Buying an eCommerce business Vs Starting from Scratch

Billy BeardBlog, Business, Ecommerce1 Comment

There is a question coming up more and more these days – should I start my ecommerce business from scratch and hustle my way to the top – or should I buy what someone has already built and take it to the next level.

Great topic for discussion, and today we have a contributor giving us insights on this exact topic – let’s learn more now!

Did you know that you don’t always have to start an eCommerce business from scratch? You can actually buy an eCommerce business and take it over with its prevailing assets and resources.

In this article, we are going to compare the two options, and also study their involved ups and downs so that we can figure out the best picks for you in certain circumstances.

We can’t ignore the fact that several entrepreneurs do prefer buying over starting an eCommerce business from scratch. This approach must be entertaining some pros that make it more practical in a particular state of affairs.

But, how would you decide if taking over will work in your situation?

As both the options are equipped with their own set of pros and cons, it’s not easy to select the one fitting best with given circumstances. Moreover, if you have never owned an eCommerce business, you might lack the experience required to pick a profitable business model for taking over.

In short, it is all about deciding –

  • If a pre-set business model is a good choice?
  • If the existing model will accommodate your specific vision?
  • If you should set up your own business model devising from scratch?

Buying an existing eCommerce business

Buying an eCommerce business definitely gives you some advantages. You get a pre-arranged model with prevailing resources such as website, mobile apps, human resource, established customer-base, B2B relationships, and many more. When you buy an established eCommerce business, you don’t have to do the groundwork and can simply build the new assets from a given point.

However, it is also a fact that you need a very large investment to buy an eCommerce business. The cost of buying an established business is always going to be mammoth. The acquiring cost, however, depends on whether the business is highly successful or struggling to survive. The established one will, of course, cost fortunes, but the stumbling businesses might come at a lucrative acquiring cost.

But why would you want to acquire a non-established business?

Businesses don’t always stumble because of loss. Many times, operations have a well-established customer base, but they can’t continue because of a few unavoidable circumstances such as-

  • Lack of investment
  • Damaged brand identity
  • Lack of proper management

For example, when Ray Kroc acquired McDonald’s, he merged the established brand identity with his own assets and expanded the business to the next level. Despite being a popular name, McDonald’s needed a fresh start with fresh ideas from new management. This takeover actually helped the brand increase its reach with better investments.

Starting an eCommerce business from scratch

If you have a new, disruptive, and unique product or service idea, it is always a wise idea to build your eCommerce business from scratch. You need ownership of the business from the beginning where you can hire your own staff, device a disruptive business model and map that model on a customized website solution.

While taking over an existing business, you miss the personal connection with the organization and its resources, which is an essential ingredient for success.   

However, you must also be aware of the risks of the same. It requires a mammoth groundwork. With advantages and absolute control comes responsibilities. From devising the business model, deciding the product mix, and building the online store to establishing the B2B partnerships, everything requires a pampering like an infant.  Don’t forget the tasks to be one for building your new brand, devising a marketing plan, advertising your product-mix, and getting your first sale.

Research is the key: Which one is better?

Be it any of the two choices, the success of your venture totally depends on doing the required research and identifying the odd and favors in both. If you think you have the capital to buy an existing business, begin by studying the following current factors:

  • Existing assets
  • Total revenue
  • Business model
  • Financial debts
  • Product mix
  • Legal clashes
  • Business location
  • B2B partners and relations
  • Customer base
  • Market value
  • Online business reviews
  • Online customer reviews
  • Website solutions
  • Mobile app solutions

Identify the above-mentioned aspects, and you would know if a particular business is good for taking over.

However, the second option of starting a business from scratch would not require this research, but it would be more into building all these aspects by yourself. You can start with market research to analyze aspects such as:

  • The uniqueness of your product mix
  • The current Market value of the niche
  • Future market trends of the niche
  • Trending business models in the niche
  • Required B2B partnerships
  • Required human resource
  • Required physical resources
  • Competition research
  • Customer research
  • Required website solutions
  • Required Mobile app solutions

It is you who need to take care of most of the above aspects. However, you won’t have to do much to get the website and mobile app solutions. Websites and mobile apps have gone very affordable these days. Various pre-built platforms and custom eCommerce platforms are available in the market. You can find a suitable one and customize it according to your needs.

In short, even if you are starting your eCommerce business from scratch, you don’t have to build your websites and mobile apps from scratch. You can use one of the following technologies to get ready-made and fully customizable web and mobile solutions:

Ready-made custom eCommerce platforms (ShopyGen)

Planning for the long-term

E-Commerce is a highly competitive market. Each day a new business joins the league and an existing business quits the same. It’s a long term objective. If you wish success, you either need a mammoth capital to take over a highly successful operation, or a disruptive business model to start from scratch.  In either of the cases, you need careful planning with a futuristic vision. It is also possible that your incredibly successful takeover of an amazingly performing business might not go as expected. The currently over-performing business might lose its charm over time. In such a situation, you need absolute control over everything from existing resources to tech solutions, which is possible only while starting an eCommerce business from scratch.

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One Comment on “Buying an eCommerce business Vs Starting from Scratch”

  1. Pingback: What Are The Top Amazon FBA Brokers To Buy/Sell My Business?

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