Making Money Online: When Is It Smart to Buy an Existing E-Commerce Site?
Make money online!
How many times have you seen those words on an email subject line or emblazoned across a piece of clickbait?
I don’t think I need to tell Allbusiness.com readers that the information behind virtually every “make money online” come-on line is disappointing. However, one time-honored way to make money is to buy a business, and with so much commerce now happening over the internet, it’s no surprise that buying an e-commerce business is a legitimate way to make money.
You can browse Shopify-based e-commerce sites that are currently on the market to get an idea of the kinds of sites available. You’ll find price tags that start in the low hundreds of dollars and shoot up to the many thousands of dollars. Of course, a new site with little sales history will be inexpensive while a site with good traffic and sales will command a much higher price.
But in any case, you should consider these points when you think buying an existing site might be the best way for you to start making money online:
You know how to build and maintain traffic. If you buy a new store with low traffic, you’ll need to build it up; if you buy a store with good traffic, you’ll need to know how to maintain it. If terms like SEO, organic search engine marketing (SEM), paid SEM, and retargeting are foreign to you, you’re probably not ready to buy an off-the-shelf e-commerce site. The next point relates strongly to this truth.
You know the origins of existing traffic. You might find a site that is making some sales and think that you can push it to the next level, but as soon as you buy it, traffic falls off. If the previous owner was driving traffic from his or her personal social media accounts, that traffic is likely to disappear when the seller exits the picture.
You have good ideas about “what’s next.” You’re entering the world of entrepreneurship when you buy an e-commerce site, and for entrepreneurs, growth (or second acts) is critical for ongoing success. Sooner or later—and for most people it’s sooner—you’ll hit a wall in sales. You’ll need to expand your product line or find new market segments. Don’t invest in an e-commerce site if you don’t know how you’re going to grow. Standing still in business is the same thing as going backwards!
As a prerequisite to this point, you need to have a good understanding of the market you’re serving and the products you’re selling. Ideally, you would be passionate about the commercial sector that you’re entering, otherwise you’re likely to burn out or get bored quickly.
You understand what it takes to maintain an e-commerce website and its ongoing marketing. I used Shopify earlier as an example because it has a great reputation for being one of the most user-friendly DIY e-commerce platforms. But even in that case, you need to have a good understanding of how websites function, where design functions are located, how to work with templates, and how various services work in conjunction with an e-commerce site, such as payment services.