room for improvement.
Otherwise, move on, friend.
- Only choose a niche you’re familiar with
Niche targeting is golden even as eCommerce has become more specific and personalized. The only way you can reap the full potential and benefit of niche marketing is to understand its world—the people you’re dealing with. The best way to do that is to stick to one niche instead of a general one.
When choosing a niche, consider the variables like the market size and easy accessibility. You may want to check out these tips for more help in choosing the right niche.
- Vet the eCommerce site and their social connections
Would you buy a car without first taking it on a test-drive? The same goes for buying an eCommerce business.
Visit the site of the online business you want to buy. Just poke around it. Think and act like your target customer/client and from that mindset, try to picture what impressions they would make out of the business in the areas of design, style, pricing, page loading speed, navigation, overall usability, etc. While there, take your time to check if the seller’s information is correct. If none of these appeals well to you; don’t think it would mean well to your target customers as well.
Another area you must take into consideration is the business social media accounts. Check if the numbers stated matches the target customers. Although it’s uncommon, some sites sometimes try to scam unsuspecting buyers. So, keep an eye for bot accounts.
- Check out the logistics—shipping, suppliers, etc
Acquiring an eCommerce business involves a lot of legal hurdles. Do not rush to finalize anything. Double-check and be sure that the business you’re buying can run and will continue to run exclusively under your ownership. That includes software licenses, affiliate programs, shipping arrangements, and rental spaces, especially suppliers.
Critically consider the position of your suppliers. See if they have (and some do have) “selective distribution contract/agreement” in place. This can restrict or limit whom they’re obligated to supply. While this is not something that occurs always, it’s still worth considering. Otherwise, you may end up losing your newly acquired store’s best-selling item/product.
- Find out why the business is up for sale
This one is a no-brainer. Ask and find out why they’re selling the business. It’s that simple. More often than not, there are no genuine reasons like they want to switch to something different or that the seller is aged and retiring. Sometimes, you might learn the truth from the seller that there is a shortfall, which can only be fixed with the resources under your ownership.
However, in most cases, someone may be trying to goad or deceive you into buying a fraud. So, if you can’t fathom any genuine reason why the seller should put the business up for sale, just take a walk.
- Ask yourself if there is anything you can improve
Do not rush to buy an eCommerce business without first coming to terms about what you would like to achieve with it. Ask yourself how you could really improve it.
Cone to think of it; who would want to sell a business that’s working flawlessly? Therefore, it’s most likely that when buying such businesses, you’ll need to fill up a void, and it’s much better that you know what void to fill from the beginning so you can correctly predict how feasible and profitable it will turn out to become if you venture into it.
Nevertheless, if after you have perused it and still can’t find any room for improvement…consider yourself one lucky son-of-Adam. It’s rare, but it does happen.
So, we’re rounding up our tips on how to buy an eCommerce business for sale. It is something you should seriously consider doing if you want to become your own boss in the 21st century. The process is challenging for first-timers, but with the above tips, even the sky can’t be your limit to the success that lies ahead of you.
Of course here at Ecommerce Brokers we help with the buying and selling process. So if you are looking to buy an online business feel free to contact us for a call to chat about your buying criteria and we can send you a few interesting deals to take a look at.
Think we’ve missed something or do you have a better suggestion? Don’t forget to leave a comment or drop your questions below.