The thought of starting an online store is an enticing one.
I mean, the chance to quit your job, travel the world, and make good money in the process — who wouldn’t like the sound of that?
However, while this is the reality for some, it isn’t the norm.
Or at least, not in the way you think.
Starting an online business is hard. It takes time, effort, and dedication. To build a profitable ecommerce store, you need to find a place in the market and work tirelessly to fill it — only then can you take your foot off the gas and reap the rewards.
Let’s face it — there is a reason many online businesses fail in their first year…
But there is another option. One that takes less time, less effort, and can be just as profitable if you play your cards right.
Yep, I’m talking about buying an online business.
Why buy an online business?
When you buy an online business, you remove most of the groundwork. You don’t have to go through the steps of finding a niche, creating a website, and finding sought after products.
Secondly, you don’t have to go through the initial stages, where you put in an ungodly amount of work, and get very little income to match.
Lastly, if the business of interest is making any sort of income, you can evaluate what is working and what is not. This means you can identify opportunities for growth before starting out — which is something that can only be done via trial and error when you start your own business.
How to buy an online business?
While buying an online business may sound like a unique concept, it has been happening for years.
In fact, there are three primary ways you can do it.
- Contact Them Directly
This is the least common method of purchasing an online business, but that doesn’t mean you shouldn’t explore it — because when it works, it can be incredibly effective.
In short, if you stumble across an online business that you have an interest in, you can reach out to the owner and see if they are open to selling. Even if they haven’t thought about it, a reasonable offer could be enough to get them started.
As a bonus, as the business is not on the market, this will give you the chance to negotiate on price. Trust me when I say this is much better than being forced into a bidding war with other buyers.
- Via an Online Marketplace
As online businesses have become increasingly common, so has the buying and selling of them.
Subsequently, we have seen the development of online marketplaces (like Exchange Marketplace, for example) designed for this purpose. These websites provide a platform where you can buy an online business in a simple and efficient manner.
Using a marketplace, you can browse listings and find something that is right for your needs. As a bonus, many of these sites provide detailed information on profit margins, customer bases, and stock holdings — so you know exactly where you stand.
- At an Online Auction
Finally, you can also buy a business at an auction.
Like the marketplace mentioned above, you can find a number of e-commerce stores for sale on a variety of auction sites. But rather than paying a list price, you bid against other people through an auction process.
While this method does give you the opportunity to find a bargain, there is a level of risk associated. I mean, you could pay too much for a business, or buy one that has very little profit.
This option is not for the inexperienced….
Key Tips For Buying an Online Business:
I wanted to finish this article by outlining my top three tips for buying an online business.
- Make sure it Aligns with Your Interests
Running an online business is no walk in the park — it takes time, dedication, and hard work.
If you don’t buy a business that you are genuinely passionate about, your chance of success will plummet. With this comes an increase in your risk of burnout, and a less happy work environment.
All of which ruins the point, really.
- Do Your Due Diligence
If you are serious about buying an online business, you need to take an in-depth look at its health.
Explore its financials, get information relating to site visits and current stock list. Make sure that it has multiple income streams, and is not relying on a single online supplier for all its products.
Ultimately, ensure it will be profitable both when you take it over, and for decades after.
- Don’t start without a plan
Finally, before pulling the trigger, make sure you prepare a detailed business plan to guide your decisions going forward.
Clarify your own expectations, identify areas for growth, and highlight opportunities for expansion. With any business, you need to know where you are going — otherwise you will find yourself simply trading water.
This is one of the most important decisions of your life, so make sure you do it right.
Buying an online store is a great way to make the move into an online working environment, without going through the hassle of building the business from the ground up — however, you must do it properly. By using the tips outlined in this article you can ensure your purchase is a good one, taking the first steps to that “online business lifestyle” in the process.
This article was edited and published by Rick Weinberg, California Business Journal’s Founder and Editor-in-Chief. Click here for Rick Weinberg’s biography.