eCommerce Business for Sale

Before, if we needed to purchase some items we used to go to the flea market like the Pasar Chadni Chowk market and browse things on hand. We look around the local stall, talk with the owners and bought groceries and other items. We all have that precious memory of holding onto our mother’s saree and looking around at all the local stalls, hoping that maybe Baba will buy us a Gulab Jamun. However a crisis has influenced not only India but the world in the recent years. Yes, as we are very well aware, it is the infamous COVID-19 pandemic. During the COVID-19 era, to avoid being infected with the COVID-19 virus, people had to resort to remote sales, companies had to interview essential applicants through remote interviews and even schools had to adjust to the situation by carrying out classes through remote video classes. The world adjusted to the ‘non-contact’ remote way of life. 

During this ‘non-contact’ trend and way of life, a certain business sector showed tremendous growth. It is the online e-commerce business market. Due to COVID-19, the increase in remote shopping trend lessened the burden to find a store and greeting your customers became less troublesome. A lot of people dived into the e-commerce business market, starting their own e-commerce websites as it required not too much capital. Of course, in addition to this huge companies like Myntra and Zara flourished even more online. 

E-commerce websites has the advantage of being able to buy the items anytime anywhere thanks to the fact that we always carry around our mobiles wherever we go. Marketing utilizing various SNS platforms such as Whatsapp, Telegram, Facebook allow online shopping to become more interpersonal with our everyday lives. Thanks to this we expect the e-commerce business market do continuously grow thanks to various people ranging from Gen Z youths living in Kolkata to Millennials living in Jaipur. 

So your worry, as like the worry of your mama next door, is what might happen if the business I started doesn’t succeed? In our case the worry will be, “What will happen if our e-commerce website doesn’t operate well?” “It’s my first time operating an online e-commerce business, can I do well?” even with a solid trendy hot item that will lead sales in the online market. This is an inevitable worry that all future online entrepreneurs worry about in one point of their business venture. 

The simple and clear solution to solve this problem is through buying an already operating e-commerce business. If the online business is already in operation, a certain amount of revenue is guaranteed and the operating mothed is already authenticated. Through stable operations and profits you can reduce the risk of your business going belly up. 

So shall we see how we can effectively buy an e-commerce business online?

What is buying and selling an e-commerce business?

Buying and selling an e-commerce business literally means to acquire or to offer for sale an online business site at a certain price. You can acquire an existing e-commerce business that someone else has managed, or you can sell yours depending on the negotiating terms with a potential buyer. It is the transaction of ownership of the online business for a certain financial price. 

Can we buy and sell an e-commerce business in India?

Of course!? You can start your own business through buying an e-commerce business. Normally we call the buying and selling of a business Merger & Acquisitions, or M&A for short. Mergers & Acquisitions, may sound very complex and grandiose, but to phrase it simply, it is giving the ownership of the business you are running at a certain price. The same goes for an online shopping platform; it is all some form of M&A. A shopping mall is no different from any other businesses and can be up for bids to the highest buyer or lowest seller. Through buying an existing e-commerce business a certain amount of profit is guaranteed and the managing process is also solid as the digital infrastructure is already in place and allows you to continue your business quickly after acquiring your very own e-commerce business. 

Where can I buy an e-commerce business in India?

There are various ways of buying an e-commerce business, but the best method we recommend for you is to utilize an online site trading platform like Gruuz! We specialize in buying and selling of online sites and businesses, especially e-commerce business websites!

You can look up a specialist or broker on online sites such as Naukri, or even contact your Chacha working at Bhilwara to get in contact with the owner of a thriving store you may be interested in. Even if you get in contact with the owner, he or she may not have any intention of selling their business(why would they? It’s thriving) and the transaction can’t be completed. Even if you are able to complete the transaction and get the OK sign from the owner, you will be left with the agony of footing the tremendous bill for the broker.

Best Indian Platform for Browsing eCommerce Websites for Sale

Is it better to buy an existing e-commerce business than to start from scratch?

Yes, there are many advantages to buying an existing e-commerce business for sale than creating a new one.

1. Rapid transition to starting your business

If you are starting your business from point zero, you might find yourself bewildered with so many things to handle. What do we sell, do we sell it domestically, do we sell it to Tier 1~3 cities only, do we sell internationally? Don’t you have that same nauseating feeling of getting your CUET test scores back, as if we don’t know the answer? To start an e-commerce business you have to think up a name for the company, file Form INC 32(SPICe+) form to incorporate the business legally, get a certificate of incorporation. Afterwards, you have to conduct regional and national market research, choose a brand name, register a domain that is in correlation with your brand, choose an online platform to sell you items such as Amazon, Tata or Flipkart, design your own e-commerce business website(not to mention additional costs incurred) and this all takes up your time, money and a tremendous amount of effort. 

However if you are already operating an e-commerce business that is online, it has a certain market share, well selling products, brand recognition and an online e-commerce business website that is ready for you to conduct your business ASAP. All the previously mentioned problems can be minimized so that you can conduct your business right away. 

2. An already existing client base and marketing channels

In business, we all have passions and fervor to make our business flourish. However we also hear many instances when businesses had to close down or declare bankruptcy due to low sales revenue. When we hear about these negative instances, we tend to think “Can it not also happen to me?” and that terrifying feeling of anxiety creeps up on us. 

If we start a new e-commerce business from scratch, we will have to promote the product brand, ensue many marketing strategies on various channels for brand promotion and marketing. This of course takes much time and financial cost. However, even at this expense this still does not guarantee a high return in sales and yield. 

However if you start your business with an already existing e-commerce business, your burden will be lessened. A well operating e-commerce business is proof that the product brand has a strong influence in the market. If you acquire an e-commerce business with a strong brand recognition that already has a well-built customer base, your revenue is guaranteed through the existing clientele base. 

Also, if the customer base is strong, there is a high probability that marketing channels are well put into place. The existing platforms of the e-commerce business, such as Instagram or Facebook, can be utilized to your benefit. The previous marketing campaigns can be used to aid in your future marketing needs. This can lead to saving your promotional costs and also maintaining high marketing publicity after you have retained ownership of the e-commerce business website. 

3. Stable management

“E-commerce, isn’t the essence of it all round up to selling goods online?” This statement is half right, half wrong. Like we say in Hindi, नीम हकीम खतरा ए जान(A little knowledge is dangerous thing). First selling a product is the key to operating an e-commerce business so it’s not 100% wrong. However, to sell products successfully, it is not simply sales but additional measures and effort must be invested. 

First you need to stock up on the items you have to sell. If you have to manufacture the items you are selling by yourself, you need a place that takes care of your manufacturing needs such as a factory. Also as the factory doesn’t operate by itself, you will need competent and skilled workers. Also, even if you request your goods from an OEM manufacturer, you will need to negotiate the price, the supply amount, the supply cycles and the legal agreements that binds both parties to all these terms. Afterwards delivery of shipment, supply management, customer service and many miscellaneous tasks are awaiting for you to be taken care of. 

But if you start your business through buying an eCommerce business, you can take care of all these problems once and for all by using the already existing supplier that the previous owner had contracted with. Stable supply is guaranteed and afore mentioned tasks can be minimized through this process! Also you can hire the current workforce that has worked with the previous owner once you acquire the e-commerce business. This way you will have a strong employee base that is familiar with product manufacturing, in good relations with supply counterparts, apt at customer service. Also you won’t have to spend excess fees in training and hiring new Human Resources. 

Creating your own eCommerce Business vs Starting off with an existing eCommerce Business

Elements to look at when buying and selling an e-commerce business for sale

Compare	Starting a new e-commerce business	Buying an existing eCommerce Business
Brand	Need to create a new brand and acquire brand recognition	Brand and brand recognition and presence in market place already exists
Market research and planning	Need to conduct market research and planning for product to sell	Completed
Product supply	Need to select a manufacturer and secure manufacturing facilities	Stable supply chain in place
Management and workforce(HR)	Need to learn experience in management and hire new employees to hire and train	Stable operations with ready professionals
Securing clientele and conducting sales	Need to conduct marketing channels and campaigns to acquire new clients and customers	Stable sales through already existing client base
Marketing channels	Need to secure new marketing channels	Successful marketing channels already in place
Conclusion	Need… more…. time..	Let’s reap in the rupees!

Introduction Gruuz: Listing Platform of eCommerce Business for Sale

We will look in detail to what to look out for when buying or selling an e-commerce business for sale following the steps on Gruuz’s site layout.

1. Introduction

The first key element we must look at is the introduction that sellers wrote to show their e-commerce business for sale. E-commerce business owners introduce a variety of information so that potential buyers are induced or show interest in their site. Let’s look into detail what points are classified as good examples.

1-1. Area of business

This is the most basic and important area as it tells us what item or product the e-commerce business is selling. There are tens of thousands of items that are sold in an e-commerce business for sale. First through the category of the e-commerce business we will have a broad concept of whether it is fashion, electronics furniture or groceries and etc. If for example the business area is fashion, this also ranges from traditional clothes such as saree for women and veshtis for men to everyday wear of t-shirts and jeans. This also can be categorized into fashion and clothes for men, women and children. Through our introduction, you can find out if the area of business sales is in your interest. Also if the item is a patented product or a trendy hot new item and has a competitive edge in the market, this will influence your decision in buying the e-commerce business for sale.

1-2. Main client base

You can also look at the main client base and relevant information. After you buy the e-commerce business for sale you have to continuously develop and revolutionize the item or business area you are most confident in to keep up with changing trends. For example even if an e-commerce business that sells clothes is in the broad sense, selling clothes, it is very different from the fashion trend that Gen Z youth prefer to the clothes that our Babas may prefer. Analyzing the main customer base of the site, for example if it is targeting the Indian youth, or targeting the tech savvy digital engineers in Bengaluru, or our elders in rural villages in Chandigarh, can be understood before-hand and through this information trend, product development and business management can be confidently carried out after buying the e-commerce business for sale. 

Also if the main customer base is not restricted to domestic, but broadens out to overseas is also an element to consider. Just last year, Shah Rukh Kahn’s Jawan was met with critical success overseas and Bollywood is garnering more fame year by year. Indian culture has been steadily climbing in Southeast Asian markets. Through acquiring a successful Indian e-commerce business for sale, you make a market presence in overseas markets ranging from Southeast Asia to Africa to Europe

1-3. Management Information

The e-commerce business’s actual operating information will act as a critical element after you buy the e-commerce business and act as an important precursor and point of judgement when deciding to acquire it.

We’ll give a specific example using the information regarding product supply. Information about whether the items are self-manufactured or imported by an OEM contractor, or provided by a wholesale broker in between can be provided and used to your advantage. A stable supply of the product is essential, and guaranteeing a continuous line of supply will definitely reduce the risk factors of your business.

Also if a purchase order is in place, the difficulty of getting the product to the customer can be evaluated through the business management site and product management. We can analyze how product delivery is handled, how stock management is handled, how much time must be allocated to operating the business and how much cost is needed to keep the e-commerce business up and running.

Lastly, it is important to find out how long the business has been running for. Like the saying “Beware of an old man in a profession where men usually die young,” if an e-commerce business has continuously maintained steady sales and revenue for a long time, it is proof that it has a solid and stable sales base.

1-4. Reasons for sales and conditions

There may also be additional reasons or motivations as to why the seller wishes to sell his e-commerce business website. They may be based on personal reasons such as deteriorating health or immigrating to another country. These reasons will not pose as a big problem after buying the site, but if legal reasons are the motivation for selling the site then you might wind up in a legal dispute afterwards.

A positive factor that may influence your decision to buy an e-commerce business for sale is to provide assistance after selling their e-commerce business. This will definitely help you easy your transition after you buy the e-commerce business. Buying an e-commerce business doesn’t mean that the race is over, its actually only just starting. You have to take the reins and operate the business successfully. Thus if we receive the ups and downs and the essential information from the previous site owner, it will speed up your adapting to the maintenance of your new e-commerce business and help you immensely in operating it.

2. Revenue and net profit

The most important element that captures the attention of the buyers is revenue and net profit. The most important element that influences a buyer’s decision to make up his mind in buying an e-commerce business for sale is the amount or revenue or net profit the site generates. The sales revenue and net profit of the e-commerce business is irrevocably the most direct signal to the profitability of the e-commerce business website.

The revenue is the total amount of sales accrued in all items sold on the e-commerce business. It can simply be understood as the gross amount of all items that have been purchased by customers. This can also determine the sales volume of the products and can define the actual demand of the product.

The net profit on the other hand is the actual yield that is gained when exempting manufacturing costs, employee wages and other miscellaneous costs such as overhead. This is a more definitive signal to the actual money that the e-commerce business brings in.

Our items page shows us how much cost it takes to maintain the e-commerce business website by showing the difference between revenue and net profit.

The following are a few examples of sales related documentation

• Sales receipts
• Audit Reports (For businesses where the total sales, turnover, or gross receipts exceeds Rs.1 crore in the previous year.)
• Platform related sales transactions(Amazon India’s sales transactions etc)

3. Users and webpage views

You might also think that users and page views are a negligible element when considering buying an e-commerce business website, but it is actually in direct correlation with the e-commerce business’s sales and net profit. If there are many users who are visiting the e-commerce business website, it signifies that there are many potential buyers of your product which will lead to greater revenue.

The ratio of users who visit an e-commerce business website and actually buy the sales product is called ‘purchase conversion rate’. According to statistics, the average purchase conversion rate of an e-commerce business is about 2%. For example if 100 Indians visited an e-commerce business website, it means that 2 Indians actually bought an item online.

Thus, if 50 Indians visited the business website only 1 will probably by an item, but if 10,000 Indians visit the website then 200 sales transactions will result, if 50,000 Indians visit then this will lead to 1,000 sales. Thus this is also a direct indicator of sales revenue.

Also a high volume of website views means that many potential users(customers) are interested in the products online and this also leads to sales.

Gruuz provides a function where if an e-commerce business applies Google Analytics with their e-commerce business, it can provide verifiable information of actual customers and webpage views through Google. The information given is not limited to simple average user numbers and webpage view statistics, but monthly and yearly statistics, range of international users, range of channel of accessing the e-commerce business website and much more. Thanks to this function, we can verify if the user number is increasing or decreasing and can also tell how much of the customer base are domestic or international. This in all will most definitely have a positive effect on making your decision to buy the e-commerce business.