Buying an eCommerce / drop-shipping business

[S Isaac]

Hiya,

I've been offered a site that runs oscommerce & the website scores terribly on page speed test and not built on wordpress from what I can see, All initially off-putting, but it seems to be profitable. I'm thinking move the site to wordpress, onto a better ecommerce platform and faster server too and basically improve the site/conversions/sales/SEO etc.

It comes with the customer database etc, so I was thinking do all of the above and then send a discount code to all past buyers as part of the 'relaunch' to quickly recover the costs of transferring the site over. Then look to do a discount for refer a friend etc.

Does any of this sounds like a good idea, or is it more a case of if it's not broke, don't fix it?

Anyone had any experience buying an up and running ecommerce/dropshipping site? Anything to look out for?

Also, I assume I use Escrow of some sort to provide some form of security.

 

[fisicx]

If it works and is making a profit don’t mess with it.

Migrating to Wordpress could well be a backwards step. Migrating to a different ecommerece package may be a better solution. But it may totally screw up all your existing traffic.

 

[Shopclicks]

I'm thinking move the site to wordpress, onto a better ecommerce platform and faster server too and basically improve the site/conversions/sales/SEO etc.

How much are they spending on advertising?

 

[japancool]

and not built on wordpress from what I can see

There are literally millions of e-commerce websites out there that are not built on Wordpress.

 

[S Isaac]

How much are they spending on advertising?

around £700/month

 

[S Isaac]

There are literally millions of e-commerce websites out there that are not built on Wordpress.

I just figured wordpress was better/easier to customise/maintain etc, with plugins etc for things like product reviews, SEO, and generally easier to use for a novice (like me)

 

[S Isaac]

If it works and is making a profit don’t mess with it.

Migrating to Wordpress could well be a backwards step. Migrating to a different ecommerece package may be a better solution. But it may totally screw up all your existing traffic.

I'm trying to get more details. They pay for 'marketing' but I don't know if this is PPC/SEO or a bit of both.

 

[Shopclicks]

I just figured wordpress was better/easier to customise/maintain etc, with plugins etc for things like product reviews, SEO, and generally easier to use for a novice (like me)

What platform are they on now?

 

[S Isaac]

What platform are they on now?

No idea sorry.

 

[japancool]

No idea sorry.

I thought you said they were running oscommerce.

 

[fisicx]

I just figured wordpress was better/easier to customise/maintain etc, with plugins etc for things like product reviews, SEO, and generally easier to use for a novice (like me)

If you are a novice you will need lots of help migrating the site away from oscommerce. It’s really easy to make right old mess of things.

I'm trying to get more details. They pay for 'marketing' but I don't know if this is PPC/SEO or a bit of both.

Or they may well be wasting their money.

You also need to find out how many hours they put in each week. The supposed profit may be nothing of the sort. You need access to the books.

 

[Shopclicks]

I thought you said they were running oscommerce.

I thought the OP meant Open Source ecommerce but I see it's a platform. Never heard of it or seen an oscommerce site.

 

[fisicx]

I thought the OP meant Open Source ecommerce but I see it's a platform. Never heard of it or seen an oscommerce site.

Used to be very popular.

 

[S Isaac]

I thought you said they were running oscommerce.

Yeah, I thought that's just what they used to sell. But they may have built the whole site on it.

 

[S Isaac]

If you are a novice you will need lots of help migrating the site away from oscommerce. It’s really easy to make right old mess of things.

Or they may well be wasting their money.

You also need to find out how many hours they put in each week. The supposed profit may be nothing of the sort. You need access to the books.

Good point, will ask how many hours they spend on it.

I've seen the books and verified the sales figures, so all looks good that side of things. I was just thinking of how to improve the site and sales, but maybe best left as is and create a new site using the same suppliers but build it out on wordpress and see how it compares.

 

[Shopclicks]

the website scores terribly on page speed test and not built on wordpress from what I can see,

maybe best left as is and create a new site using the same suppliers but build it out on wordpress and see how it compares.

Be aware that there are fast Wordpress sites and slow Wordpress sites. A lot will depend on the theme you choose. Particularly when using Woocommerce. You should ask here for advice if you have limited experience with Wordpress.

 

[James Woodham]

Sorry not helping with your question, but interested in when you said you have been offered the site— did you mean you have bought it, or was this a literal gift?

 

[S Isaac]

Looking to buy it.

Sorry not helping with your question, but interested in when you said you have been offered the site— did you mean you have bought it, or was this a literal gift?

Buying a site, possibly two of them.

 

[James Woodham]

Looking to buy it.

Buying a site, possibly two of them.

Ok cheers, I'm interested in this sort of thing as well so it kinda caught my attention

 

[S Isaac]

Ok cheers, I'm interested in this sort of thing as well so it kinda caught my attention

Do you have any experience with it?

I don't but I'm very likely to bit the bullet and buy a few sites. I've now seen the transaction history and I'm very keen to go ahead. I can see a significant number of improvements that I think will help it increase visitors and conversions.

Then I'd look to automate as much of it as possible and possibly buy more sites.

 

[AlanJ1]

I was thinking do all of the above and then send a discount code to all past buyers

Are they opted in? GDPR won't allow this unless they are fully opted in.

They pay for 'marketing' but I don't know if this is PPC/SEO or a bit of both.

How can you consider buying a site if you don't know the answer to this?

Have you looked at there analytics to see where traffic is coming from?
Are you getting just the site, or inclusive all social media accounts etc?
Where are they getting products from? Are you getting access to the same stock?

There's literally hundreds of questions I would ask before buying a site, especially a dropshipping site.

 

[S Isaac]

Are they opted in? GDPR won't allow this unless they are fully opted in

Some are, some not. But if I message them all to advise them their details have been purchased as part of the acquisition, then I (guess I) could ask them to opt in. But not market to them if they don't.

.



How can you consider buying a site if you don't know the answer to this?

This is why I'm on here, seeing what others thing I should find out.

Have you looked at there analytics to see where traffic is coming from?

Pretty much all PPC from what I can see.

Are you getting just the site, or inclusive all social media accounts etc?

Site, sales data/customer database. No SM accounts exist (so decent room for improvement)

Where are they getting products from? Are you getting access to the same stock?

Drop-shipper to be disclosed & confirmation they'll sell to me is part of the deal.

There's literally hundreds of questions I would ask before buying a site, especially a drop shipping site.

Feel free to list them, I've not owned/operated a drop shipping business before, but I'm quite keen on this.

 

[AlanJ1]

Some are, some not. But if I message them all to advise them their details have been purchased as part of the acquisition, then I (guess I) could ask them to opt in. But not market to them if they don't.

Don't guess with GDPR it can be a costly mistake. You never know who is on this list and who they work for. I have heard horror stories,

I would say you cannot ask them to opt-in. You get this chance on sale, not whenever you want to later on.

On the PPC side, who manages this? £700 isn't a lot but could easily be scaled up or down.

Is it just one drop-shipper? How do they manage stock into your site to avoid OOS / customer service issues.

Do you plan on spending time on the site after? Depending on order volume you will get multiple where's my delivery emails / calls from customers?

 

[James Woodham]

Do you have any experience with it?

I don't but I'm very likely to bit the bullet and buy a few sites. I've now seen the transaction history and I'm very keen to go ahead. I can see a significant number of improvements that I think will help it increase visitors and conversions.

Then I'd look to automate as much of it as possible and possibly buy more sites.

I'm also interested in it, I've managed the development for, not bought, several sites for agencies. My interest is now more on how viable buying established sites really is, for myself.

 

[fisicx]

Still waiting for the answer to the question: what’s the turnover and what’s the profit?

If all leads come from ppc you need to know how much this costs.

It’s not looking like a business worth £9k

 

[S Isaac]

Still waiting for the answer to the question: what’s the turnover and what’s the profit?

If all leads come from ppc you need to know how much this costs.

It’s not looking like a business worth £9k

T/O of approx £72k last year.
Profit of around £25k

 

[fisicx]

T/O of approx £72k last year.
Profit of around £25k

Is that after all expenses, tax, insurance and wages?

 

[S Isaac]

Is that after all expenses, tax, insurance and wages?

Not tax or wages, but all other costs, including the PPC, payment processing, product & shipping etc.

Which is why I want to automate as much of it as possible so it's fully end to end and then there's virtually no wages, and then I can concentrate on growing it.

 

[AlanJ1]

Okay first major problem you have. You are about to breach the VAT threshold. Can you still compete on selling price?

 

[Socio South West]

How slow is slow? There are a stack of reasons why this may be, and without looking at the back end of the site thoroughly you shouldn't be thinking of an immediate site replacement just on the grounds of site loading speed if the consumers are everyday online shopping peeps - as long as its loading within a reasonable time (and someone will have the stats on this) it shouldn't be a major concern at this stage.

You are buying the business based on its performance and what it is at the point of sale.

Get your feet under the desk, have a good look round and then decide how you go forward with the site to get it to do what you want it to do.... The problem in my experience is that if you ask 99 web developers you will get 100 different answers! ,

 

[S Isaac]

I wouldn't change anything for a few months. Ideally, once I've recouped my initial investment. That way, if I kill the site/sales etc, it's not really cost me anything.

Need to look into the VAT side of things and how that's impacted by selling internationally.

 

[antropy]

I've been offered a site that runs oscommerce & the website scores terribly on page speed test

OSCommerce is a pretty old platform these days and it's been superseded by the other open source ecommerce platforms like OpenCart, Magento, WooCommerce, Prestashop, etc.

In fact the OpenCart founder, Daniel Kerr originally worked on OSCommerce before he decided he could build a better platform and started OpenCart.

The database structure of OpenCart is actually still very similar to OSCommerce, so it would be easy to migrate from OSCommerce to OpenCart and that is something we could do for you, email is below.

Paul.

 

[AlanJ1]

Need to look into the VAT side of things and how that's impacted by selling internationally.

I wouldn't worry about international. Get the UK right first.

VAT will kill your margin if your prices can't handle it.

 

[fisicx]

Which is why I want to automate as much of it as possible so it's fully end to end and then there's virtually no wages, and then I can concentrate on growing it.

This all depends on the website and the dropshipper. It might not be possible to automate as you want.

That being said, if they only want £9k you can cover that in the first 6 months which means it's not such a bad deal after all. One does wonder why that are selling at such a low price. Always makes me suspicious.

Did you ask then how many hours they spend each week managing the orders? A quick estimate suggests around 30 order per week. 10 minutes processing each one is 5 hours or an hour each day. Not too arduous.

 

[S Isaac]

I wouldn't worry about international. Get the UK right first.

VAT will kill your margin if your prices can't handle it.

The majority of sales are international.

EDIT:
Also, I'll be setting up a new Ltd to incorporate the business, so starting point is zero for VAT.

 

[S Isaac]

This all depends on the website and the dropshipper. It might not be possible to automate as you want.

That being said, if they only want £9k you can cover that in the first 6 months which means it's not such a bad deal after all. One does wonder why that are selling at such a low price. Always makes me suspicious.

Did you ask then how many hours they spend each week managing the orders? A quick estimate suggests around 30 order per week. 10 minutes processing each one is 5 hours or an hour each day. Not too arduous.

Yeah, that's what I was thinking. Get through 6 months, get funds back, then try to improve etc.

Says it's about 20 hours a week.

 

[fisicx]

20 hours is a big chunk of time to process orders for a dropshipper. It sort of suggests it’s not a full dropshipping service. You might need to investigate this a bit more. It might not be possible to automate.

Where is the dropshipper?

 

[S Isaac]

20 hours is a big chunk of time to process orders for a dropshipper. It sort of suggests it’s not a full dropshipping service. You might need to investigate this a bit more. It might not be possible to automate.

Where is the dropshipper?

They're in USA, Canada and UK (One company, multiple locations).

Looking at what he says he does, it shouldn't take me 20 hours to do. It's basically copy & paste order details and then pay invoices. Only time consuming bit may be dealing with queries. But again, I can already see loads of things to improve to help speed things up (better descriptions on site, multi-currency listings, FAQ etc etc)

But for the sake of £9k and possibility of it back in 5 or 6 months, I'm comfortable enough to proceed. Subject to terms being agreed with him. However one of his two sites is now under offer so am waiting for him to come back to me to see what's what, time difference to deal with too as he's probably asleep right now.

 

[S Isaac]

OSCommerce is a pretty old platform these days and it's been superseded by the other open source ecommerce platforms like OpenCart, Magento, WooCommerce, Prestashop, etc.

In fact the OpenCart founder, Daniel Kerr originally worked on OSCommerce before he decided he could build a better platform and started OpenCart.

The database structure of OpenCart is actually still very similar to OSCommerce, so it would be easy to migrate from OSCommerce to OpenCart and that is something we could do for you, email is below.

Paul.

Thanks, will review options once I've had and run the site for a few months to fully understand how it all works.

 

[AlanJ1]

The majority of sales are international.

Interesting.

Familiarize yourself with VAT / export / IOSS.