Should you Buy an Ecommerce Business or Start your Own from Zero?

An image of eCommerce business

If you are reading this article you might have gotten tired of the monotony at the office and want more freedom in your work. That’s why starting an eCommerce business can be a great idea. It gives you the freedom to make money online from the comfort of your home. The popularity of eCommerce is undeniable. These days more people have access to the Internet and as the lifestyle becomes busier and technology evolves, consumers are looking for new, more practical solutions. And if you want to become a part of the online business world, you have two options:

  1. You can launch your e-commerce business from scratch
  2. You can purchase an existing e-commerce business

Starting an eCommerce business or buying one is more enticing and possible than ever. Depending on the budget and the time you have, you need to choose, which one is better for you. Of course, there are certain risks with both ventures because the e-commerce market is full of surprises and is constantly changing. You just need to weigh the pros and cons and ask yourself, “What is riskier: starting an e-commerce business or buying an e-commerce business?”  

In this article, we are going to look at some of the benefits and challenges of both options. You will come to know whether you should start your eCommerce business or purchase one by the end of this article.

The Benefits of Starting an Ecommerce Business from Zero

You learn new things or leverage your existing skills

“Learning never exhausts the mind”

Leonardo da Vinci

When you start a business, you are the boss so you have to contribute to each area of trading. Therefore, you get an opportunity to gain knowledge and that’s one of the biggest advantages of getting your online business off the ground. You learn as you build and the more you learn the better.

You will learn how to work with some e-commerce website-building platforms such as Shopify, BigCommerce, Wix, WooCommerce, etc., so it is up to you to decide which suits your needs the most. You can learn how to optimize your site for SEO, how to do keyword research, and where and how to use SEO keywords in your content. You can also learn what sales funnel copywriting is and how it can improve your website’s performance.  You will learn how to market on Social Media effectively to drive brand awareness and website traffic. You will learn how to engage with your audience.

As the online retailer who is just starting out you will have to wear multiple hats. You will need to know a little about every aspect of your business to be successful. At one point in time, you will eventually succeed and you will be overseeing the work that is being done by your employees. You will know whether they are doing a great job or not. What’s more, you can use the skills you've acquired throughout your career for your new business. You can further develop your communication, analytical, and research skills, etc.

You have the freedom to make your own choices

Think of your new online business as a white canvas. Slap a fresh coat of paint on it and allow your thoughts to come out in the painting. You can paint anything you want. You are in charge. As an owner of a new eCommerce business, you choose your niche, your eCommerce website builder, your business name, a legal structure, and your design. You choose your marketing strategy and the overall trajectory of your business. You are responsible for what happens on the canvas. Will this color spectrum work? Do you believe in what you see? Is the composition spatially meaningful? When you are passionate about your work you will go above and beyond to make it good and you will be proud of it in the end. Because starting an eCommerce business isn’t easy and requires hard work and a strong desire to succeed.

Ecommerce startup costs are lower

You don’t need a lot of money to get going as you can start your online business with just a few hundred dollars. It’s easily the biggest advantage and that’s why so many people are trying to start selling online. You don’t need to spend a large sum of money on product development and testing, or shipping and storage costs. In addition to that, you don’t need to hire people and pay them a salary as you can manage your online business on your own.

The Risks of Getting an Ecommerce Business Off the Ground  

High risks of failure

Many people believe that now is the time to start an online business but the reality is harsh. There is a high rate of business failure in many online businesses and it doesn’t matter what type of platform you are using.

According to a LendingTree analysis of BLS data, the business failure rate in the U.S. within the first year is almost 20%.

This data tends to grow as time goes by. By the fifth year, almost 50% of small businesses have failed. These statistics show the danger of complacency after having a major success. Even though launching an eCommerce business is less costly, it requires some serious capital investment as your business grows. In addition to that, you should never exclude external factors. Take the COVID pandemic and the war in Ukraine for example. They have caused significant disruption to supply chains. That’s why you need to be flexible and react fast to rapid changes in the global economy.  

Starting an e-commerce business is a huge commitment. It is not an easy job and requires a lot of hard work.

A lack of essential eCommerce skills when starting a business

Seeking flexibility and escape from corporate bureaucracy and stress, people like you and me choose e-commerce. It may look simple but running an eCommerce business requires some skills. There are many new skills to learn and situations to deal with. You just have to be focused, determined, and willing because for many people, learning and applying the skills they need to grow their business can be a daunting task. But learning is an important ingredient to becoming a successful eCommerce business owner.

Lack of steady paychecks

You can tell with certainty how long it takes to establish a successful eCommerce business. Starting an online business from scratch isn’t a walk in the park but it is an exciting adventure. So at the very beginning of your eCommerce journey, it will take some time before you start seeing the fruits of your investment. The growth of your business starts slowly because your potential customers have no idea who you are. You need to prove that you are trustworthy as an eCommerce entrepreneur. Also, there’s no guarantee that you will start making money right away. At first, there might be nothing but losses. You need to be prepared for it before starting out.

Benefits of Purchasing an Established Ecommerce business

Start-up work complete

As we’ve mentioned before starting a new online business is quite challenging and the truth is that most startups fail. With the growth of the e-commerce market, the competition is fierce nowadays. That’s why going with an existing e-commerce business makes so much sense. You skip the startup phase, which means that all the hard work that comes with getting a business off the ground has already been done for you. It is a huge advantage that cannot be ignored. The business structure for your e-commerce business has already been established. The manufacturing, the selling, and the branding may be already in place. You don’t have to worry about how your logo should look and the colors not looking right. You just need to understand your business ideology and the brand’s market position.

You get instant profits

When purchasing an eCommerce business you are acquiring a loyal customer base and since the sales strategies are already in place, you can start getting money from day one. You don’t have to waste your time on planning strategies for profitable deals. The previous owner has already negotiated deals with suppliers. You can use some cash left over to expand your business and effectively market your online store so that you can set yourself apart from your competitors. An established cash flow lets you think realistically and set the right goals and measurable objectives.

You inherit the employees

When you buy an eCommerce business you also get employees. These people already know what their job responsibilities are and how to work in a team. All you need to know is how they rank and relate to one another. Having an established team is quite beneficial as it can save you time. You can concentrate on other growth and development strategies for your online business or you can take a break and travel around the world with your SO while earning a monthly income. What’s not to love?

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The Risks you Face When Buying an Ecommerce Business

Losing money

If you are starting an online business on the cheap you won’t lose too much money when you fail. Buying an established eCommerce business, however, requires spending a large sum of money. Ecommerce companies are valued based on their yearly profits which are often multiplied by two to five. The possibility of losing your hard-earned savings when buying an online business is one of the main worries that you might have.

Lack of skillset

Before buying an online business you need to know which type of eCommerce business model interests you the most. The most popular models are Amazon FBA, dropshipping, and traditional eCommerce. But there’s no assurance that you would be able to maintain the business’ profitability if you don’t have the necessary skillset for your work. You need to understand the business and product knowledge. The lack of skills and information can create some serious problems for your company’s further development and growth.

Luckily for you, the skills you need can be learned and you can use them right away in your new business. You can take online eCommerce courses, learn eCommerce SEO, follow reputable eCommerce blogs, etc.

Wrapping Up

E-commerce is the new buzzword and there are a number of reasons why this type of business model is more attractive than the one that doesn’t use technology. Today everyone wants to get their piece of that pie.

There are numerous perspectives on starting vs purchasing an eCommerce business but if you are passionate about it you should go for it. You just need to do research and make an informed decision. Now that you understand all the benefits and challenges these two options provide it’s time to answer the most important question. Should you build or buy an eCommerce business?

Starting from scratch looks good on paper but in reality, it is quite a stressful endeavor. You need to be really good at multitasking. Sometimes it might feel like there are a thousand things to work on simultaneously. In addition to that, you need to learn a lot of new skills. What’s more, starting your online business from zero is a long game. You have to be willing to invest time in a project that has a high chance of failure. The numbers don’t lie as 50% of small businesses fail within the first five years. It can take months or even years before you get the return on investment.

Buying an already established eCommerce business is a safe option because at the end of the day it’s all about risk control. With an already successful business, you have more chances to succeed. You get a proven business model, proven products and services, and proven marketing and sales strategy. You have a proven system to make money. Buying an existing business isn’t cheap but you can recoup that investment fairly quickly.

Both approaches include some risk, but if you have enough money to buy an existing e-commerce business, it puts you in a better position.

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