6 Tips To Buy an E-Commerce Business

By Ashutosh Jha → Last Updated on Thursday, January 18, 2018
Nowadays, more and more people are interested in buying an ecommerce business. However, not many know that although it seems easy on the surface, things are not always as clear as they seem, because every business has its issues. With that in mind, our goal is to offer some tips to help purchase an ecommerce store.

6 Tips To Buy an E-Commerce Business
That being said, the following tips are not a complete list of steps to follow, as you should seek guidance from experts before purchasing a business. Therefore, we intend to provide a few tips that we typically give to those who want to walk this path.

6 Best Tips to Buy an E-Commerce Business which will result to be profiatble

Let's start and see what all factors and tips you should consider while buying any business. Although these are not the only tips you should check and look if that is the perfect niche for your plans. Sometimes a profitable business for someone else may or may not be equally profitable for you and so you should do end to end analysis.

1. Stick to the facts and avoid sales pitches that sound too good to be true

When dealing with an e-commerce business or any business for that matter, skip to the facts, the real figures and ignore those well-advertised sales pitches from owners which are usually full of promises: "I did not truly invest a lot of time and effort into...but if you did, you could double your income".

If that was true, the seller would have done it themselves. It is never a good idea to buy something based only on someone’s words and not do your own research and calculations beforehand.

2. Discover why the business is for sale

There are many reasons why a person wants to sell a business. Some want to retire early, others want to pursue another career. Do your research and find out why it’s for sale because there are many business owners who want to get rid of a worthless online business for a shockingly large amount of money.

Why Business is for Sale?
Nobody will sell a profitable business and give a shady reason as to why they want to sell it, so be mindful of the owner’s reasoning as to why they are selling their business.

3. Establish if sales are sustainable

When buying an online business it is necessary to determine if the supply and demand ratio is sustainable and if the niche can survive the test of time. Take a yo-yo business for example — in UK every now and then the yo-yo craze appears and people make a fortune from selling it to enthusiastic kids.

Unfortunately, like most trends, it dies off and so does the whole business along with it.

4. Check up on suppliers and make sure they’ll support you

Suppliers are hard to keep, so if you buy a website from a salesman that doesn’t necessarily mean the supplier will continue to support your business. Bear in mind that a written agreement from suppliers is the best solution there is to make sure they will continue to support you.

6 Tips To Buy an E-Commerce Business

5. Understand where web traffic conversions come from and how much they cost

In order to ensure a successful online business acquisition, you must understand web traffic sources and how much they cost. Check out which kind of traffic source suits your business and how much it will cost, because some websites rely on paid traffic which can reduce your margins while other sites depend on traffic via a search engine.

Discuss the site with an SEO advisor and have them look over the backlink portfolio in order to avoid penalties that can interrupt your future sales.

You can use an online marketplace like Exchange by Spotify to find if the numbers are real because this platform automatically generates the listing based on their real store data.

6. Ignore GMV (Gross Merchandise Volume) numbers and concentrate on profit

GMV refers to the total volume in the currency of sales over a certain time period on an e-commerce website. It is a common practice for salesmen and brokers to push forward the turnover figure in order to impress you, but the turnover rate is not reliable.

You need to get down to the details and see for yourself how much profit the store makes considering all fixed costs that were made.

In the end keep in mind you should be cautious and always ask the questions that you think are necessary. This way you can ensure that the investment will be a success.
Ashutosh Jha

Ashutosh Jha is a professional blogger, Blog and IT Consultant. He writes about Blogging, SEO, Making Money, Internet Marketing and Web Design.
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