The future of e-commerce is promising.
With the coronavirus pandemic fueling a global growth of entrepreneurship, many individuals successfully jumped on the e-commerce bandwagon.
A thriving e-commerce business is a viable vehicle to fulfill your personal and financial dreams. Imagine the freedom of working from home, the ease of making money while you sleep or travel, and the joy of building a side hustle to pursue your passions—only a few of the compelling reasons why people are actively hunting for their next acquisition.
By 2040, e-commerce is expected to make up 95% of all retail sales worldwide.
There are countless benefits to buying an e-commerce business, ranging from the time savings of bypassing the business-building stage to the minimization of risks already taken by the previous owner.
Maybe you’ve decided this is the path for you. Now you’re moving to the next stage of the process—finding the right e-commerce business to buy.
You’ve landed in the right place because we’re sharing our essential tips for buying an e-commerce business in 2023.
Don’t underestimate the importance of understanding why you want to acquire an e-commerce business. What are your long term goals? Are you purchasing a company to flip it? Or, do you see yourself invested in running this business for the next 5-10 years? Do you want to grow the business to 5 or 10 times the current revenue, or do you hope to create an extra source of income? Answers to these questions will help guide your strategy and find the right business to buy.
It’s inevitable that you’ll spend a significant amount of time working on your business. That said, it's important to buy a business that aligns with your interests, or one that you already have some knowledge about. If it’s a new market, you should at least have a deeper desire to learn more about the industry. Without this abiding interest and alignment, it’ll be challenging to go through the ups and downs of business ownership.
There are many types of e-commerce businesses, so you'll need to identify the area of your interest. While you might hire a broker or have a partner, like Boopos, guiding you through the acquisition process, you should still conduct your own research. Familiarize yourself with aspects of the business you’re considering buying; from the demand of the product, current sales, growth trajectory, customer engagement, existing relationships, and the supply chain.
Another important aspect for consideration is the specific value you will add. Specifically, how will you continue to grow and operate the business? You should understand how your skills will support the businesses growth, and assess where you might need additional support. For example, you’ll need to explore opportunities to lower costs, determine whether the current advertising, if any, is impactful, and how you can increase sales (e.g. through marketing, improved website, branding, etc.). Then, you’ll need to determine how your specific skills will contribute to the growth of the business.
While an exciting venture, there’s a lot to think about when buying an e-commerce business. Rest assured that there are resources available, like this one, to help you identify your business target and also guide you through funding and acquisition.
Stay tuned for future posts that will go deeper into each of these topics and more.