Im an Ecom Site Broker: Is Investing in Ecom Stores Best Right now?

[GeorgeMoulos]

Hey guys Im a long time fastlane reader but never thought to hop on the forum until now (5 years after reading fastlane).

I run an online business brokerage (ecommerce-brokers.com) and wanted to get your thoughts on buying and selling ecommerce businesses over more mainstream investments like real estate and the stock market as I've seen a huge surge in buyers interested with corona virus recently which makes me think this is just accelerating the move to investing in ecommerce businesses that was already happening.

What are your thoughts on investing in an already successful ecommerce business over other investments?

 

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[Bobby_italy]

welcome!

Your website looks good but the link to the skincare section is broken.

Tell us more about how you operate/what sets you apart from other brokers or plain dedicated websites.

 

[GeorgeMoulos]

welcome!

Your website looks good but the link to the skincare section is broken.

Tell us more about how you operate/what sets you apart from other brokers or plain dedicated websites.

Hey mate,
For sure man. I sold my first business 7 years ago and did it through a broker. I sold multiple other businesses of my own and helped my friends sell theirs as well and the service I received with so many different brokers was nothing short of disgusting. Ever broker was charging between 15-20% commissions, set terrible terms in the exclusivity agreement (12 months locked in) and wouldn't contact me for months at a time and assigning me to an account manager that had no ecommerce experience whatsoever. At every turn they were looking to make a buck and in the event they did find a buyer they would make sure they got paid first. And if something happened where the buyer pulled out, they would make sure they'd take the deposit. All round terrible experience.

This is precisely why i got into the broker game. I charge extremely reasonable commissions (10% for under 1M businesses and am reasonable and negotiable for over 1M), max do 6 month exclusivity periods and am the 1 source of contact for my clients (no VA account managers). I essentially built a seller focused brokerage.

 

[Envision]

If you understand how to add value to the existing business and operate it, its a no brainer. But most people lack the understanding and their risk increases astronomically.

I bought a company from website closers ~6 months ago and its been doing great and we're finalizing the launch of our newest product line right now. But without the knowledge of ecommerce that I have it would have been a nightmare for anyone else.

I think in terms of returns ecommerce is the highest but so is the risk.
Real estate is a fail safe - if the numbers work and you're not an idiot its relatively fool proof (not saying black swan type events cant happen).
Gold is gold, I dont get it, I dont have any, but I am sure at some point Id buy some as a hedge.

 

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[GeorgeMoulos]

If you understand how to add value to the existing business and operate it, its a no brainer. But most people lack the understanding and their risk increases astronomically.

I bought a company from website closers ~6 months ago and its been doing great and we're finalizing the launch of our newest product line right now. But without the knowledge of ecommerce that I have it would have been a nightmare for anyone else.

I think in terms of returns ecommerce is the highest but so is the risk.
Real estate is a fail safe - if the numbers work and you're not an idiot its relatively fool proof (not saying black swan type events cant happen).
Gold is gold, I dont get it, I dont have any, but I am sure at some point Id buy some as a hedge.

I agree. Ecom know-how is pretty essential if the owner needs to take part in the business for it to operate. However there are some businesses that run on their own and offer passive income. In my experience its these ones that the non-ecom people buy, which makes sense.

But yeah, to really grow an online business for the massive returns you can get, ecom-know how or ecom learning is needed.

 

[Envision]

I agree. Ecom know-how is pretty essential if the owner needs to take part in the business for it to operate. However there are some businesses that run on their own and offer passive income. In my experience its these ones that the non-ecom people buy, which makes sense.

But yeah, to really grow an online business for the massive returns you can get, ecom-know how or ecom learning is needed.

I get that mentality, but I think if you are "passive" you eventually wont be in business.

There are people that would compete with me in the past and were content with their passive income from their FBA or affiliate business. They dont exist anymore.

You Must Grow or Die.

 

[Phikey]

I run an e-commerce marketing agency and we're now using our team to buy small stores, scale them up, and then sell them for much more in 6-12 months. Having an agency is great but it gets tiring managing people and relationships. When you get over a team of 10-15 it gets complicated. I'm happy with staying under $100k MRR but then using my teams knowledge, experience and all the great stuff we're learning by being in the backend of dozens of high-performing stores to build our own stores. I have access to a world-class e-commerce marketing team at cost price. We're going to use these e-commerce store projects as case studies as well as massive capital growth for the business. It's one way to go about it and keeps me very excited about all the stuff we're doing.

What Envision said is right. Having Ecommerce knowledge is a must if you're buying. You need to know how to vet all the data and what to look for. For us, we saw a massive opportunity in their google ads campaigns. It was a mismanaged account that had insane potential with a few easy tweaks.

 

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