You’ve probably read case studies and success stories about how people are finding tremendous success with online stores. The tabloids are also riding the wave with headlines like “E-commerce market set to hit $4 Trillion by 2020.” Surely, all the signs are there; maybe it’s time you took a dip into the world of e-commerce and became an online entrepreneur yourself.
But, the question is, are you ready to invest your time and money into running an online business?
The truth is, online e-commerce demands the same fundamental economics and is similar to starting a brick and mortar store in the real world. You should identify an unmet need or problem that should be solved and then efficiently provide solutions to meet that need.
Before buying an e-commerce business and starting your e-partnership journey, here are four things you should consider:
- Take A Test Drive before Purchasing an E-Commerce Store
So, you’ve identified the right business that you want to buy. Before signing on the dotted line and approving the transaction, ask the store owner to give you a trial period to test the waters. A business on sale may have a solid track record, but the one thing that is not guaranteed is the future of the company. Since you can’t predict what the future holds, you can instead get a good indication by testing out the website for a few short weeks.
During the trial period, you want to learn the ropes quickly, ensure that there’s a stream of income, the rating is excellent, and the inventory is good.
- Consider Buying a Micro Niche
It is essential, especially for beginners, to buy an e-commerce store that is highly targeted and has less competition. You’d want to avoid a general store that sells an assorted mix of products. Some product demands vary according to seasons – the last thing you want is to burn cash in an inventory that isn’t clearing. Go for a business that sells one or two unique products that you can easily supply relative to the demand. It should also be targeted to a local area. For example, if the store has a handful of products that will do well in California, consider buying a business for sale in Los Angeles that is targeted from an SEO perspective to Los Angeles. This way, you’ll already rank well for local search terms that are related to the products that the business is selling.
- Buy an E-commerce Store That You Can Improve
One reason for buying an existing business is so you can scale it in the fastest time possible. Before investing in a pre built website, make sure you identify an area which you can improve upon. Whether that’s sourcing products at more affordable rates, generating leads more efficiently, improving on conversion rates, or building the brand, know precisely how you can optimize the business and ultimately increase revenue.
- Meet the Distributor
Whether you want to set up a physical meeting or e-meet them online, you want to make sure that you’ve been introduced to the wholesalers and that they understand that you’ll be taking over the business. Sometimes, entrepreneurs forget to get in touch with distributors before sealing deal, only to start having problems with supply and distribution as the wholesalers suddenly decide to change terms. By having a prior agreement with the wholesalers, you will be able to ensure continuity of the business.