Acquiring Minds Top 3 Pitfalls When Buying an Online Business
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Aug 30, 2021 Ahmed Raza, a due diligence pro, shares the 3 things to evaluate when buying e-commerce, SaaS, or content businesses. Topics include product defendability, competition from Amazon, financial aspects, operational side of online businesses, importance of staging environment for SaaS, SEO importance and defendability of content, vulnerabilities of affiliate-based businesses with reliance on Amazon and Google.
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Check Product Defendability
- Assess product defendability versus Amazon and other competitors before buying any e-commerce business.
- Verify whether products are private label, retail, or dropship and if they will survive Amazon competition.
Validate Traffic And Margins
- Confirm traffic sources are diversified and sustainable before buying an e-commerce site.
- Test if paid acquisition costs fit margins and if SEO niches are realistically defendable.
Confirm Supplier Capacity
- Speak directly with suppliers to confirm capacity and geographic constraints before acquisition.
- Ensure suppliers can scale to support your growth plan or the business cannot fulfill orders.