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What do you think about buying an 'established' dropshipping store? Scam?

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fastlanedoll

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Here are some examples:


It just all sounds too good to be true.

Thoughts?

How would you personally go about buying an established business?
 

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MarkT525

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Here are some examples:


It just all sounds too good to be true.

Thoughts?

How would you personally go about buying an established business?
Do your due diligence. It's an investment in money AND time.
Make sure you don't overpay for what the business is doing

I haven't been looking in the market for buying existing dropshipping businesses and I only know of flippa.com - That being said, dropshipping is definitely not a set and forget type of business. There are several things to consider.

Suppliers:
What country are the suppliers in. If non-US suppliers, can the products be bought in bulk and fulfilled from a US warehouse?
This greatly influences the delivery speed and your customers need to understand that.

Fulfillment:
Does the store you're interested in have software that does auto fulfillment (place orders with suppliers and autopay) or does it require some action by you (downloading orders in a CSV file and emailing to the supplier with pay for example)

Product Selection:
What niche is the store? Is it something you have a passion for? is it an evergreen market?
Will you be selling similar items that you may find the majority of everyone else is? Look around and see who else is selling the same or similar items. (competition, price points, offers/bundles)

Process and implementation:
Some dropshippers constantly search for the latest shiny objects and test over and over to see what connects. This testing can take time depending on how and where is being tested. Once a product gets sales, advertising is scaled up throughout the demand - then it's on to the next shiny object. If you will have print on demand products, you may need to outsource designs unless you can do it yourself.

Visitors:
What kind of traffic is the store getting? Is that paid traffic or organic? If organic, is that from social media or a blog?
If paid, what's the current budget look like? Where is it being advertised? (Youtube, Google, Facebook, Solo ads, etc.)

Sales:
Are there upsell opportunities and if so, what kind of upsell offers are being made?
Are visitors one time customers and never come back or are they put in a mailing list and remarketed to? If so, how many are repeat customers?
What's the ratio for sales to returns? Look for feedback/social proof in comments on the stores site, Facebook and elsewhere.

I know this seems like a lot but in reality, this is just scratching the surface of some of the things you need to think about with dropshipping.

Dropshipping works for sure. There are a lot of people doing it successfully.
It's all in your expectations and what you want to put into it.

Mark
 

sparechange

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Why not just create your own? Creating a drop shipping store which is a questionable business in itself isn't so complicated.

$40 shopify store

$few hundred buckaroos in fb/yt/ig ads

$few hundred buckaroos in getting products

boom ya got a store

(yes totally over simplified) but then YOU can SELL it to someone else!

Then pick what color Ferrari you want, hehehe

Buying an established *REAL* business is a whole nother game I haven't a clue in. Which I'm sure can have lots of value.
 

Tourmaline

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I would only consider buying a dropshipping store that came with people that research and select new products, create content to advertise new products.
 

BizyDad

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You answered it your self. If it sounds too good to be true, it probably is.
That's a platitude. Besides "probably" isn't the same thing as "always". The only way to "know" is to do your research.

You certainly could find a business worth buying. It is difficult however.

I think @MarkT525 gave some solid advice. The only thing I would add is can you identify areas where you can improve the business, so as to appreciate it's value/revenue?

A similar but more broad discussion with good advice recently took place here.

 

Champion

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If you have no clue about how to do dropshipping, I wouldnt advise you to buy a dropshipping store...

Dropshipping tends to be a lot of work, since the products are being "pushed" by everyone, so its just a matter of a few months max until the market is saturated.

What happens once the products that your shop is currently selling get saturated or go out of fashion?

Do you know how to find new products?

Do you know how to run ads and sell them?

Do you know how to Fulfill them properly and provide customer support?

If the answer to those questions is yes, then you might be able to pull it off. However, if you dont know how to do those things, its probably easier for you to build your own store from the ground up and learn every part of the process along the way.
 

James Klymus

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That's a platitude. Besides "probably" isn't the same thing as "always". The only way to "know" is to do your research
No, it isn’t. It’s a great test to decipher bs from reality. If you’re thinking it’s too good to be true, you should be cautious.

Everything warrants further investigation and that goes without saying.

As far as buying a drop shipping business, I’m sure there are people who buy successful stores, but I’m also positive there are many more people who prey on our desire to “get rich quick” and will sell you some crappy store with products off of alibaba
 

BizyDad

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No, it isn’t. It’s a great test to decipher bs from reality. If you’re thinking it’s too good to be true, you should be cautious.
Totally agree with this.

I made my point because most people I know interpret the phrase as "don't bother" instead of "proceed with caution". I obviously misunderstood your point.
 

Walter Hay

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As far as buying a drop shipping business, I’m sure there are people who buy successful stores, but I’m also positive there are many more people who prey on our desire to “get rich quick” and will sell you some crappy store with products off of alibaba
To clarify a major issue regarding dropshipping: The great majority of those "crappy stores" buy from Aliexpress vendors. It is near impossible to get a supplier on Alibaba to dropship.

With systems such as Oberlo making it too easy to set up a dropshipping store sourcing from Aliexpress the market is flooded with "me too" products being sold by "me too vendors" all in a race to the bottom.

Walter
 

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James Klymus

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To clarify a major issue regarding dropshipping: The great majority of those "crappy stores" buy from Aliexpress vendors. It is near impossible to get a supplier on Alibaba to dropship.

With systems such as Oberlo making it too easy to set up a dropshipping store sourcing from Aliexpress the market is flooded with "me too" products being sold by "me too vendors" all in a race to the bottom.

Walter
I meant AliExpress, sorry for that.
 

Walter Hay

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elusive97

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I sold a dropshipping store but most of the value came as I sold along with the social media page that was organically driving traffic to the store.

You could look for something like that, that way figuring out FB ads or AdWords or whatever is less of a priority. It can be easier to figure out how authentic a social media presence is too!
 

biophase

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Here are some examples:


It just all sounds too good to be true.

Thoughts?

How would you personally go about buying an established business?
The exchange marketplace pulls all its data from Shopify. The interesting thing about that site is that if you go to cancel your shopify store, they will ask you if you want to instead list it on that website. That is why that website has alot of dead sites.

When you look at the income graphs on many store on that site, you will see Income spikes and then gradual declines. Check out most of the listings, not many have gradual sales. It's all up and down. These are mostly stores that used FB ads to get sales and then the ads stopped working.

@fastlanedoll - Please put a link of a specific business that you think is too good to be true.
 
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ho4848

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To clarify a major issue regarding dropshipping: The great majority of those "crappy stores" buy from Aliexpress vendors. It is near impossible to get a supplier on Alibaba to dropship.

With systems such as Oberlo making it too easy to set up a dropshipping store sourcing from Aliexpress the market is flooded with "me too" products being sold by "me too vendors" all in a race to the bottom.

Walter
I agree Aliexpress is crowded and the entry barrier is too low. My question is what other platforms can we use to find rare products and reliable suppliers?

Brian
 

Walter Hay

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I agree Aliexpress is crowded and the entry barrier is too low. My question is what other platforms can we use to find rare products and reliable suppliers?

Brian
That is not a huge problem if you are able and willing to at least carry a small inventory, and you avoid buying from China.

Sourcing in countries other than China is a good way to find products that have not previously been sold in the country where you want to sell. Product acquisition is the first step in marketing, and you need to acquire quality and if possible unique products at the best price.

Members who report having bought from countries other than China have found better quality and better prices, but it takes more effort than just looking up Alibaba.

There are many countries where keen exporters will welcome your business.

Regards,
Walter
 
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fastlanedoll

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I've only tried my hand at dropshipping once- and it was actually profitable (though mildly).
It was a seasonal product, and I've since closed my store down.
I actually did source on Aliexpress.

Any non-China suppliers you guys would recommend?
 

Roli

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Here are some examples:


It just all sounds too good to be true.

Thoughts?

How would you personally go about buying an established business?
Search through the forum threads, I remember reading about a guy who had bought two stores and did really well out of them. I'm sure he outlined exactly the criteria he used to buy the sites.

I'm sure it can be profitable, but as @biophase opined, there will be a lot of dirt to dig through before finding the gold.
 

Vadim26

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Search through the forum threads, I remember reading about a guy who had bought two stores and did really well out of them. I'm sure he outlined exactly the criteria he used to buy the sites.
@fastlanedoll

think it was @Ecom man

edit: found the link for anyone interested

 

Vadim26

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@fastlanedoll can you link a specific store from Shopify exchange that you think is "to good to be true" like bio pointed out?

It will be easier for everyone to evaluate.
 

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Pritesh

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Okay, this thread felt like it's literally talking to me. So, I had to throw my experience in.

I just sold an ecom store for $1xx,xxx on another site a few days ago.
You only sell a store when you've milked the audience completely dry, you can see if from fb ads frequency, LLAs not performing and also Google ads not delivering results. Google ads not delivering sales after it gets going is a rarity and a surefire way to know that the audience is dying.

A successful dropship e-com store's life cycle is around 3-4 months MAX (I'm talking about 50k+ revenue stores, rather than slow scaling stores). If you scale slow, FB will F you sooner or later with their customer feedback surveys. I've consumed so much content on dropshipping before I hit my big store, that I can say that without a shred of doubt. You can watch any influencer's videos or blog posts, 4 months is the ceiling. My store lasted for 6 months P/L cycle because it was a totally unsaturated niche + product + it wasn't a dropship model (I just used shopify)
I've networked with a lot of shopify dropship store owners and I've even attended Shopify Unite in Toronto. You will only sell a site when you know it's about to die. Do not buy into that.

With the amount of investment you're putting in to buy one, you can easily test a bunch of products at breakeven and easily find a winner. It only took me $2k adspend to find a winner product, but I did have extensive knowledge about running facebook and Google ads (I have over half million ad spend in 3 years). But, honestly a beginner will have zero problem finding a winner in under 5-10k.

Also, it matters a lot where you are located, if you're in U.S, sell in the U.S and know what you're doing you cannot fail at Shopify. No VAT or GST, no absurd currency conversion fees, lowest stripe fees, it all adds up to lower your COGS and you can run with a lower KPIs than the rest of the world. Also a massive tip, invest time in looking for good fullfillment agents from China, I can give you an example of my winning product, it's cost was $8.99 on Aliexpress, using an agent it cost me 60 cents, yes that's $0.60.
 
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BizyDad

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Okay, this thread felt like it's literally talking to me. So, I had to throw my experience in.

I just sold an ecom store for $1xx,xxx on another site a few days ago.
You only sell a store when you've milked the audience completely dry, you can see if from fb ads frequency, LLAs not performing and also Google ads not delivering results. Google ads not delivering sales after it gets going is a rarity and a surefire way to know that the audience is dying.

A successful dropship e-com store's life cycle is around 3-4 months MAX (I'm talking about 50k+ revenue stores, rather than slow scaling stores). I've consumed so much content on dropshipping before I hit my big store, that I can say that without a shred of doubt. You can watch any influencer's videos or blog posts, 4 months is the ceiling. My store lasted for 6 months P/L cycle because it was a totally unsaturated niche + product + it wasn't a dropship model (I just used shopify)
I've networked with a lot of shopify dropship store owners and I've even attended Shopify Unite in Toronto. You will only sell a site when you know it's about to die. Do not buy into that.

With the amount of investment you're putting in to buy one, you can easily test a bunch of products at breakeven and easily find a winner. It only took me $2k adspend to find a winner product, but I did have extensive knowledge about running facebook and Google ads (I have over half million ad spend in 3 years). But, honestly a beginner will have zero problem finding a winner in under 5-10k.

Also, it matters a lot where you are located, if you're in U.S, sell in the U.S and know what you're doing you cannot fail at Shopify. No VAT or GST, no absurd currency conversion fees, lowest stripe fees, it all adds up to lower your COGS and you can run with a bigger KPIs than the rest of the world. Also a massive tip, invest time in looking for good fullfillment agents from China, I can give you an example of my winning product, it's cost was $8.99 on Aliexpress, using an agent it cost me 60 cents, yes that's $0.60.
... aaaaand welcome to the forum @Pritesh !

Woo. That's quite a second comment you got there...
 
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fastlanedoll

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... aaaaand welcome to the forum @Pritesh !

Woo. That's quite a second comment you got there...
Thanks a lot.

Yeah, selling a profitable store that only demands a few hours of attention doesn't make sense. Guess it's too good to be true afterall.
 

Walter Hay

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I agree Aliexpress is crowded and the entry barrier is too low. My question is what other platforms can we use to find rare products and reliable suppliers?

Brian
I've only tried my hand at dropshipping once- and it was actually profitable (though mildly).
It was a seasonal product, and I've since closed my store down.
I actually did source on Aliexpress.

Any non-China suppliers you guys would recommend?
Getting dropship suppliers in the country where you live/sell is relatively simple, but to get them in other countries pretty well limits you to Aliexpress.

Exporters in most countries will only be interested in shipping direct to you, their customer.

If on the other hand you want to carry inventory of a rare or unique product, or one that has never before been sold in the country where you are selling, I can help.

In my safe sourcing and importing book I have listed genuine B2B sites in 41 countries including China. I refer to them as genuine, because there are vast numbers of sites claiming to be country-specific and I have sorted the sheep from the goats.

Most sites claiming to be country-specific are not. Most are buy/sell offer platforms where opportunists and con-men lurk.

The sites I have listed are not suitable for sourcing dropship supplies.

Walter
Walter
 

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