Sep 20, 2022
What to Look for When Buying an Ecommerce Business in 2023
If you are buying an eCommerce business and want to know what the benefits are and what to look for then this article is for you. In this blog post, we've identified 5 critical areas to check for when purchasing an online business.
Most people today tend to purchase products and services online. It saves a lot of time and it’s convenient. And it goes both ways. The internet makes doing business faster, easier, and more efficient. So it’s a win-win for everyone. With the presence of the COVID pandemic and changing consumer shopping habits, the e-commerce sector is growing and it shows almost no signs of slowing down. It makes sense to want to set up an e-commerce store but the e-commerce industry is more competitive than ever. A high level of product differentiation and low barriers to entry makes selling online so appealing to many entrepreneurs. Starting a new online business from scratch can be time-consuming but it is totally worth it.
However, there’s no guarantee that your online business will succeed. And what if you don’t have time? You can buy an existing business that is already working and generating cash flow, an eCommerce business that already has a nice product selection, loyal clientele, and a proven track record. The type of business with room for expansion and in a niche that interests you the most.
So, do you want to know more about the benefits of buying an existing eCommerce business?
Do you want to know the difference between a successful online business and an unsuccessful one?
Here’s what we’re going to cover:
- What are the main advantages of buying an E-commerce business?
- 5 things to look at when buying an E-commerce business
Before you buy an e-commerce business, you need to know why people prefer buying over getting an e-commerce business off the ground.
What Are the Main Advantages of Buying an E-commerce Business?
As we’ve told before, starting an eCommerce business from zero can be challenging as most start-ups fail. Buying an established eCommerce business seems like a great idea.
Skip the Startup Phase
The groundwork to get your online business up and running has already been done. You don’t have to write a business plan, spend hours on market research, negotiate with investors and wait for them to answer you, design your brand’s logo and worry about the colors not being right. Many of the issues have already been identified and resolved.
You Can Sell from Day One
When you purchase an existing e-commerce business, there should already be a marketing strategy and business plan in place. With a good marketing plan, you will achieve your sales goals and once the business plan is in place, you can start getting money from day one.
The previous owner negotiated deals with suppliers, added products to your online shop, and brought in the consumers. As if that’s not enough, you get a valuable network of business contacts. The right business contacts are important to the development of your eCommerce store. They can help you make new deals, reach new opportunities and strengthen your brand reputation over time.
You Inherit the Employees
Buying an existing business means you get team members who already know what they are doing. The team members who would normally need to be hired or filled out by you are usually already there. So, it saves your time and you should be able to draw on the experience of current staff. Plus, they are an important link between you and your customers.
Now that you have a good understanding of all the benefits of purchasing an eCommerce business let’s have a look at some of the most important things you need to consider.
5 things to look at when buying an E-commerce business
1. Your E-commerce Store’s Traffic Matters
Having an eCommerce store that already has traffic can help you start selling online faster. That’s why one of the first things you should check when buying an online business is website traffic. Your website traffic plays a significant role in the success of your eCommerce store. The more people view your online shop the better.
You really would want to know where your most converting traffic comes from and how much it costs. Not all traffic is the same. Some come through search, some come from recommendations from other websites, and others come from paid search networks.
How do you find out how much traffic your webstore gets? You need to use a reliable tool like Google Analytics. It helps you analyze and track your website traffic.
You should concentrate on each individual traffic source as soon as you get a better understanding of how the traffic is performing. Analyze the main traffic sources, which are typically referrals, social media, and search.
For example, if your traffic comes from search, you just can’t ignore search optimization (SEO) for your eCommerce business. If you already have an SEO specialist on your team, it is a huge benefit to your company.
If your company is doing well in the search results, start looking at what keywords it is ranking for and how much of the store's overall traffic those phrases are bringing in. It's essential that you consider the quantity and quality of links coming into the store.
2. Knowing your Suppliers and Deals
Before buying an eCommerce business, it is crucial that you understand the connections your previous owner had with their suppliers and how they interact with your business. Review all the paperwork. You need to know what these supplier agreements are, and what the terms are. You don’t want to learn that supplier gave a seller a wonderful deal only for them to hike the prices after the purchase. You don’t want to rearrange contracts but it’s not always like this. The good news is suppliers are more than happy to work with the new owner.
You should also find out how dependent the previous owner was on a single supplier. Relying on one supplier could be a disaster for your online business. You also need to know if the suppliers are replaceable because sometimes it’s better to switch them because they may not be giving the service you want. That’s why you need to purchase a company with a low reliance on a single supplier.
The more suppliers you have, the better. You will be able to solve the problem with supply disruptions. You won’t run out of stock. Moreover, the competition gives suppliers a great incentive to make prices appealing and improve the quality of service.
3. Web Presence is a Must
Having a social media presence is crucial for the success of your online store. It can boost the organic traffic you receive through search traffic. Your customers can learn more about your company and the products you offer. You should look up the company on social media to see how active it was. Simply being present on social media isn’t enough. You should post regularly. But remember this you don’t need to show up on every social media platform. Trying to be active on every single platform is counterproductive. It can be overwhelming and it can harm your brand reputation. If your targeted audience isn’t using social media platforms like TikTok or Snapchat, you don’t want to waste your time posting on those channels.
Social media is something your company can’t live without. You need to engage with your audience, respond to all social media comments, conduct polls, and remain true to your brand. Social media can act as social proof and it is a strong ingredient for marketing. You can embed social media testimonials on your eCommerce website. You can also include customer-created photos and videos to improve your brand image and increase sales.
For example, Lexus used Instagram to bring more attention to its brand as it showcased pictures of their happy customers. They launched a great hashtag campaign #lookatmylexus.
Moreover, you might want to build an email list. It is essential to your success. It can help you build your customer base and increase your revenue. It also means you own your email list. With Facebook, Twitter and Google it’s impossible. They often change their policies. Besides your email list doesn’t depend on the decisions of other businesses. But that’s not all as you can effectively connect with your customers and talk to them one-on-one.
If your newly purchased company doesn’t have a social media account. It makes sense to create one or two.
4. Ecommerce Website Design is the Foundation of your Brand
When looking at a prospective E-commerce website, you need to pay attention to its design. It has the power to affect how your potential customers see your brand. A beautifully made website can help you attract more traffic to your website. More traffic means more leads and more of the right customers. It can also help you boost your sales.
Leaving a good first impression is paramount to you as an eCommerce website owner. People” will judge the book by its cover”. It will give you a solid foundation for building positive relationships with prospective customers. Every element of your website from the contact forms to the product photos has the power to influence your customer’s decision to make a purchase. Use high-quality images, because we are visual creatures and we buy emotionally. You need to showcase your store to its fullest and check every section of your website. You should make your homepage understandable for everyone. Anyone visiting your website should be able to find what they're looking for upon landing on any page.
Make sure these elements of your website are visible:
- Menu Bar
- About Us Page
- Contact Us Page
- Search Bar
- Return Policy Page
An effective website means appropriate colors, photos, videos, themes, graphics, and the use of white space. Your call-to-action buttons must be clear. In addition to that, your social media buttons must be clickable. And don’t forget to keep it simple. Pop-ups galore, banner advertisements, and too many colors can distract your potential buyer from making a purchase. You need to keep your web design minimalistic but at the same time exciting.
Website readability matters in your eCommerce business. It applies to everything, from landing pages, pricing pages, and service pages to blog posts. The easier your text is for reading and understanding the better. Pay attention to color contrast. The right one makes all your texts visible. Use headers and make your sentences shorter. They are easier to understand.
You should also analyze your competitors’ websites to see what are they doing well or bad. If your online store’s design needs some improvement, it’s better to call a professional web designer.
Always keep your customer in mind. It will allow you to provide the best user experience. Putting in the time and effort to get your website right you make your customers feel special and make sure they feel cared for.
5. Your Online Store Should Have a Blog
To prosper your modern online business, you need to have a blog. Nowadays people will likely think twice before buying something online from brands they don’t know. This is where the blog comes in. It helps you promote your products and services, increase brand awareness and improve your search engine optimization. As if that’s not enough, with the help of the blog you can gain consumer trust. Blogging can help you increase both conversions and leads. And it’s a free marketing strategy.
However, it’s not easy as it sounds as it takes time and effort to make your blog shine. You should always remember that quality always surpasses quantity. It would be too much work to write an article every two days. You would want to avoid burnout as a writer. Writing good quality posts is what matters most. You also tell your consumers that you are much more than just selling products.
Buying an established e-commerce business is equally exciting and risky. Whatever the size of the business you’re buying, there’s a chance that you could lose money. Even though buying is easier than building your online business from scratch.
You need to make research whether the company is worth paying for and could bring in more money. By using the information in this article you would be able to see the difference between a successful e-commerce company and an unsuccessful one. By buying an established e-commerce business you could also profit from the success of the previous owner. There’s always room for improvement and it definitely wouldn’t hurt to talk to fellow entrepreneurs who have bought an existing business.
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