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EXECUTION Bought 2 new websites from Shopify Exchange

Ecom man

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I have a relatively successful business that grosses 1-1.5 million a year but I can't seem to grow it past that. The niche is super competitve which I think is part of the reason I can't get it much past that point. I have been trying to decide on what new business to start to run along side this one but hadn't come to a decision... then I read a thread on the inside about how they bought a business! Duh, why haven't I done that before?

So I decided to buy a business! I checked out a few different sites but really liked Shopify exchange since the data they pulled was direct from the shopify back end. I spent a few hours (more than i needed to tbh) and found two great sites. Both of them have been open for 3-4 years and have been doing decent up until recently. Both people had stopped running ads entirely one since June and one since November. Both sites had showed decent revenue before ads being stopped.

Now here is where the "risk" comes into the equation. Both of the people could have a reason they stopped ads. Maybe their suppliers doubled in price so they couldn't run ads profitably. Maybe they actually don't have the time to run the sites (as they say). Maybe I'm getting scammed!!! I decided the risk vs reward is certainly there after talking with both parties.

I wanted to just buy one site... but I ended up buying both!!!

Site #1 cost was $3,400

Site #2 cost was $3,100

So my thought process for buying the sites.
1. How long were the sites open and what did the data look like over that time?
I wanted sites that had a decent track record of sales flucuating monthy and not just one huge spike and then back to nothing.
2. The price had to be a no brainer based off of what past revenue/profit was. Both sites were obviously a deal based on their numbers but even if the numbers are off by 75% both are still a decent buy.
3. The amount of money I'm spending has to be an amount that I am comfortable losing entirely. I don't expect that to happen but being that this is the first time I've bought a site I didn't want to drop 500k on my first one lol.

What am I going to do to start bringing sales back in?
1. Start advertsing both sites again.
2. Completely revamp both sites themes so they convert at a higher rate and are more trustworthy.
3. Set up abandoned cart sequences. Neither store used any sort of software to address abandoned carts and one of them wasn't even using the shopify abandoned cart emails.

What is my goal for both of these sites?
I'm planning on selling one or both of them in the next 1-2 years. Store #2 looks the most promising to be able to increase revenue quickly if the seller isn't straight up lying to me. My plan is to just get that one to what it was doing prior to stopping ads and sell it. Store #1 I would like to make a long term business with as I like the niche and the opportunity it presents.
 

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jpanarra

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What a fantastic post. I've always looked over on Flippa and drooled on the amount of traffic they had while having a medicore website.

This kind of thinking got me focused on web design and building stuff for others because eventually I want to build a product with an successful e-com store. I believe that I've finally got my hands on a product that might do pretty well but its still way too early to tell.

I never knew or realized that shopify had an exchange program similar to flippa. Your post made me sit up in my chair fast. I'm going over there to look around and see what's out there.

Looking forward to this progress as well!
 

yomtov

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Congratulations! The business you own and the 2 you ve just bought are dropshipping ?
 

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Can't you game shopify numbers? I thought you could just import orders into shopify making it look like they got some sales. I've never done this retroactively, but I've input many orders myself into the backend. Maybe check their orders to see what payment was used. If they are all outside shopify or check, then I'd be weary.
 

abogdan88

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How much is the traffic? and how do you calculate the price of a store?
 

InspireHD

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This is interesting. I never heard of Shopify Exchange - although I don't have any experience with Shopify either. Is this actually legitimate? It seems like quite a bit of these stores are dropshipping.
 

Ernman

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Interesting thread - thank you for sharing. Please keep us posted on your progress.
 
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Ecom man

Ecom man

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Can't you game shopify numbers? I thought you could just import orders into shopify making it look like they got some sales. I've never done this retroactively, but I've input many orders myself into the backend. Maybe check their orders to see what payment was used. If they are all outside shopify or check, then I'd be weary.
Yes, the numbers can be gamed on the Shopify backend for sure.

That is the main reason why I wanted stores with a decent history and not one big spike but instead many months of data. It would be much harder to come up with 3-4 years of sales history than to just create a huge spike.

I also have 10 days to inspect the Shopify back end before I actually close on the deal so I’m definitely going to check the orders and make sure they are all CCs etc.
 
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Ecom man

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How much is the traffic? and how do you calculate the price of a store?
Traffic is however much you want to spend. Not sure of exact numbers until I start running traffic to it but I suspect $100-$200 a day per site is a good guess to begin with.

Price of a store I just went off of what they had it priced at and then went from there. The one store I paid their asking price. The other I got them down about 1,000
 

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Ecom man

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This is interesting. I never heard of Shopify Exchange - although I don't have any experience with Shopify either. Is this actually legitimate? It seems like quite a bit of these stores are dropshipping.
They definitely have a bunch of crap on there to sort through and I wouldn’t recommend buying a site that dropships from aliexpress.

Most of those sites are easy to spot because they have one giant spike and then nothing before or after. They found one product that sold, sold as much as possible and then sales died when that product did.

If there are multiple spikes like that and they don’t say where they get items from then simply dropping them a question and asking if they use aliexpress for their dropshipping or is simply enough.
 

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Did you do any due diligence on these?

What did they say about why they stopped the ads?

You get to see their adwords and analytics accounts (login, not screenshots)?

You're probably ok with 3-4 year old sites... but my money is on ad traffic getting too expensive.

"I don't have the time" is usually not the real reason someone is selling. You bought it for $3k. How much time could it possibly take to run. I always run the assumption that there is a secret reason for selling, and it's your job as the buyer to figure that out.

Of course, your risk is low because of the low price point, so let us know how it goes!
 
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Ecom man

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Did you do any due diligence on these?

What did they say about why they stopped the ads?

You get to see their adwords and analytics accounts (login, not screenshots)?

You're probably ok with 3-4 year old sites... but my money is on ad traffic getting too expensive.

"I don't have the time" is usually not the real reason someone is selling. You bought it for $3k. How much time could it possibly take to run. I always run the assumption that there is a secret reason for selling, and it's your job as the buyer to figure that out.

Of course, your risk is low because of the low price point, so let us know how it goes!
Yeah that’s my guess as well. The one site said that it was a change in jobs and didn’t have time for it. It is the lower revenue generator and the one with no abandoned cart stuff set up so I don’t think they exactly know what they are doing lol.

The other one I agree that it isn’t lack of time... but being that the price wasn’t too bad I wanted to give it a whirl. That site was more of a gamble imo as the numbers honestly seemed way too good to only be 3 grand but we will see what happens. My thought process was worst case scenario I’m out 3k for that site. If things work decently I’ll make that 3k back in a couple months. Was kind of a no brainer from a risk/reward perspective.

I’ll get read access to analytics once my payment clears into escrow.
 
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AnAverageJoe

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I was browsing around Shopify Exchange to check it out. I noticed there is a section for just starter sites, which are sites that have less than $100 in revenue but are basically turn key ready to take over.

Most of the sites like this range from a few hundred to up to $1,000.

Would it be a viable business model to come up with a store, brand it, create social pages, put a product or two up, and then flip it for a few hundred bucks?

I'd imagine someone could pump a few of these out a week because all you're doing is coming up with an idea and laying the groundwork. Then you sell the idea to someone else for them to execute. If there's one thing I've noticed, it's that people LOVE ideas...
 

B_Mac

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I was browsing around Shopify Exchange to check it out. I noticed there is a section for just starter sites, which are sites that have less than $100 in revenue but are basically turn key ready to take over.

Most of the sites like this range from a few hundred to up to $1,000.

Would it be a viable business model to come up with a store, brand it, create social pages, put a product or two up, and then flip it for a few hundred bucks?

I'd imagine someone could pump a few of these out a week because all you're doing is coming up with an idea and laying the groundwork. Then you sell the idea to someone else for them to execute. If there's one thing I've noticed, it's that people LOVE ideas...
I don't think it would be a viable business model. I don't see it being scalable. And making one and selling one are two different things. Even if you made two a week, with a 100% sale rate, at an average of $500 (generous in my opinion), you're talking $50k / yr. That's before expenses that you will get waiting for the store to sale, things like the Shopify plan and the add-ons.

The better strategy is what @Ecom man is doing. Identifying sites with potential that the owners don't know how to extract, then applying his knowledge to increase revenue and selling 1-2 years later.
 
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Ecom man

Ecom man

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I was browsing around Shopify Exchange to check it out. I noticed there is a section for just starter sites, which are sites that have less than $100 in revenue but are basically turn key ready to take over.

Most of the sites like this range from a few hundred to up to $1,000.

Would it be a viable business model to come up with a store, brand it, create social pages, put a product or two up, and then flip it for a few hundred bucks?

I'd imagine someone could pump a few of these out a week because all you're doing is coming up with an idea and laying the groundwork. Then you sell the idea to someone else for them to execute. If there's one thing I've noticed, it's that people LOVE ideas...
Wonder if it works? Try it! What’s the worse case scenario? You are out $29 and some time? Build one, throw it up and see if it sells. If it does then great. You can decide if the time invested is worth the money or not. If it doesn’t sell then close the store and you are only out $30-100 (depending on how long you wait trying to sell).

IMO there isn’t enough money in building and selling for a couple hundred dollars. I would rather spend a couple years building and sell for a couple hundred grand.
 

BookwormMitch

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Wonder if it works? Try it! What’s the worse case scenario? You are out $29 and some time? Build one, throw it up and see if it sells. If it does then great. You can decide if the time invested is worth the money or not. If it doesn’t sell then close the store and you are only out $30-100 (depending on how long you wait trying to sell).

IMO there isn’t enough money in building and selling for a couple hundred dollars. I would rather spend a couple years building and sell for a couple hundred grand.
You may as well just freelance if you are going to do this, people would be charging more than this to build a store for someone and you have a sale before you’ve even done any work.

Shopify has its own freelancers marketplace too called Shopify experts
 

ZeroTo100

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I would have loved to help you with the due diligence process.

Going back, do you think you would hire someone to help you out with the purchase?

Just stretching my curiously, even though I would have just done it for nothing.
 
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Ecom man

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I would have loved to help you with the due diligence process.

Going back, do you think you would hire someone to help you out with the purchase?

Just stretching my curiously, even though I would have just done it for nothing.
Honestly... no I wouldn’t. I’ve got a decent amount of Shopify experience under my belt and looking at the sites I know I can improve them massively. If it was my first site I had ever run then I’m sure hand holding would be helpful but I’ve set up 5 Shopify sites before these 2 so I know what needs done to get them going.
 
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Ecom man

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Ok so quick update. Escrow.com takes a while to clear the payments the first time you use them so I’ve been mainly waiting on that.

Site number 2 I have almost everything transferred and get the Shopify staff account yesterday so I got to see “under the hood”.

Based on his site layout and total traffic to sales numbers I knew his conversion rate had to be dismal... I was right. He was converting at .3-.4%. My sites normally convert at 2-3% year round at minimum so even if I just get the conversion rate up to 1% I will be tripling sales immediately after revamping the site. This is just hypothetically of course but it is nice to know I was right in that regards.

All orders look legit with them being via Stripe or Amazon so not fake numbers as I was guessing based on the longevity of the site. Just have a couple things left to get transferred to me (mainly the supplier account/info) and then site number 2 will be officially mine. I’m hoping that will get finished by middle of next week but it depends on how quickly the supplier gets the account transfer done.

Site number 1 just cleared into Escrow tonight so depending on how much of a hurry the seller is in I should start getting things transferred this weekend or on Monday.

Will keep everyone updated as things go along.
 

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ZeroTo100

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Honestly... no I wouldn’t. I’ve got a decent amount of Shopify experience under my belt and looking at the sites I know I can improve them massively. If it was my first site I had ever run then I’m sure hand holding would be helpful but I’ve set up 5 Shopify sites before these 2 so I know what needs done to get them going.
Got it.

Have you looked into traffic, backlink history, etc? Are they running paid Ads or relying on organic search?

Purchase price seems very cheap. Check the value of their domain too, maybe you scored on that.

Don’t forget to look at their social media pages and the profiles following those pages.

Yep, think some people that weren’t as savvy as yourself and purchased sites with crap probably would spend a couple hundred to be helped (not hand held) to save a few thousand. Even with what I know now, I think I’d pay for the second set of eyes.

If you don’t mind me asking...in running those sites, what do you think the biggest struggle has been for yourself.
 

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Did you check to see what price you could source the products for elsewhere? That way you could work out a worst case scenario for your profit margins.
 
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Ecom man

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What are your concerns with the drop shipper not having inventory in stock once you start driving traffic?

I would think about having a second source of the same products as a backup plan.
That’s always a concern but the second site comes with three supplier selling similar items so should happen often. First site only has one supplier but I’ve already secured two more in the same niche. If one item is out of stock I will email the customer explain the issue and ask if they would like to change to a similar but higher priced item.
 
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Ecom man

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Did you check to see what price you could source the products for elsewhere? That way you could work out a worst case scenario for your profit margins.
Both of the sites have products that have MAP so that helps to protect the margins to some extent. They are also unique type products so I don’t think there is as much shopppng around as it’s harder to compare since the products I’m selling are unique.
 
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Ecom man

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Ok so quick update. Site number 1 is now mine. I’m going to try and be halfway detailed on what I’m doing to fix it/change it to try and increase sales/conversions. Starting conversion rate is .3%. My goal is to be converting at 1-2% within 90 days.

What have I done so far?
1. Added PayPal as a payment method
2. Added an 800 number and email address from the domain (no gmail crap here)
3. Installed a new theme. I use a free one from Shopify on my other store and it converts decently so I will be using that one on this site.
4. Installed abandoned cart emails and flows to help catch those people that drop off.
5. Changed the site to entirely free USA shipping.
Things I still have to do.
1. Finish tweaking the theme.
2. Rewrite product titles and descriptions (will take a while or hire someone haven’t decided which yet).
3. Set up new ads with remarketing on google/Facebook
4. Redesign the site navigation as it’s currently pretty convoluted.
5. Add new products from the new supplier I got for the site as well as make sure all current products are still in stock/ available from current supplier.
6. Profit!!! Lol
 
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Ecom man

Ecom man

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One that I would be interested in that is currently listed is

Private listing #43914 For Sale | Buy an Online Business

Obviously it would require some investigation etc but it has a record over a number of years so not likely faked. Of course if they are just dropshipping from aliexpress I personally wouldn’t bother as tons of people have started dropshipping and aliexpress is the go to place.

I would avoid stores like this that have a huge spike and then nothing...
The Firefighter Shop For Sale | Buy an Online Business
 

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