Whether you are a business owner or an entrepreneur looking to get started, you will no doubt be aware of the power and rapid growth of the eCommerce sector.
With 60 million eCommerce users expected in the UK throughout 2022, the UK has the most advanced eCommerce market in Europe, and it’s certainly not something to ignore.
eCommerce businesses have many benefits over traditional brick-and-mortar shops including lower overheads, lower staff requirements and 24/7 access for customers.
This has resulted in a surge of mergers and acquisitions (M&A) activity within the eCommerce sector, with entrepreneurs and established businesses alike looking to acquire online businesses.
In our latest blog post, we take a look at the key benefits of eCommerce businesses, whether you should grow an eCommerce business organically or purchase one and the steps involved in buying an online business.
Benefits of eCommerce Businesses
eCommerce businesses have several benefits over traditional shops which have contributed to the increase in demand. The key benefits include:
- Convenience – Customers can access your business and buy your products and services from just about anywhere on any device, this convenience can increase sales and expand your potential customer base significantly.
- Product Information – An online store allows you to present product information such as description, weight, dimension and category data alongside content such as images, videos and customer reviews to give the shopper all they need to know to feel empowered to make a purchase.
- Lower Overheads – As there is no need for a large team of staff, stock, storage and physical space to showcase your products, eCommerce businesses generally have lower overheads and operating costs.
- Payment Methods – With multiple secure payment methods such as debit cards, credit cards, PayPal and even buy now pay later schemes such as Klarna available to online stores, customers have more flexibility on how they can pay.
- Generational Shift – With a generation of younger shoppers who are more inclined to purchase online coming through, the popularity growth of eCommerce is likely to continue.
- Analytics – As the majority of customer interaction takes place online, it can be tracked and analysed to make smarter business decisions based on customer behaviour.
Of course, there are also drawbacks to eCommerce businesses. For example, having such as significant reliance on an online platform means that your business can be immobilised if you experience website downtime.
For this reason, some businesses may choose to take a hybrid approach to eCommerce, with an online shop set up to run alongside the existing business model.
Growing Organically vs Buying a Business
When it comes to starting a new business, the two main routes taken are building a business up from scratch or purchasing an established business.
Starting a business from scratch has a lower financial entry point and gives you complete control over how the business is managed. However, it can take years to turn a profit and entering a sector from scratch means you’ll be competing against established businesses and, therefore, have a higher risk of failure.
On the other hand, buying a business means you are taking ownership of a proven model which increases the chances of continued success and often means less of a time commitment. However, a large amount of capital is required up front and you may experience creative differences from existing staff when taking ownership.
In the eCommerce sector, which is highly competitive, it can take years of hard work to get your business into a position where you are dominating your niche online. For this reason, many entrepreneurs are choosing to acquire or merge with established companies to provide a quicker route to success.
For more information about the advantages and disadvantages of both approaches, take a look at our blog post about buying a business vs. starting one.
How To Buy an eCommerce Business
If you are looking to purchase an established eCommerce business or grow your own business through acquisition, there are a number of steps you can take to increase your chances of success. These include:
- Research – Research opportunities early in your buying journey whilst considering factors such as the reason for purchase, the management requirements, price, staff and location.
- Channels – Use a range of different mediums including business brokers, websites, networking groups, social media and online marketplaces to find the best eCommerce businesses for sale.
- Valuation – Have a professional valuation of any businesses you are interested in purchasing carried out, this valuation will take into account several different factors to provide an accurate figure.
- Raise Funds – Ensure you have the funds available to buy the business or the means to raise them.
- Negotiations – Set out your terms and work to get a better deal on the business before you make a formal offer.
- Completion – Follow the correct legal process to make the purchase official.
Buying a business can be a complex process, but using a specialist eCommerce business broker can help you every step of the way and can greatly increase your chances of a successful acquisition.
Specialist eCommerce Business Brokers
Whether you are interested in buying an eCommerce business to capitalise on the current market success, or you currently own an eCommerce business and want to discuss selling up, we can help.
To find out more and arrange a free initial consultation, give one of our friendly team a call today on 0117 379 0117 or fill out a contact form and we will get back to you.