#1. Ignoring The Traffic Quality
One of the common mistakes many buyers often make is not looking at the traffic quality.
Instead, they only look at how much traffic a site gets.
But the truth is that NOT all traffic is equal.
A store may be showing a high number of visitors, but most of it could be low-quality or even fake.
Some sellers also tend to use paid ads to drive short-term traffic. This kind of traffic disappears as soon as the ads stop.
Other times, the traffic may come from regions where buyers rarely convert.
And in some cases, sellers may use click farms or bots to inflate their traffic numbers.
Therefore, if you only focus on the traffic volume, you’ll end up missing the real picture.
You should ask: Where is the traffic coming from? How does it convert?
Ideally, you should look for stores that have strong, steady organic traffic from search engines or direct visits, not just ads or social media spikes.
Read This Next: How To Verify Traffic Sources When An Buying E-commerce Business
Read This Next: Drive More Traffic To Your Ecommerce Site Through Instagram
We Help You Buy / Build, Manage and Scale E-commerce Brands for an EXIT
E-commerce Simplified for Busy Individuals – We handle the buying, building, and scaling, so you can focus on what matters.
Growth-Focused Strategies – From sourcing to marketing, we drive growth and prepare you for a profitable exit.
Expertly Managed Exits – We build a high-value brand designed for a Lucrative exit.
#2. Overlooking Customer Retention
A healthy e-commerce store shouldn’t just find new buyers. It should also keep the old ones (loyal ones) coming back.
That’s customer retention!
And it is key to a profitable e-commerce business.
If you buy a store that constantly needs you to chase new buyers, you’re simply stepping onto a treadmill.
Unknown to most people, repeat customers will cost less to acquire and often spend more. You pay up to 5x less to keep a customer than to get a new one.
As Harvard Business Review notes, a 5 percent rise in customer retention can boost profits by 25 to 95 percent.
Ask the seller to provide you with data on repeat purchases.
You want to check whether the store uses email marketing and a loyalty program. Also, look at customer reviews.
All these will give you clues about how happy buyers are and whether they return.
#3. Misreading Financial Statements
Financials are one of the things that can lead you to a bad investment decision in e-commerce acquisitions if you're not careful.
It gets even worse when you discover the hard truth that sellers can provide you with fake figures and screenshots that make their store numbers clean at first glance.
Some sellers may inflate profits by delaying costs or including personal income.
Others might count one-time spikes as regular income.
When conducting e-commerce due diligence:
You MUST see at least 12 months of profit and loss statements
You MUST ask for details on ad spend, shipping fees, returns, and software costs.
You MUST check for hidden costs like warehouse fees or unpaid taxes.
QuickBooks warns that small businesses often misclassify up to 30 percent of their expenses, which can skew valuations.
This should be your cue to NOT just rely on the seller’s numbers.
Consider hiring an accountant to help you verify the numbers. Yes, you’ll pay a fee upfront but this simple step can save you thousands later.
#4. Failing to Understand Supplier Risk
Dependable suppliers are a key pillar of any successful e-commerce business.
Therefore, if you’re looking at a store where the owner relies on a single supplier or a personal connection, you might want to rethink acquiring it.
Think about it;
Once you take over the business ownership, the supplier might raise prices, delay shipments, or end the relationship.
And this could leave you high and dry!
Supplier risk is one of the most overlooked issues in e-commerce deals.
You want to make sure the supply chain is stable and documented.
Ask the seller if there are contracts in place. Check if the supplier relationship will transfer to you.
Also, ask what happens if the main supplier goes out of business. Do they have backups?
Bottom line: Get a store with a clear supply chain map if you want it to continue operating smoothly after acquisition.
#5. Underestimating Technical Debt
We have many cases of existing e-commerce sites that are held together with old plugins and outdated code.
While these stores seem to work fine on the surface, their backend is usually a mess.
Acquiring such stores could be a huge liability for you in the sense that fixing them after you buy can cost you thousands and take months.
How to avoid this?
It’s quite simple…
Always inspect the tech stack of a store you’re interested in.
Find out what platform the store uses. Ask when it was last updated.
If the site runs on custom code, ask who built it and whether they’re still available for support.
A Shopify or WooCommerce site may look easy to manage, but it can hide broken apps or hacked-together solutions.
You need to know how much work it will take to keep the store running. In some cases, the store could prove cheaper to rebuild than to repair.
We Help You Buy / Build, Manage and Scale E-commerce Brands for an EXIT
E-commerce Simplified for Busy Individuals – We handle the buying, building, and scaling, so you can focus on what matters.
Growth-Focused Strategies – From sourcing to marketing, we drive growth and prepare you for a profitable exit.
Expertly Managed Exits – We build a high-value brand designed for a Lucrative exit.
#6. Forgetting About Legal and IP Issues
Legal problems can sink your deal fast. Some e-commerce sellers might use images, text, or product designs they don’t own.
Others may be running their stores under brand names they didn’t register.
Now, if you buy such a store, then you’ll simply buy those problems too.
To ensure you’re on the safe side, we advise you to always check if the domain name, brand name, and logo are legally owned and transferable.
Ask if the business has any outstanding legal claims.
Go ahead and run a trademark search for the brand name!
In 2023, the World Intellectual Property Organization handled 6,192 domain-name disputes, a 68 percent rise since the pandemic began (WIPO) WIPO.
This trend clearly shows you the risk of cybersquatting and trademark fights.
And that should alarm you to NOT assume a store is clean just because it hasn’t been sued yet. You cannot assume the brand is clean.
#7. Skipping Post-Sale Support
Many buyers of e-commerce businesses expect a smooth handover.
But have you posed and thought about what happens if the seller disappears right after the sale?
This will definitely leave you feeling stuck.
Even after you’ve successfully transferred the ownership of your store, you still need the previous owner’s help in understanding things like:
How the store runs
Who the customers are
What to do if something breaks, etc.
For this reason, we advise you to negotiate a clear support period after the sale.
This could be two weeks or two months, depending on how complex the business looks.
Ask the seller to document daily tasks, log-in details, supplier contacts, and key processes.
A good seller should be willing to help you succeed. If they sound reluctant to offer you post-sale support, that’s a red flag!
Wrapping It Up
Buying an e-commerce store is a big commitment and not just a shortcut to owning an online business. Many deals fall apart because buyers don’t ask the right questions or look beyond the surface. Closely evaluating key aspects like traffic quality, customer retention, financial reports, tech, and legal will help you make a more informed decision.
If need be, use third-party help to assist you. Don’t rush it. If a deal feels rushed or unclear, it’s better to walk away than fix a broken business later. With careful review and the right questions, you can find an e-commerce store that truly has long-term value.
At Trend Hijacking, we can help you find the best e-commerce deals that are profitable and have strong growth potential. We’ll guide you through the whole acquisition process. After buying, we’ll help you grow it to 2-4x, so you can maximize your profits should you wish to sell it. Click Here for full details on how we can get you started owning a profitable e-commerce business.
A Done-For-You E-commerce Business
Discover how we Build, Launch, and Scale a 6-figure/month Business for You
Learn more
