What better way to jump into the mobile eCommerce world than by purchasing an existing (and potentially already-profitable) venture, and avoiding the long and arduous process of building a business from scratch and carving out a niche for yourself in the ultra-competitive online world?
Before diving headlong into any venture, there are a number of questions you should first ask yourself about the business in question to determine whether it’s the right one for you. It’s also worth noting that even a business that is currently successful may have warning signs in place that could indicate a fall from grace is on the horizon unless reverted, and these factors all need to be considered before you jump into any purchase.
Here are a few of the key ingredients you should look at when deciding which eCommerce software recipe is right for your table:
How much traffic is the site and mobile app generating, and where is it coming from? Is the traffic steady, or does it fluctuate? Is it rising or falling over time? If you plan to target a specific demographic or region with your website, does this site’s traffic already fit within that framework, or would you have to start from scratch to reach your target goals? These are all important factors to consider when analyzing the traffic of a site you’re considering purchasing. Site traffic heavily influences the value of a site for sale, but make sure it’s the kind of traffic you want.
To further the last point, how much of that traffic is actually being converted into paying customers? If it’s already high, chances are you’re buying a site that has already had some level of success (and probably paying a lot more for it as a result). If not, is there a potentially easy solution that could quickly raise the conversion rate, and turn the site from a pretender into a contender overnight? Often you don’t want to purchase a site that is already at the top of the heap. You want to buy low, and find a site that is just a few short tweaks away from success, and conversion rate is generally seen as one of the easiest stats to remedy over time with the proper site changes.
How much profit is made from the sales of whatever the website is selling? Does it require a steady stream of sales to make a little profit, and could that be maintained if so? Could the profit margin be beneficially adjusted without eroding those sales? The profit margin is often a telling indicator of not just past success, but potentially the future success of a business as well.
What software is their website and app currently using? Is it software that is clunky and out of date, and will shortly require an upgrade? If so, this should be factored into the value you place on the business in question, and how much you should be willing to pay for it.
Take these factors into consideration when purchasing an existing eCommerce website, and you should be well on your way to making a good value purchase with plenty of room for growth and success.