There is no doubt that there is money to be made in eCommerce. The PWC 2018 Global Consumer Insights Survey found that nearly three-quarters of over 22,000 consumers across 27 territories of the world say they plan to spend more, or the same, than the previous 12 months. They will do so mostly at a brick-and-mortar store or online with mobile devices, with 88% of consumers willing to pay for same-day or faster delivery. eCommerce is a huge industry, but there is also a huge number of businesses competing for space.
Look at the exponential growth of companies like eBay, Alibaba, and Amazon to see how to do it well, but also don’t forget there is scope for smaller businesses to flourish. Buying an existing eCommerce store is sometimes a better option than starting up. If checked out thoroughly, it should come with existing customers, revenue, and a platform to build on.
Buying an eCommerce store is not a simple process, as you need to be extremely tactical and switched on to ensure you invest in a worthwhile business. Successful eCommerce stores will have all the elements in place to keep growing, or they may need a push in the right direction to develop and grow.
eCommerce stores have the power to out-sell and compete with major retailers, as long as you approach the business in the right way. So, if you’re considering investing in an eCommerce store or even starting one from scratch, consider these points first, so you can generate leads and grow your business.
Benefits of buying an eCommerce store
Whether you are experienced in retail or it’s a new experience for you, buying an established eCommerce store has many benefits. You are entering a competitive market with a business that has already made a name for itself and you are simply throwing your talents into the mix to expand and build upon it. Make sure you look at the eCommerce platform being used as there are plenty out there, with Shopify being the most commonly known.
Existing customer base
Buying an existing store also means you have a customer base to work with, as well as pre-approved leads and customers to tap into for repeat business. You can make the most of the customers who already exist and utilize them to help attract new customers through recommendations, testimonials, social media sharing, marketing activities, and more.
Positive / growing reputation
Buying a business that already has a positive reputation means you’re able to get off the ground much more quickly and you can promote and make the most out of existing positive reviews and feedback. A good reputation gives you a base to work from when promoting your new business, even if you make changes and take it in a different direction.
Everything is in place
Another benefit is that you’re entering into a business that is primed to go – if you make the right purchase, the supply chain will already be established and operating, so you won’t need to set it up from scratch.
Social media momentum
Equally, you can benefit from, and build upon, the existing social media presence the business has. You can utilize and grow their existing social media channels and reap the rewards of any positive relationships and networks built up by driving sales.
The main thing you benefit from is the website itself; you’re buying an established eCommerce store so you can build upon the existing platform and tweak it to increase traffic and revenue. You can analyze what’s in place and utilize existing methods for gaining traffic, as well as adding your own.
Buy-and-sell eCommerce store marketplaces are designed to show you exactly where a store’s traffic is coming from and the revenue it generates.
When not to buy
There are many eCommerce stores on the market which are not a good investment — it’s important to recognize the difference so you don’t make a bad investment and mitigate any risk.
Website traffic
The first place to start when looking at eCommerce stores is their traffic. If it is almost all paid for with no organic traffic, or only organic traffic with extremely high bounce rates, you need to question the quality of the site and why they aren’t able to attract quality, natural leads. Whatever else you do, your website can be a fantastic asset for your digital strategy.
Customer service and reputation
You should also look closely at customer service and compare the quality of reviews with the volume of sales. If you see large sales figures but a low level of positive reviews then you should be questioning whether it has repeat and long-term customers — if not, then there could be an issue with the quality of the store, and its reputation.
This is also the case if you see a site getting a lot of brand new customers but very low levels of repeat and return customers — why are people not coming back for more? Either way, social media for customer service is a great way to prevent or reverse poor reputations.
Hidden costs
When you examine the finances of your potential investment you’ll begin to see things unravel very quickly if there is an issue. Costs you didn’t know about beforehand, such as fractures within the supply chain as well as costly contracts you can’t get out of. Any cost which doesn’t add up should be queried and treated with caution.
Digital assets
The final key area you need to look into is the online presence of the eCommerce store. Do you rate their design and branding, website and current platform? How are their marketing, content and digital strategies faring?
If the whole online experience is disappointing and you know it will take a considerable investment to overhaul it, is this really the business for you? Unless you can arrange a considerable discount on the purchase price, these kinds of deals are best avoided.
To buy or not to buy
To buy or not to buy is a question you should have in your mind whenever you look at any potential eCommerce store investment. Your purchase process should begin with extensive research to ensure that it is a sound investment and when you have found the right business, you can take it to where it needs to go to flourish.