Starting an online business and the whole buying process can be a challenging journey, especially if you’re new to the game. You need to go through a number of steps, from coming up with a name for your company, designing your online store, finding potential products to sell, and creating marketing strategies, just to name a few.
But what if you could skip all of that and buy a store that’s already established and successful? That’s why people prefer to buy a Shopify store rather than starting one.
Buying a Shopify store offers entrepreneurs like you an opportunity to jump-start their own business by acquiring an existing store with an easy buying process. Alternatively, you can sell your current store to another entrepreneur in exchange for cash, which you can reinvest in a new venture or hold as a profit.
This blog will provide you with all the information necessary to buying Shopify stores. So let’s dive into the details. But first things first:
What Exactly Is Shopify?
Shopify is a popular ecommerce platform that empowers entrepreneurs to create their own online eCommerce stores and sell their products on their website. It’s a subscription-based software that offers a good deal of tools to help sellers showcase their products, build customized storefronts, engage with customers, and accept payments in several currencies.
With over 2.1 million daily active users visiting this trusted ecommerce platform, Shopify is now as big as 40% of Amazon’s Marketplace after experiencing massive growth in 2020. One of the main advantages of using Shopify is that store owners have total control over their clients’ data, storefront appearance, and product listings, unlike other eCommerce marketplaces such as Amazon and Walmart.
Access to customer data allows sellers to get a better insight of their intended audience and create more direct relationships with their customers. Additionally, it helps them create email lists and analyze valuable metrics to optimize product listings and reduce unnecessary expenses.
What’s more, Shopify’s easy-to-use templates and tools make it simple to create an attractive storefront without requiring extensive technical knowledge or coding. All of the eCommerce website functions are accessible in one easy-to-use dashboard.
The pros of buying Shopify stores
Shopify is a promising ecommerce platform that holds the potential to generate impressive revenue. However, starting a business from scratch requires a lot of groundwork, which can be overwhelming. Purchasing an existing Shopify business is a smarter alternative that can save you from the hassle of setting up everything from scratch.
By acquiring an established Shopify business, you get to skip the foundational work and start selling products and earning revenue from day one. The business name and brand identity will already be established, and you will have access to a professional, branded ecommerce website that’s ready for use. Moreover, the business will have already earned some brand recognition and loyalty, which is an asset that takes time to cultivate.
Inventory management can be a daunting task, but by purchasing an established Shopify store, you can avoid the headaches of setting up inventory management systems from scratch.
The business will have already navigated through the challenges of production processes, established a supply chain, and built relationships with suppliers. You will also have access to storage solutions that are already in place.
The cons of buying Shopify stores
Like any business, there is a learning curve when it comes to Shopify stores. One of the main challenges is navigating the backend of the platform.
A new store will have a simple backend that can be customized by the seller, but an established Shopify business will have a more complex backend that’s customized with various apps, integrations, and plugins.
Another challenge Shopify owners face is marketing. Unlike marketplaces such as Amazon, eBay, or Walmart that connect sellers to buyers, Shopify is not a marketplace. Ecommerce and online businesses on exchange marketplace cash in on sharing traffic among same products and brands.
Being a Shopify store owner, you’ll have to push organic traffic to your listings yourself via optimizing your SEO and generating promotional campaigns through Facebook, Google ads and other social media accounts or platforms.
Purchasing an existing Shopify store with a recognizable brand and domain name means that you will have less flexibility to put your own unique spin on the products. While rebranding is an option, it comes with its own set of risks.
It’s crucial to do thorough research and due diligence when buying a business to avoid any unpleasant surprises down the road, such as copyright issues or a poorly planned supply chain. However, no business is perfect, and inheriting some problems can present opportunities for growth.
In the end, having the foundational work done for you means that you might miss out on valuable learning opportunities, such as establishing a product-market fit, sourcing suppliers, and creating a logistics management system from scratch. However, with the right approach and mindset, these challenges can be turned into opportunities to develop your skills and grow your business.
Who Should Buy A Shopify Store
For established business owners looking to expand their portfolios, buying an existing Shopify store is an excellent option. Let’s say you already own a website in the sports niche, purchasing a Shopify store selling sports equipment can help you leverage your existing audience and grow your business.
On the contrary, in case you have an Amazon store, purchasing a Shopify store can provide you with another sales channel without having to start from scratch.
Compared to other marketplaces like Amazon, Shopify imposes fewer rules and restrictions, allowing sellers to be more independent. Buying a Shopify store offers entrepreneurs flexibility but lacks the safety net of FBA fulfillment and PPC campaigns, making it potentially unsuitable for first-time buyers.
Anyway, a Shopify dropshipping business can be a good starting point, provided that you are willing to invest time in learning the Shopify backend and facing marketing challenges. In the dropshipping business model, you source the suppliers, who then manufacture, store, and deliver the products to the customer.
As the seller, you are not responsible for order fulfillment and do not handle the products directly. Instead, you earn a portion of every sale for marketing the product.
With dropshipping businesses, you don’t have to worry about logistics, giving you the freedom to focus on other areas of the business. So, if you’re an entrepreneur looking for a new challenge, buying a Shopify store and starting any of the various dropshipping businesses could be a great opportunity for you.
What Type Of Shopify Business Should You Buy
When you’re on the lookout for a Shopify business to purchase, you’ll encounter three distinct types of stores.
- Established and profitable stores: The first is an established and profitable Shopify store, which will be the priciest option. However, since this type of business has already proven to generate substantial earnings and profit margins, it’s likely to be optimized and easy to take over and manage seamlessly.
- Established stores but not performing well: Another kind of business is an established store but is not performing well. These businesses may need some fixing up but could be a hidden gem or a risky investment.
Therefore, it’s crucial to conduct thorough research and due diligence. Due to their low performance, these stores are more affordable than profitable ones, although you’ll need to invest more effort into them before you start seeing significant returns.
- Starter stores: The third and final type of store is called a starter store. It’s a pre-built Shopify dropshipping store where the entire Shopify store setup has been completed for you. The stores are usually created with a focused niche and may already contain some loaded products. However, these stores have never made any sales.
Where To Buy A Shopify Store
Once you’ve decided on the type of Shopify store you want to purchase, the next step is to locate available Shopify stores for sale. There are primarily two methods to buy a Shopify store: privately or through an online exchange such as Empire Flippers.
Private sales can be quicker, but locating Shopify stores for sale on your own can be a challenging task.
An exchange Marketplace provides access to a vast collection of for-sale Shopify businesses. Additionally, in many instances, an exchange marketplace vet the businesses before listing them. This added level of assurance is crucial, but conducting your own research is still essential. Shopify used to run its own Exchange marketplace, but was shut down on November 11, 2022.
Purchasing a business via private sale eliminates the need for a middleman, so you don’t have to worry about broker fees. However, handling multiple transactions across various platforms can take time and effort. Marketplaces offer one point of contact: a team of professionals who will lead you through each step of the purchasing process.
Shopify Store Valuation: How To Do It
When you’ve found a Shopify store you’re interested in, it’s time to start negotiating with the Shopify store owners.
Before making an offer, it’s a good idea to understand how eCommerce businesses are valued to determine whether the asking price is reasonable. If the price is too high or the business has a few flaws, you may be able to haggle with the Shopify store owners to lower the price.
Most eCommerce brokers use a similar formula to calculate a Shopify store’s worth. While computing the store’s net profit is straightforward, determining the appropriate sales multiple is a more complex process. We consider a range of factors, including:
- Growth trends
- Earning stability and diversity
- Product variety
- Trademark ownership
- Supply chain robustness
- Level of owner involvement
- Business age
- Email marketing and social media accounts strengths
These factors may seem disparate, but they provide insights into the Shopify store’s durability and resilience.
Once we’ve determined the correct multiple, we multiply it by the net profit over a 12-month period, adjusted for any seasonal variations, to arrive at the store’s value. The higher the multiple, the higher the business’s listing price.
Key Factors To Consider When Buying A Shopify Business
With the abundance of Shopify stores available for sale, it can be quite a daunting task to make a decision. However, you can simplify the process by taking into account the following factors that can assist you in narrowing down your options and finding the ideal match for your needs.
What type of online Shopify store piques your interest and gets you excited?
Firstly, think about what type of online store gets you excited and energized. Are you passionate about fashion or beauty? Or maybe you love unique toys and furniture. Whatever your interests may be, browse the wide variety of product lines available on Shopify’s marketplace for buying and selling stores, such as First Choice Business Brokers or Exchange.
Which business model is suitable for you?
Next, consider what type of store you’re comfortable working with. Shopify stores offer several options for selling to customers, including dropshipping and print-on-demand. Depending on your preferences, one of these fulfillment models may be more suitable than others. For instance, if you don’t want to deal with storing inventory, dropshipping could be the perfect fit.
What skills do you have for running a Shopify store?
When you intend to buy a Shopify store, it’s also essential to assess what skills you have that can help you run a successful Shopify store. Besides having a passion for the product line, you may need marketing or social media skills to help you promote the store. Look for stores with visually appealing or trendy products that you can promote through your own social media accounts or influencers.
What’s your availability for a Shopify business? Want an established or fixer-upper store?
Also, consider how much time you want to spend on your Shopify business. Some Shopify stores are already well-established and require minimal effort to run, while others may need more work to reach their full potential. In the event that you are committed to devoting time and effort, you can take a more active role in scaling the brand. But, with an established business, you’ll likely need to pay more out of pocket upfront to keep existing customers happy.
What’s your budget?
It’s important to consider your budget when buying a Shopify store. While you may have the funds to buy a higher-priced store, remember to factor in additional expenses beyond the initial purchase price.
Usually, inventory is not included in the sale, so you’ll need to allocate funds for restocking. Don’t forget to take into account platform fees and subscription costs as well.
If you’re planning to hit the ground running with the business, you’ll also need money for things like marketing campaigns, product development, and launching new products. So make sure you’ve got a clear understanding of your overall financial situation before committing to a purchase.
Why is this online business up for sale?
When business owners put up their stores for sale, they often present a positive image of the business and its performance. However, before you make a commitment to buying a Shopify business, it’s crucial to have a conversation with the seller to get the full story behind the sale.
Sometimes, the seller might be looking to fund a new project or move on to something else entirely. However, there could be underlying issues with the business that the seller is struggling to address. These issues could range from legal problems to intense competition in the market, which can be costly and challenging to overcome.
Having a comprehensive discussion with the seller is also an opportunity to learn more about the business. You can find out about the supply chain, the number of hours required to run the business, and how the seller attracts customers. This information can help you make an informed decision about whether the business is a good fit for you.
Why do you want to buy an eCommerce business?
When considering starting your own eCommerce business with Shopify, it’s important to ask yourself a fundamental question: why do you want to become a Shopify seller? The answer will help you determine what type of Shopify business to buy, as well as whether Shopify is the right platform for you.
If you’re looking to replace your current income, purchasing a profitable Shopify store that has a proven track record might be your best option.
Alternatively, if you’re seeking a side hustle, a more hands-off platform like Amazon FBA could be a better fit.
For content site owners who are looking to expand into eCommerce, Shopify is an excellent choice because it can integrate seamlessly with your existing website. Identifying your motivations behind becoming a Shopify seller can also help you decide whether building a business from scratch or buying an existing business is the right path for you.
Overall, taking the time to consider your goals and aspirations will help you make informed decisions when it comes to starting your own online business with Shopify.
In the end we can say that purchasing an established Shopify store can be an excellent opportunity for aspiring entrepreneurs looking to start their eCommerce journey. By buying a store that is already established and successful, you can skip the foundational work and start earning revenue from day one.
Moreover, you will have access to an established brand name, professional ecommerce website, inventory management systems, and established supply chains.
However, it is important to do your research and due diligence when buying a business to avoid unpleasant surprises down the road. Although there are some challenges to purchasing an existing Shopify store, such as navigating the backend of the platform and marketing the store, these can be overcome with the right mindset and approach.
Overall, buying a Shopify store can be a smart and profitable decision for those looking to start an eCommerce business without the hassle of starting from scratch.
Frequently Asked Questions
What is the price of purchasing a Shopify website?
Shopify websites costs vary. On average, the development of a Shopify website with standard features can incur a cost ranging from $3000 to $6000.
What is the average income of a Shopify store owner in the year 2023?
A Shopify owner’s monthly income is approximately $3,897.