The initial decision that struck people that want to achieve business greatness is whether they should start from the beginning and build the business from ashes, or buy already established one. This is the common problem that most entrepreneurs wrestle to some point.
According to website brokers, the sale of e-commerce websites and businesses increased to the point where hundreds of sites got sold to prominent buyers in the last few years.
Some individuals start a business from the very beginning, and they enjoy building it from scratch, but we can see the growing number of people who are buying already established e-commerce businesses, which could be a faster route to success if you handle it well.
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Why Should You Purchase E-Commerce Website?
The first and most important reason why some people who were in physical retail decide to opt for online retail websites is that it has become a profitable venture. It has customers from all across the globe, traffic and suppliers, so you will not take the first risks that come from building retail from scratch.
If you already own an e-commerce website in a similar niche, and you wish to cross-sell and to increase your profit and brand awareness, you can get plenty of benefits by buying an already established website.
On the other hand, if you are starting out, finding and buying website will reduce the hassle and frustrating work that you have to deal with from the very beginning and starting a business. It can also provide you handsome return.
For instance, most e-commerce websites will sell for between two or three times their annual profit, which means that you can expect ROI (return on investment) of between 33 and 50 percents. Check here to learn how to calculate return on investment.
Buyers that will bring e-commerce experience can grow in one year, and later you can sell the entire website for more profit if you do not want to continue.
The main disadvantage is that you have to make a significant investment to get a business in the first place. It includes an upfront payment, and if you’re spending too much money on it, the question that will appear in your head, whether this is a worthy and valuable investment. So you have to know what to search for when buying:
The only thing that matters when it comes to online retail websites is the amount of traffic. Everything depends on it, the price, the future of business and many more. When you appraise site for sale, the first thing that you should look at is analytics.
The essential elements to look for are sources and traffic trends. You have to make sure that you use Google Analytics because that is the best way to observe traffic on the website in real time. You can also check trends for traffic sources, day-by-day, month-by-month.
E-commerce is the form of online sales that became prominent in the last few decades, and you should visit this website: https://en.wikipedia.org/wiki/E-commerce for more information.
Check whether traffic is inclining or declining, and whether there are spikes and what is an explanation for them. You can also check whether the website has a history of Google penalties because you don’t want to pay the significant cash for a site that you have to optimize again.
If this particular business has high search traffic, you should check and analyze keywords that it uses to rank and make sure that popular keywords will have the potential for an increase that you wish to implement after purchase.
It is also essential to review the backlink profile and to check signs whether the old owner has paid for spammy backlinks, which could cause severe problems for your overall optimization. You should check the way link profile has grown over time so that you can determine what will happen when you buy it.
The suppliers are the most crucial part of any e-commerce business that you wish to start. As a potential customer, you should take a closer look to supplier arrangements, such as length of relationship, concentration, whether all products come from one supplier or not as well as terms such as shipping and discounts.
If you acquire a business that features low supplier concentration, you will get a hassle of searching new suppliers, which could be a time-consuming issue.