Thinking about buying an existing online store but unsure where to start?
Maybe you're worried about overpaying, getting scammed, or investing in a business that’s all hype and no substance.
It’s no secret that navigating the world of e-commerce acquisitions can feel overwhelming, especially with so much at stake.
But what if there was a way to simplify the process, avoid costly mistakes, and secure a deal that works in your favor?
In this article, we’ll break down exactly how partnering with an e-commerce business broker can help you achieve that and more.
Who is an E-Commerce Business Broker?
An e-commerce business broker acts as an intermediary between buyers and sellers of online businesses. These professionals help connect you with vetted opportunities, handle negotiations on your behalf, and guide you through the complexities of the transaction.
Unlike traditional brokers, these internet business brokers specialize in the nuances of online businesses, ensuring you understand key aspects such as traffic, conversion rates, and scalability.
How Do E-Commerce Business Brokers Add Value?
Here are some ways in which involving brokers in your acquisition journey may prove helpful:
1. Access To Pre-Vetted Listings
The best online business brokers usually boast extensive networks and databases of pre-vetted listings.
This enables them to present you with legitimate, high-performing businesses, reducing the risk of scams or underperforming assets.
What’s more, these brokers often have access to off-market deals, which means less competition and better pricing.
2. Comprehensive Due Diligence
Professional ecommerce brokers will also conduct in-depth due diligence on your behalf.
Specifically, they’ll analyze the online store’s revenue crucial aspects like streams, operational processes, customer demographics, and SEO performance.
This way, they’ll ensure you get the best deal and avoid any costly mistakes.
For instance, a reputable online business broker can help you identify overinflated valuations or hidden liabilities in an online business you’re buying.
3. Negotiations Got Easier!
Negotiating terms when acquiring an online store can be a daunting task, no doubt!
That said, having a seasoned internet business broker by your side will help mediate discussions, ensure fair terms, and protect your interests.
With their years of experience in this space, these brokers will help prevent you from common pitfalls like overpaying or inheriting poor contracts.
When Should You Use an E-Commerce Broker?
Now that you know what value a broker brings to the table, you could be wondering if you must use them.
The truth is, there are certain circumstances when a broker will prove quite helpful to you as listed below…
1. Lack of Market Knowledge
If you're new to buying online businesses, we highly encourage you to use an e-commerce broker.
This way, they will help you demystify the industry jargon and guide you through market dynamics.
Brokers can also educate you on emerging trends, such as the rise of subscription-based e-commerce models.
2. Limited Time for Research
Researching and verifying potential acquisitions can be time-consuming. But having a broker can make this a whole lot easier for you!
They’ll be responsible for curating tailored options that fit your investment goals, saving you time and headaches involved in this whole process.
3. Seeking Optimal Deal Structure
If you ask investors who have worked with the best online business brokerage firms, 99.9999% will agree that they’re quite skilled at structuring deals that balance risk and reward.
This can include seller financing or performance-based earnouts. And what’s better than acquiring that online store at a good deal with favorable terms for you??
How To Choose the Right E-Commerce Business Broker
Follow these tips to ensure you land on the best online business broker to help guide you throughout the e-commerce acquisition process.
1. Look for Industry Experience
Select brokers specializing in your niche, whether it's SaaS, dropshipping, or branded e-commerce. Working with internet business brokers in your preferred niche helps bring industry insights that others may lack.
2. Review Their Track Record
You should also take your time to review the broker’s track record in helping buyers like you with the acquisition process. Check through their previous transactions, success rates, and client testimonials. A trustworthy e-commerce business broker will be transparent about their history.
3. Compare Fees and Services
Don’t make the mistake of hiring a broker without first understanding how much they charge and exactly what you pay for. Standard brokerage fees range from 10%-15% of the final sale price. Ensure the broker you choose offers you comprehensive services like valuation, marketing, and post-sale transition support.
Alternatives To Using a Broker
While brokers offer you immense value, you may still prefer to handle acquisitions independently.
This would be a more viable option if you’re an experienced buyer with access to tools like:
Online marketplaces: Platforms like Flippa or Empire Flippers offer you direct access to a variety of listings in different niches, so you can choose the one that best fits your interests.
Professional advisors: Having accountants or business consultants can assist you with valuation and due diligence.
HOWEVER, keep in mind that these options lack the curated, hands-on approach offered by online business brokers.
Final Thoughts
Working with an e-commerce business broker can help you easily sail through the process of buying an online business. These brokers bring in their expertise, which will help you access pre-vetted listings, conduct in-depth due diligence, negotiate the best deals, and more, saving you money and stress. While you can do it solo, the risks often outweigh the rewards, especially if you are a first-time buyer.
Overall, working with the right broker will help ensure you make informed decisions.
If you’re ready to own an e-commerce business but unsure where to start, we’ll help guide you through every step of the acquisition process. And once you own the business, we’ll help you scale it with proven strategies to drive growth and profitability. When the time is right, we’ll also help you exit for a 3-10x multiple. Book a free call with us today and let’s make your next big success happen.
