Self Help Documentation
< All Topics

Make or Buy an Online Business

Before you own a successful online business, you are at least 6-12 months ahead. Are you aiming for a web store with good positions in Google? Count on an additional 6-12 months. All beginnings are difficult and that can certainly be the case for setting up a profitable online business.

But you can skip the start-up process and take over an existing online business. This will save you a lot of time and the risk of failure is statistically lower!  In this article we will discuss aspects of such an acquisition.

Buy an existing online business

Buying an online business offers you some great benefits. There usually is turnover, a customer base, cont(r)acts with suppliers, positions in Google (free traffic) and of course the web store itself. When you buy an existing online business, the seller has already taken much of the risk that the web store will never grow to be a successful business. You buy a business with a track record.

The price of an online business

If you are going to buy an existing web store, there are a number of factors that can significantly increase the price. For example, if you need to buy the current stock immediately or if the seller bases the price of the online business on revenue that he expects in the future. Our advice is, first of all, to come up with a price based on a broad-based valuation method that you both agree with. But in whatever way you get to a price: when an online business has proven itself,  the acquisition price will reflect this success and require an investment.

On the other hand, starting an online business from scratch too has its disadvantages. Fine-tuning design and usability, composing an optimal assortment, creating valuable content, building SEO positions, optimizing technology and building a permanent clientele can be a long and quite expensive process. On average, starting a serious online business will at least cost 35,000-60,000 euros. (excluding your own hours) If you want to acquire an existing business and are still in doubt whether you should start from scratch, then this is definitely something to consider.

Ways to find an existing online business

If someone is thinking about selling his online business, he or she probably won’t immediately announce it in large letters on his web store. To publicly show that an online business is for sale, might cost a lot of customers. But like in the other businesses, there are specialized brokers and platforms available. That goes from simple advertisements and marketplaces to the step-by-step guiding of a complete acquisition process.

Risks when buying an online business

Always make sure that you carefully examine what price you should pay for an online business. In many cases, it is based on, for example, numbers of visitors and revenue generated. But is this an indication if there is enough profit made? What are the costs of those visitors, for example? If there are a lot of advertising costs attached to those visitors, then this number might not be so interesting after all: everyone can purchase traffic/visitors!  Because we can advertise all! (the real question is whether paid campaigns are effective and cheap) There is a risk that visitor numbers fall shortly after an acquisition. For example, because the seller mentioned his web store on many other websites, such as on his Facebook page, on LinkedIn or on another website or blog he manages. Will these links stay in place after an acquisition?If not, you will have to re-build it yourself.

So always do good research before you buy a website.

Benefits of taking over an existing online business

You do not have to worry about creating the website, finding suppliers, or buying the domain name. Because that has already been done. Often there is a lot of stock and if you are lucky, the website already has a lot of visitors. So you can get started right away. And with problems, you can still ask the seller for assistance.
Other benefits:
An existing customer base
Backlinks to the web stores
Google rankings
Existing stock
Performed promotional work

Disadvantages of acquiring an existing business

But there are also disadvantages to acquiring a running business. Because the seller already made many choices, some elements may not be fully customizable anymore. In addition, the start-up period often consists of hard work and a lot of investment, but by doing this hard work one also gets to know an online business. You are the one that takes each decision and tackle all problems, which means that your web store won’t have many secrets anymore. When you acquire a web store, you still will need to get to know the shop with all its peculiarities.

One disadvantage that can be prevented, is the acquisition of problems. Not every online business is profitable and maybe it is for sale because the owner is making a  loss. Can you really turn this around and make this online business profitable? Again: always do thorough research!

Previous Attention Points for e-Commerce Acquisitions
Next Transferring Ownership of a Web Store
Table of Contents