Where to find eCommerce businesses for sale

In the good old days, you’d have to go through a business broker, but there are now some great marketplaces you can find deals.

I bought my eCommerce store from Shopify Exchange, the advantage being you get to see all the actual revenue stats, not just claimed. It is a bit of a clunky system to communicate with the sellers.

Here are the best places I found, many having listings from $500

Shopify Exchange

A good amount of listings and gives great reliable data. Found only 1 in 5 sellers responded, though.
https://exchangemarketplace.com

Flippa

Lots of listings on different eCommerce platforms. Has a lot more thought put into it than Shopify Exchange
https://flippa.com

Empire Flippers

More focused on bigger deals. As I was looking for the smaller project didn’t find many that fit.
https://empireflippers.com

Micro Acquire

Great site with a variety of types of businesses. Well worth a look.
https://microacquire.com

Aussie Aquire

As it says on the tin, it is aimed at Australian-based businesses. Pretty new, so only a few listings.
https://www.aussieacquire.com.au

Hope you find a good one.

How much are Ecommerce stores worth?

This was pretty key for me to understand when buying an eCommerce business. The prices vary wildly from $500 to Millions, and I had a budget.

I bought mine for the price of a good holiday excluding the stock. Stock is normally on top of the cost of purchase.

The critical thing to understand about price is what the buyer (us) is willing to pay. That is true of all transactions, buying a coffee, a house or a business.

Therefore you have to determine what you’re buying for. I wanted proof that there is a market for the product.

I worked out to set up and try an eCommerce product idea was $15k ago and would probably take 2-3 goes to find a market.

Therefore I was willing to pay less than that for something that already was selling and had cash flow.

We also have to consider the multiples of profit the store makes. If the store has been making a profit for a few years, ideally three years, the value is a multiple of the annual profit. This can range from 2-5x depending on the growth opportunity. The lower the opportunity the lower the multiple.

You’ll notice lots of sellers think the store could be a “million-dollar” store. The trend of sales more often tells you something else!

The other catch is that owners don’t factor in their time as a cost, and when you do, the store can be unprofitable.

Sellers also think because they spent a lot setting it up (website design etc) it is worth what they paid. I personally didn’t value this as it’s easy to overpay for web design, and I can make them myself.

When you find a store you’re interested in, see what multiples of net profit they’re asking for.

I found two types of stores, really over or undervalued. You want the latter!

It took me two months to find the right store to manage your expectations. Consistently looking on the same day each week was key here.

How to fund buying an eCommerce store

The good news is that you don’t need the total sale price in cash. However, you will need some money upfront. Otherwise, you won’t get far.

When buying a business, you can structure different deals. For example, you can pay 50% upfront and the rest out of profit over six months, this is common in larger business transactions.

Now all of a sudden your store budget has doubled!

I found the prospect of spending my hard-earned cash a little tricky. What if I got it wrong and lost the cash? The trick is committing the cash and putting it in a separate account, then treating it as spent.

As with any investment, only put aside what you can afford to lose. The upside is that the returns can be great.

Funnily enough, I ended up spending a 3rd of my budget and bought it outright because it fit my criteria. However, it was great having the option to buy more stores with more significant price tags.

Should you buy an eCommerce business in a niche you love?

I love wakeboarding and surfing. A lot of my major life decisions were made around being able to do these hobbies more, like moving to Australia and working remotely.

However, when picking an eCommerce business to buy, I didn’t look for a wakeboarding or surfing one.

Why?

I learned from some astute business operators that the key is having a business with sound fundamentals. That became the primary thing I was looking for if a wakeboard/surf store fell into that great.

Also, looking for a specific niche limits your choice.

With that said, I decided in my investment thesis (more on that later) the types of business I didn’t want. One of these was cosmetics. As my wife says, “you’re basic with skincare!” By that, she meant I don’t have an interest in it.

You have to pick something that you have some interest in, but it doesn’t have to be your passion.

This will give you a bigger pool to choose from and make it easier to run over the long term.

How to pick an eCommerce store to buy

The first step to buying an eCommerce store isn’t searching listings.

Like going to the supermarket, buying a business involves setting out a list of requirements so you don’t end up coming away with just doughnuts and Nutella. Which makes you feel good in the short term, but doesn’t last long term!

It’s time to write an investment thesis.

They don’t have to be complicated, just a basic set of guidelines to keep you from making an emotional decision.

Here is a basic version I used to buy an eCommerce store…

  • Established business at least 12 months
  • Could have bumpy sales due to lack of stock control
  • Inventory no drop shipping
  • No fad-products
  • Ideally in Australia (I live there)
  • Could also be the UK (I’m from there)
  • $X,XXX – $XX,XXX AUD cash down plus earn-out.
  • Decent conversion rate
  • Perennial product
  • No extensive sizes i.e. clothing
  • Average order value over $100

This is just what suited me and my position. You can buy them for as little as $500 and you might have other areas of expertise.

Also, I didn’t expect to (and didn’t) get each one of these, but the majority with a few non-negotiables.

The main limiting factor in my investment thesis was Australian based, but as I wanted an inventory holding business this was key for me, but might not be for you.

Time to write yours.

Best Ecommerce Books for Aussie Stores

There is no shortage of tips, tricks and hacks for eCommerce. In my humble experience (which started in 2003), they tend to be what’s popular and often regurgitated in various forms making them seem common practice.

They attract lots of likes, comments and shares, but rarely move the needle or offer long term value. The best source of insights I’ve found is by trying things, talking to others who run store and eCommerce books.

Below are the best books I’ve come across that will help your Aussie eCommerce business, no matter what stage you’re at. Just starting out, up and running or growing.

They are broken down into the following categories

  1. Finance Books (aka get on top of your numbers)
  2. Marketing Books
  3. Starting an Ecommerce Business

Best way to “read” these books

I’m lucky enough to have the gift of dislexia dislyxia dyslexia (why do they make that word so hard to spell?). It means I’m great at problem-solving but find reading very difficult. When I discovered Audiobooks (Audible is my go to for audiobooks), it was a game-changer. Anytime I’m going to the office, walking or travelling I consume them like there is no tomorrow. If an audio version isn’t available I’ll put the effort into reading the book, but it just takes a lot longer for me. An example of this is Stark Naked Numbers, and I’m glad I put the effort in. It answered so many questions for me.

Ecommerce Finance Books

Stark Naked Numbers

Author: Jason Andrews

An unknown classic on making an eCommerce business profitable (a surprising often overlooked part of many eCommerce businesses, as it’s assume growing revenues means profit. Hint it doesn’t).

What you’ll learn

Ultimately how to make decisions about how to setting up and run your eCommerce business profitably. The goal of any smart business is to have more cash in the bank at the end of the month than at the start, this is called “cash flow positive”.

Many people see headlines like “XYZ business worth $100m” and aim for that. The reality is, some Venture Capital businesses invested $10m for 10% of the business, which values it at $100m, even though they are losing money hand over fist and have very little chance of being profitable.

Reading Stark Knaked Numbers will help you avoid building or running an unprofitable business.

I’ve been lucky enough to work directly with the author Jason, and I can tell you he is the real deal. It’s the reason companies like Xero and Shopify ask him to write guides for their customers.

Stark Naked Numbers Book

Profit First

Author: Mike Michalowicz

When I asked a very financially savvy friend how I could learn how to use my accountancy software (Xero by the way, total no brainer) so I could know at any one time how much tax I owed and what free cash I had, they said, just read Profit First. It will tell you everything you need to know!

What you’ll learn

Fundamentally it’s a budgeting book that will help you work out for every AUD$100 in revenue you take, what percentage should go to a separate profit account (profit comes first, see what the author did there), to operating expenses, paying you, taxes and anything else you need. You can then log in to your bank at any time and see how much money you have for specific parts of your business.

I describe this book at the Barefoot Investor for businesses. If you haven’t read the Barefoot investor and are live in Australia, where have you been, it’s a game-changer?

A word of warning about Profit First. The first half is very much selling the idea and getting you hyped up about it. Let’s call this the American infomercial approach (Thigh Master anyone?). It could easily be much shorter and is just a word of warning. It wouldn’t have made this list if it wasn’t worth reading.

Like a few books on this list it isn’t written specifically for eCommerce businesses, but can be easily applied. There is a variation that has been written by another author called “Profit First for Ecommerce Sellers“. I haven’t read it yet (haven’t been able to find an audio book version), but if you need more specific details on how to apply the principles to your eCommerce business I’d start here.

Ecommerce Marketing Books

All Marketers Are Liars

Author: Seth Godin

Another underrated classic on marketing for small businesses.

What you’ll learn

How to build marketing into your eCommerce business so others do it for you.

Every now and again a book comes along that changes the way I see the world. This is one of them. Even though Seth Godin is well known in marketing circles for his other books, like Purple Cow, All Marketers Are Liars isn’t that well known. It explains how small businesses can beat big companies appealing to niches and becoming a storyteller about your brand instead of just talking about the product (which is what most eCommerce businesses do).

This approach results in your customers talking about you to others, which is free marketing and will help reduce your online advertising costs, which is a significant cost for any eCommerce business.

Even though it’s not specifically written for eCommerce, it’s my most recommended book, because if you read it with your eCommerce business in mind you’ll be able to apply the principles to your business.

All Marketers Are Liars

Build A Story Brand

Author: Donal Miller

A step by step guide to REALLY branding your eCommerce business

What you’ll learn

Your one sustainable competitive advantage in Ecommerce is your brand (that is how people feel about your business, not your logo and colours used). Although this book is clearly a lead generating tool for the authors, the fundamentals laid out will help you build an eCommerce brand that will weather the storm of increased competition.

The beauty of this book is it has very clear steps to follow which will define your own brand. Brand is such a hard thing to really understand as it’s a pretty woolly subject, but once you master it you’ll be ahead of 99% of your competition.

Starting an Ecommerce Business Books

12 Months to $1 Million

Author: Ryan Daniel Moran

Ignore the cheesy title, this book is about building great long term eCommerce businesses.

Titles like this usually have me running for the hills. However, I saw Moiz Ali (founder of Native Deodorant) recommend this on Twitter. Took a chance on listening to it and am glad I did.

What you’ll learn

Doing well in eCommerce isn’t about clever marketing or the ultimate Facebook Ad account structure. The common thread in all successful eCommerce businesses is a great product. This book clearly lays out how to identify these products and make the most out of them.

If you’re at the stage of running an eCommerce business and no matter what you do with your advertising you can’t make a profit, it’s time to read this book.

The 4-Hour Work Week

Author: Tim Ferriss

Not what you’re thinking, but a very practical guide to getting stuff done and not just copying everyone else.

What you’ll learn

Even writing this book title still makes me cringe a little. The idea of working very little, becoming rich etc. doesn’t sit well with me. However it was recommended to me by multiple people, and several times by one person I really trust who runs a very successful eCommerce agency. So as with a few books on this list, I’m glad I looked past the title. Personally, I’m not fussed about working less, but the tips on productivity and not just following the crowd have always stuck with me.

It will explain the fundamentals about getting any small business up and running (eCommerce or not), and although it was originally published in 2007, making specific tips like which services to use outdated, the principles remain the same.

  • Select a product that has a high average order value so you can afford to advertise it and still make a profit
  • Make the business setup simple
  • Not everyone is your customer
  • It’s what you do, not how long you do it for (80 hour weeks) that counts

Available EVERYWHERE!

Company Of One

Author: Paul Jarvis

Why being small is the new advantage in business

Unlike All Marketers Are Liars book (included in this list) this book didn’t change the way I saw the world, it did confirm that you don’t have to be a massive organisation to be successful.

What you’ll learn

This isn’t a work on your own book, but questions being big for the sake of being big. It’s now possible to have the mentality of a company of one and be very profitable and not stressed.

One business I consult with decided to keep their eCommerce business a small family run team and have paid off their mortgage. They were thinking of going for massive growth and having big teams. Unless you’ve managed a team of 60+ people (I have and don’t recommend it) it’s hard to convey the challenges and it doesn’t mean a better business.

In Company Of One you’ll learn about lots of small “Company Of One” mindset owners who have done really well leverage modern technology.

A must-read if you think you have to be big to do well in eCommerce.

Company Of One Book

How to get the most out of these eCommerce books

If you’ve got this far into the article you’ve clearly serious about improving your Aussie based eCom businesses. But don’t fall into the trap of thinking if you read every book on a subject you’ve got it made. What counts is what you implement. You’re better to read one and implement 5 changes to what you’re doing than read them all and not change anything.

The little known feature in Google Analytics that can help when eCommerce conversion rates drop

Oh eCommerce conversion rate, you fickle beast. Why have you suddenly dropped?!?!?!?

Identifying why your eCommerce conversion rate has tanked is never easy, and to be frank almost impossible to pick exactly why.

There is one approach that I’ve only ever seen really smart eCommerce stores do, and it can be a life saver. It’s a little known feature in Google Analytics. It’s called “Annotaions”.

Google Analytics annotations allow you to leave a note about a changed made on a specific day in Google Analytics. You can look back and see what went wrong.

For example, if you changed the layout of your site on Tuesday the 18th of October, you can leave a note in GA. Then look at a conversion rate report and match up your annoation to around the date that conversions drop.

In GA go to Acquisition > All Traffic >(Any report, i.e. Source/Medium) Then pick a date range you want to add an annotation to > Then click the tiny little down arrow in the middle of your screen (Told you it was hidden)

It will reveal “+Create new annotation”

Pick the date you made a change and add in a detailed note.

Learn a new discipline

You’re going to have to get in the habit of keeping this updated, everytime you make a change to your eCommerce store. Then you can look back when your conversion rate drops and get better insight into why it may of dropped.

Tomorrow you will thank you.

Warning eCommerce conversion rate issue are very hard to diagnose, for more info on averages and other ways to fix it read this.

Expanding eCommerce product range? Think customers, not products

Don’t make the fatal mistake of focusing on the products you sell instead of who you sell them to.

You’ll end up stuck with a loads of stock you can’t sell instead of cash in the bank.

Devo

Ecommerce is associated with selling products, like Akubra hats. That makes it easy to focus on the product not the customer. Think about Bruce who wants to keep the sun off his head, flies our of his eyes and pull off that classic Aussie look.

Existing customers are easier to sell to (mainly via email marketing, which you’re doing right? course you are, you ain’t a total drongo.)

When expanding your product range, think what the customers you have want, not what is easy to make, buy or import.

For example, if you sell high end dinning room tables, it’s easy to want to expand the range to low end tables because the thinking is…

“We’re known for tables”

Actually…

“You’re known for high end tables”

Your existing customers, who are easier to sell to, expect high end products from you, not a competitor to a $10 Ikea table!

The next obvious product expansion would be high end chairs.

However you expand the product range, your existing customers should think “Oh, that makes sense”, not “What is this all about!”

And for gods sake, don’t try and be everything to everyone.

You’ll end up meaning not a lot to a few people.

How to find your eCommerce competitors’ bestsellers

There is a catch though.

They need to be on Shopify.

Just copy and paste this into your browser…

https://www.competitorswebsite.com.au/collections/all?sort_by=best-selling

And replace “www.competitorswebsite.com.au” with, you guessed it, your competitors domain name (aka home page)

Boom! List of your competitors best sellers.

How do I know if my competitor is using Shopify?

Great question.

Go to a product collection page on their website. A collection page is where a group of products is listed, normally in a grid fashion. For example on a fashion website, the T Shirt page is often a collection page (but not always).

Once on that page, look at the address bar in the browser. In the URL it will have /collections/ (which looks like this)

If you see that, then it’s a Shopify site.

Also most the time they leave “Powered by Shopify” in the footer!

Does this work on every Shopify store?

Unfortunately not. The bigger the store the less likely it is to work. The web developer will have locked down this page. For example, it doesn’t work on Allbirds website, which is a well known Shopify store.

Also if the store is using Shopify for the checkout, but another software like WordPress for the product pages (the geeks call that “headless”), then it won’t work either.

However it does tend to work on lots of smaller stores.

How can I find other eCommerce best sellers?

If the above hack doesn’t work for you, there are other ways to find out what customers in Australia want. I’ve written about how to find the best selling brands and products in Australia.

Is your eCommerce store too reliant on one source of visitors?

Oooooooh that wrappt feeling when you work out how to make sales from one marketing channel, like Insta, Google or Facey Ads.

You’ve found the magic formula and keep cranking it up, and more sales keep coming in.

BUT, what if you weren’t able to use that advertising anymore?

It happens ALL the time and you should be prepared for it.

It’s common for Facebook and Instagram accounts to get disabled by Facebook for literally no reason (Sometimes because the onions are to sexy).

Google regularly updates it’s organic ranking (SEO stuff) algorithm, which can cause big drops in your rankings and subsequent visitors.

Now imagine if your main source of visitors gets cut off suddenly.

Bad times.

Why diversify where your visitors come from?

If the worse does happen, then you need to have a backup, while you fix the issue.

At some point your eCommerce store will experience an issue that will stop some visitors coming to your site.

That means, your sales are very likely to drop off. Therefore you need to make sure you’re getting visitors from multiple marketing channels.

Ideally you want a mix of the following sources of visitors

  • Google Ads
  • Facey/Insta Ads
  • Google Organic (SEO)
  • Email Marketing
  • Industry specific channel (Award sites etc)
  • Affiliates

The percentage is different for each business and there is no magic formula.

However if your traffic is diversified then your eCommerce store will be more resilient to when an issue does arise (because an issue will happen at some point).

I’ve seen to many good eCommerce business go under by relying too heavily on one source of visitors. Don’t be one of those!