The tricky part about starting your eCommerce brand is finding a manufacturer and fulfilling all the orders. But, if you want to bypass that step altogether, then buying an existing one would be much easier; it’s just not as easy picking which ones are worth investing in or how to vet them.

One of the most significant benefits of buying a premade e-commerce business is finding an affordable option quickly. The website marketplaces are now more common than ever, which means you can buy one for as little as $200.

If you’re looking to buy an e-commerce business, there are a few places where they can be found. Some of the best include:

• Exchange Marketplace — The Shopify website marketplace makes it easy to find sites that suit your needs and are profitable. You can filter for sale by niche, selling price, profit margins, and more.
• Flippa — Although their offerings are tailored to different industries, the e-Commerce section is worth looking at.
• Empire Flippers — If you’re a business person who knows what they want, then this marketplace has the perfect search tools for you.

Even if you find an e-commerce business for sale that fits your budget, the challenge will be predicting how profitable it’ll become under your management. Even seasoned online retailers can’t expect this.

So to help, we’ve listed seven tips on how to buy an e-commerce business, so you don’t get stuck with a “lemon.”

Step 1: Get More Profit

It’s easy to get distracted by all the digits in a company’s listed revenue, but remember that when it comes to e-commerce companies, there are some key factors you need to take into account. Revenue accounts for a company’s total income; however, if they’re selling high-priced items and not making any money, their payments might be misleading.

It would help if you focused more on the money left over after operations, called profit. If you can find out what each product’s Cost of Goods Sold (COGS) is so that you know how much to order for future sales and marketing efforts.

If you’re wondering about the financials, ask for a P&L statement to see what’s going on.

Step 2: Do More Research

Traffic isn’t just about the number of visitors; it’s also an indicator of your SEO strategy and marketing campaigns.

It’s essential to know how much of their traffic comes from paid ads and if the Return On Investment (ROI) is worth it. If they’re investing too heavily in marketing, this may not be sustainable.

If you’re looking to invest, it might be worth checking out a company’s backlink portfolio. Sometimes, a site’s link profile can have room for improvement, and if so, SEO analysis is needed.

Step 3: Niche

When the internet became more personalized and specific, niche targeting beat general marketing because it was easier to target a small group of people. But for this type of marketing to be successful, you have to understand your audience.

When choosing a niche, there are many things to consider, like size and accessibility.

It’s essential to pick something you’re passionate about and one that will be profitable. Click To Tweet

Step 4: Become a Detective

It’s easy to see how things are going on a website by visiting it and looking around. Put yourself in the shoes of your customer. Do they like what you’re selling?

While you’re at it, be sure to check the information on their profile is correct.

It’s essential to look at social media engagement for the brand. Click To Tweet

Check out how many followers they have and if their target audience is similar to what you’re looking for in your store.

Some sites may try to scam buyers, so it’s essential to be careful. Some accounts are robots.

Step 5: Logistics

There are plenty of legal hurdles to be aware of when buying a business. If you’re going the online route, make sure that it’s not too late in the process before you finalize anything.

Negotiate the best deals with all of your suppliers. But, it would help if you had them for everything when it comes down to it.

Suppliers may agree with other companies, called a selective distribution agreement. This can limit who they supply to you. It’s not always the issue, but it is worth looking into for your new store – otherwise, you might lose their best-selling product.

Step 6: Why You Should use This Product

If you’re in the market for something, find out why it’s being sold. Sometimes sellers are retiring or want to focus on other things and don’t have time-energy left over for this product.

You can sometimes tell when a home is not perfect, and you have the resources to fix it.

Sadly, there are dishonest people out there. Sometimes they might try to fool you, and if the seller seems shady or is hiding something from you, it may be a red flag.

Step 7: Think About Future

If you are looking for a business to improve, think about your strengths and weaknesses before purchasing an e-commerce company. You want to make sure that the product or service matches up with your talents.

You might not realize that you need to add a missing piece until it’s too late. The good news is, if you know what the gap in your business model looks like from the start, then it will be easier for us to predict how profitable this new addition could make things.

If you’ve exhausted all your options and still can’t find anything to improve, it’s not unheard of. It does happen sometimes.

When you first start an e-commerce business, it can be hard to get your bearings. But don’t let that discourage you! Running a successful online store is rewarding and lucrative once you learn the ropes and are well-versed in how everything works.

If you’re not sure how to start your online store, we have a checklist that will give you the basics. We also offer more advanced tips if and when needed.