Why do businesses choose e-commerce?
The main advantage of an online store and e-commerce, in general, is the ability to trade without geographical restrictions. You can arrange delivery of goods to other regions and even countries. Also, e-commerce requires less advertising and promotion costs, as SECLGroup team noticed.
In addition, the e-commerce business model allows you to get shareware customers if the online store is popular, promoted in search results, and has a base of regular customers.
For buyers, online stores are convenient due to their availability. It is not easy to find the necessary goods in a store near the house or late at night, while when buying via the Internet, you can go to the site and place an order without leaving your home.
There is a lot of potential for brand development in the e-commerce business. This will help make your online store recognizable and give you a competitive advantage. You can choose a domain name that matches the name of the company, create a website with a corporate identity, and design a logo. Every time they visit your site or see an ad for a store on the Internet, buyers will associate the brand with your e-commerce business.
Finally, the cost items of an e-commerce business differ from a traditional offline store: there is no need to pay for the rent of premises and utilities, purchase commercial equipment, hire several cashiers and sales assistants. Often, e-commerce business owners provide its work on their own without the involvement of hired employees. Therefore, an online store can start trading immediately and without significant investments.
What the Buyer Should Know
Do your due diligence before purchasing an e-commerce business. Be sure to ask the seller for access to Google Analytics. You should not trust screenshots or demonstration of metric data from the seller’s screen remotely – in both the first and second cases, you cannot be sure that the indicators were not distorted. If the seller, under various pretexts, refuses to provide guest access to analytics, it is better to refuse to acquire such a business.
When checking analytics, take into account long-term periods (from several months) – only then you can get an objective picture of the average traffic level, assess the impact of seasonality, etc. In the short term, indicators may be higher due to advertising campaigns or the influence of random factors.
Assess the prospects for scaling your online business: expand your sales territory, and offer customers new products and services. How can this be done?
- When buying an e-commerce business, brand awareness and a website with a short domain name that matches the theme of the online store will be a big plus. Such a business will be easier to promote.
- If the online store is based on a site with a self-written CMS system, make sure that the rights to the source code will be transferred upon purchase. In the future, this will allow you to make the necessary changes and correct errors. In addition, ask the seller if he is ready to provide training on the site and give advice, or you will have to figure it out on your own.
- Find out about the availability of exclusive contracts with contractors, as well as the time it takes to deliver goods to your warehouse. If it turns out that all goods are purchased from 1-2 suppliers, check if it is possible to conclude an agreement with other companies in case of termination of cooperation. Diversification of suppliers will help to avoid risks in case of interruptions in the production process or price increases.
- In addition, before buying an e-commerce business, you should find out the number of customer calls to the contact center and the number of hours per day it takes to process them. This will help you understand if there is a need to hire support staff.
What the seller should know
Buyers prefer online businesses that make a profit without the significant involvement of the owner. The cost of such projects is usually higher.
To reduce the involvement of the owner in the work, automate the routine processes of the e-commerce business. For example, integrate a website with product catalogs that will eliminate the need to update the assortment manually or outsource this task, install a CMS system to track customer requests, use special services for email newsletters (MailChimp, JustClick), etc.
Another factor that increases the value of a business is the presence of a brand and customer loyalty to it, that is, the willingness to make repeated orders, regardless of the availability of a similar product from competitors. For a free evaluation of the online store, leave a request for evaluation.
Who is the e-commerce business model for?
For an aspiring entrepreneur, an e-commerce business would be one of the best options as the business model is easy to understand, and running a small online store does not require deep technical knowledge.
Buying an e-commerce business will be of particular interest to owners of projects working on the AdSense model. Starting from scratch or buying a ready-made online store in the same niche as the main business will allow you to sell to loyal customers. Thus, it will be possible to mutually promote and expand the audience of two resources at once: an information site and an e-commerce platform.
On a societal scale, e-commerce makes it possible to facilitate the work of many social institutions (the possibility of registering in medical institutions for a certain time, remote paperwork, and other services), reducing queues and increasing the speed of service.