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Need Advice: buying E-Commerce during finance crisis

andreysfastlane

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Hello everyone,

at first thanks to all for the life changing tips here on forum.

I have a chance to buy an E-Commerce Shop. Its a personalized POD Shop.
It had 15k revenue in 2 months. 30% margin.
He sell it for 12k~ (Seller has no time to run it, because of time, he is student)
FB Ads Roas 3-8
I can optimize many things to improve Customer Lifetime Value. Upsells, Cart abadonment and Marketing strategy.

I did not want to put all balls in one basket. And in this time (covid, potential financial crisis) it not so easy to make a decision.

I gave him an offer to owner finance it. He has accepted it. So i can be sure he is not a scammer. A seller get his money if i make money with his project.

I know it not so easy to give an advice, because nobody knows me here. I would introduce me later.

I know, my english is not the best but im learning fast! Thank you.

with best regards
Andrey
 
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juresesko

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If I were in this students shoes I would stop going to school and focus on whats actually making money for me. Because of that this sounds fishy.

How much did he spend on ads in that 2 months?
Can you add value to the product you will be selling or just to the site?
Was his site in the past year growing or falling?
How did his site do at the corona times?
 

Simon Angel

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My presumption, since this is a POD store, is that he landed on a winning design which sold well for a month or so but is now on a downward trend and he's trying to get rid of it to an unassuming buyer. If he's netted near 5K in these two months, and if we just assume that the products will continue selling at the same rate (they never do), he only needs 2 and a half months to net what he's valuing it at.

He's likely more aware than you are that the sales will go down soon, if they haven't started to already.

Is the store running on Shopify? Ask him to screencap his sales graph for July.
 
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biophase

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Hello everyone,

at first thanks to all for the life changing tips here on forum.

I have a chance to buy an E-Commerce Shop. Its a personalized POD Shop.
It had 15k revenue in 2 months. 30% margin.
He sell it for 12k~ (Seller has no time to run it, because of time, he is student)
FB Ads Roas 3-8
I can optimize many things to improve Customer Lifetime Value. Upsells, Cart abadonment and Marketing strategy.

I did not want to put all balls in one basket. And in this time (covid, potential financial crisis) it not so easy to make a decision.

I gave him an offer to owner finance it. He has accepted it. So i can be sure he is not a scammer. A seller get his money if i make money with his project.

I know it not so easy to give an advice, because nobody knows me here. I would introduce me later.

I know, my english is not the best but im learning fast! Thank you.

with best regards
Andrey

2 months is lot alot of time to establish if the business will be successful long term. However, that is reflected in the low asking price.

I would be worried that the business spiked and is now on a downtrend and that the FB ads from 2 months ago are not converting as much anymore.
 

andreysfastlane

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Jul 27, 2020
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If I were in this students shoes I would stop going to school and focus on whats actually making money for me. Because of that this sounds fishy.

How much did he spend on ads in that 2 months?
Can you add value to the product you will be selling or just to the site?
Was his site in the past year growing or falling?
How did his site do at the corona times?

Maybe he doesnt know about fastlane?
Or he knows more than he speak about.

He spent 60€ a day
Average daily conversions 4
Basis price 49€
Margin 30%

Revenue:
April 4k€
May 8.8k€
In May He stopped to advertise
June 1k€

I can optimize many things to increase average cart


My presumption, since this is a POD store, is that he landed on a winning design which sold well for a month or so but is now on a downward trend and he's trying to get rid of it to an unassuming buyer. If he's netted near 5K in these two months, and if we just assume that the products will continue selling at the same rate (they never do), he only needs 2 and a half months to net what he's valuing it at.

He's likely more aware than you are that the sales will go down soon, if they haven't started to already.

Is the store running on Shopify? Ask him to screencap his sales graph for July.

Its Not about one Design, its personalized designs for customers. In his best month he stopped to advertise....He begins with his Masters degree, i have googled and found him. Its true.

2 months is lot alot of time to establish if the business will be successful long term. However, that is reflected in the low asking price.

I would be worried that the business spiked and is now on a downtrend and that the FB ads from 2 months ago are not converting as much anymore.

Maybe you can look at it If i send you the Link.
 

Simon Angel

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A classic case of "It's on the internet, so it must be true".

He stopped advertising in his highest revenue month for.. no reason at all? Yep, seems legit alright.

You know, I think you probably should actually buy the store. I mean it's an obvious scam, but you seem so oblivious you might as well learn quite a few lessons by getting scammed.
 
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ZCP

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Get Rich Quick often leads to Learn Things Expensive.

good lessons.

what would be the plan for 24 month success with this business?
what would be your exit strategy?
 

andreysfastlane

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Jul 27, 2020
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A classic case of "It's on the internet, so it must be true".

He stopped advertising in his highest revenue month for.. no reason at all? Yep, seems legit alright.

You know, I think you probably should actually buy the store. I mean it's an obvious scam, but you seem so oblivious you might as well learn quite a few lessons by getting scammed.

Thats the question, why he stopped to advertise.

Like im already said, seller has accepted my offer to owner finance it. I get it for 0$.
If this shop get revenue, He get his money back, on monthly basis. If not, he get his shop back.

Get Rich Quick often leads to Learn Things Expensive.

good lessons.

what would be the plan for 24 month success with this business?
what would be your exit strategy?

My plan is to improve it and scale it. Spring into fastlane.
Exit strategy, like i said below i offered seller owner financing. Seller get his money from Revenue. If not, he get his shop back.
 

biophase

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ZCP

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@andreysfastlane ..... what is YOUR exit strategy?
you do not have a business if you do not have an exit strategy.

for your plan:
what are the first three SPECIFIC things that you will do to accomplish the improve / scale it task?
 

andreysfastlane

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That’s not vague at all. Sounds like a great plan.

Thank you.
Worst case what can be happen, i will lose a little bit money for advertising and time.
Best case i will spring on the fastlane and sell bussines for a life changing sum.

@andreysfastlane ..... what is YOUR exit strategy?
you do not have a business if you do not have an exit strategy.

for your plan:
what are the first three SPECIFIC things that you will do to accomplish the improve / scale it task?

Exit strategy to sell business for a life changing sum.

1. Increase margin and average value order
- I already found less priced supplier. I have only to check quality.
- To increase average value order i will add possibility for upsells. There are more products customers can add to cart with main product.
- Add premium product/variant for better paying customers.
2. Increase conversion
- Add more social Proof like Notifications
- Timer on Website
- Cart abadonment plugin! People often need more time for choosing photo...if they Order later, automatic Notification will sent out with time limited free delivery. "Order today with free Delivery"
3. Happy customers / Activate Mouth to Mouth Marketing
- Edit communication with customers. I read it in one Copywriting book.
One Shop increased their orders only by edit communication with their customers. All the communication was in teatralic style. I think it fits perfectly for this shop too.
- 2 days after they get their order, automatic mail asking for review and give coupon to share with their friends or asking them to tell about it, with social Sharing buttons.

These are first steps i will integrate before start marketing.

4. After all works fine - Automate process. It should works without my activity because im on slowlane bussines so i have not much time. Maybe this changes soon.

Thank you all for help and advices. Im always open for critic and always ready to learn new skills.
Im not euphoric, i only need other view perspectives from fastlaners.
 
Last edited:

juresesko

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Apr 10, 2020
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So where are you now?
How close are you to buying it?
Can you already feel the tension of the spring that will spring you in the fastlane?
 
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