Building, Buying, or Investing in eCommerce Business: What Is the Best Option?
Since the pandemic swept across the globe in early 2020, our everyday lives have immensely changed. Almost every industry took a hard hit – from tourism to manufacturing, every business was affected. As a result, the supply chain stalled, and people started losing jobs.
However, we all started blooming intensely, especially in the e-commerce space. We all resorted to the online world for nearly all aspects of our lives, including work, education, entertainment, shopping, etc. E-commerce has become the most important tool for companies to continue generating sales and revenue. Online retail continues to grow every day in importance and influence.
With that being said, many realized the potential of selling on eCommerce and wanted a piece of the cake. But unfortunately, while many managed to build great eCommerce businesses, most didn’t. So, what would be the best option for anyone interested in eCommerce?
Should you join the world of selling online by building your own company from scratch or purchase an eCommerce site that is already established? Or maybe invest in an already established eCommerce platform? Below, we’ll cover all three alternatives, so you can decide which eCommerce meets your needs.
Starting Your Own E-commerce Business
To succeed in eCommerce, you must build a platform that excels on every level. From captivating design to smooth payment workflows, it’s crucial to overbuilding the best user experience and customer support.
By building your platform, you pull all the strings, and you can make everything to your liking. Also, building an online shop anew can cost as little as a few hundred dollars compared to buying an already established business, which can cost up to several hundred thousand dollars.
You first need to determine whether you want to sell your products or services on a reputable platform like Etsy or Shopify and save a few bucks, or choose the former and build your eCommerce website from scratch.
While it’s exciting to start your journey in the eCommerce business with lots of big ideas, it’s better to avoid diving in head first. If you are new to this landscape, focusing on the more praLaunching an Etsy topical route will give you plenty of headaches. On the other hand, it takes no more than 30 minutes to launch an Etsy shop, e-commerce free. But let’s not get our hopes too high too soon.
Most e-commerce businesses close down within the first three months of operation – a whopping 90% fail and plan. So if you plan to start your online store, it might send a shiver down your spine, but don’t be afraid. You can learn a lot from failures – study how and why most startups fail, avoid those mistakes, and launch a business that becomes a part of the successful 10%.
Also, don’t expect your business to be profitable in the first couple of years. After that, you’re in for a marathon, not a sprint.
Buying an E-commerce Business
As we mentioned above, the chances of failure in the e-commerce startup sector are very high, so buying an already-settled business that has beaten the odds is always an option. Also, immediately obtain an already up-and-running business; you can start making money immediately. It is already operating and getting sales, and you don’t have to worry about finding customers; building a web would be best if you have the time and money to start; it would be best if you built it from scratch.
But it would be best if you did your homework first. It would be best if you learned all the ins and outs of the business you’re thinking of acquiring, dug deep, and ensured you’re buying a valuable and safe asset.
Buying an existing and profitable business requires more upfront capital than starting your own. Still, it will provide immediate profit and is a good growth strategy with a decent ROI.
While a viable e-commerce business might provide immediate profits, it’s also possible to buy a smaller, niche business for a slip of the amount you would need to buy that big profitable business. Either you’ll get a return on investment fairly quickly.
Just remember to research and even consider hiring a broker to help you with the purchase. After all, it’s their job to know what to avoid and what to look for.
Investing in an E-commerce Business
When investing in an e-commerce business, it’s safe to know that only 10% of startups pull through and become profitable, as we’ve stated above. So the real question is how to find those that will make it.
It’s a high-risk venture, but the rewards are huge. Of course, if you want to play on the safer side, you can always go for the big players that are already proven but note that they have a significantly lower ROI than startups with high potential.
The industry is in a constant boom, mostly thanks to the pandemic when people got used to going to the Internet for nearly everything. Whatever business you choose to invest in, please research and study the key factors that make it successful. Some attract new customers through expensive advertising and marketing campaigns and may not always generate publicly traded company shares. The easiest way of investing isis by buying publicly traded company shares. You can always review blue chip stocks and analyze which are worth investing in. It’s a long run compared to investing in a high-potential small company, but you’ll eventually get there without losing sleep.
In this article, we covered all the pros and cons of these three alternatives that will guide you into the land of e-commerce and help you digest the basics of starting or buying an online store and even investing in an industry giant. Whichever you choose, get ready for a bumpy road ahead of you.
If you have the means and want to avoid the dirty parts, your best choice straightaway, buying an established business could be the best choice for you. But if e-commerce takes it slow and kindles your passion for creating, then investing in an eCommerce website is the way. But, then, there’s always the third option: investing in the right company is always safer and nearly trouble-free.
No matter which road you decide to take, make sure to do your research before you take the wheel. It’s better to be late than sorry.