How To Buy A Shopify Store: A Detailed Guide

Some folks like to start their own businesses from scratch, but others prefer to buy an existing one. If you're in the latter camp and have some money to invest, buying an existing online business can be a safer bet.

However, buying a Shopify store can be a bit tricky. But don't worry! With a bit of planning and careful research, you can successfully buy a Shopify store. 

Let me walk you through the details!  

Why Should You Consider Buying A Shopify Store?

Buying a Shopify store offers several advantages, such as:

• You Save Time: Building a store from the ground up takes time—setting up products, designing, and building an audience. When you buy a Shopify store, much of this work is already done.
• You Get an Established Customer Base: A good store comes with existing customers and traffic. That means you can start generating revenue right away instead of waiting months to grow your audience.
• It’s Easier to Scale: If the store is already profitable, you can focus on scaling it further rather than figuring out how to make your first sale.
• You Skip the Trial-and-Error Phase: Starting a new Shopify store often means experimenting with products, design, and marketing strategies. With a well-running store, these elements are already optimized.
• Less steep learning curve: You can learn from the previous owner's experience and knowledge. Think of it as having a mentor guide you through the business, showing you what works, what doesn't, and where you can grow.

Okay, let's dive into the process of buying a Shopify store and help you navigate the twists and turns of the online marketplace with ease.

6 Steps To Buy A Shopify Store

Step 1: Preparation Before Buying A Shopify Store

Preparation is key. So, take the time to assess your financial limits and personal interests. Your investment should align with your goals.

Your Budget

You should ask yourself: How much am I willing to invest upfront? And how much do I have for ongoing costs like inventory and marketing?

Your budget isn't just about dollars. It's also about the time you're willing to invest. When I started, I underestimated the time needed to run a hands-on store, and it became overwhelming. Learn from my mistake-don't stretch yourself too thin! 

Your Niche

The store should match your interests and expertise. Knowing what excites you will make running your store more enjoyable and keep you motivated when challenges arise. If you care about ethical business, look for stores that align with those principles. 

Besides, try to balance demand and competition. Some trendy niches on Shopify are custom products, eco-friendly items, tech gadgets, beauty, and skincare. These niches often have strong customer interest, but they can also be competitive. 

Step 2: Browse Businesses For Sale

Once you've set your budget and decided on your niche, it's time to explore what's available on the market.

Find selling platforms 

There are several reputable platforms where you can find Shopify stores for sale. Here are some of the platforms to consider:

• Flippa: This platform offers a wide variety of businesses, ranging from small stores to larger ones. You can filter by niche, price, and performance metrics to find a store that fits your needs. Flippa also provides buyer protection services and a bidding system for competitive purchases. 
• Empire Flippers: If you are looking for a vetted, profitable Shopify store, consider Empire Flippers. Right here, you can get detailed due diligence reports to access the business before making an offer. 
• BuySellEmpire: With a focus on high growth, BuySellEmpire comes with detailed revenue reports, growth analysis, and customer data. The platform also offers a range of pricing options. Thus, you can choose from a budget-friendly choice or a high-end purchase. 
• FE International: Known for its high-quality listings, FE International provides a curated selection of Shopify stores. Plus, you can access a full-service acquisition experience, including due diligence support and post-sale assistance. 
• BizBroker24: BizBroker24 is another trusted option for buying ecommerce stores. They list a mix of small, medium, and large Shopify businesses, with comprehensive information on each one. There are also many tools here to help you evaluate stores. 
• Acquire.com: If you focus on high-value transactions and want to reach sellers of well-established online businesses, do not miss Acquire.com. The platform is popular for transparency, with detailed metrics and performance reports. 

Browse Shopify stores for sale on the platform

Once you've identified a platform, start browsing the listings for Shopify stores that fit your budget and niche. The browsing process differs from platform to platform. For example, if you browse Shopify stores for sale on Flippa, follow these steps:

• Visit Flippa's website. 
• Use the search bar to filter listings, especially for Shopify stores. 

• Browse the available Shopify stores and check the details, such as monthly revenue, profit margins, traffic, and sales history. 

Create a list of your interested stores

Now you have some stores that catch your eye, create a list of your favorite ones. As you go through each listing, note essential details like the store's niche, sales history, and traffic stats. 

Don't rush the process! You need to take your time and compare the stores based on their potential. You can always narrow down your choices later as you check the subsequent steps. 

Step 3: Do Your Research

The next critical step is to dive into the due diligence process. This step ensures you make a good investment. 

Understand why the store is being sold

Owners may sell their stores for many different reasons. Ideally, the business is healthy, and the owner will simply retire. There are some possible cases to expect:

• Debts or liabilities: Ask the seller about any debts or liabilities the business may have. The debts can affect its profitability or require immediate attention after the purchase. 
• Financial track record: Request access to the business's financial records. The store should have consistent cash flow. 
• Supply chain issues: The business may have faced supply issues. Supply chain problems influence inventory levels, customer satisfaction, and product availability. 
• State of equipment: Owners may quit their stores due to problems related to technical infrastructure. If you buy the store, you have to deal with outdated or unreliable equipment. 

Perform due diligence

Due diligence is essential before making a purchase. Each factor plays an important role in determining the store's true value and future potential: 

• Financial statements: You need to understand the store's revenue streams, expenses, and profit margins. This way, you can gauge whether the store is financially stable. 
• Traffic reports: Analyze web traffic data to assess the volume of visitors. High traffic often signals strong customer interest. Yet, ensure the traffic is relevant and converts to sales. 
• Supplier details: Reliable suppliers maintain inventory flow. Any issues here could directly impact your ability to run the business smoothly. 
• Store's performance: Look into the store's sales history, growth patterns, and customer retention rates. You can then earn insights into the store's past performance and future potential. 
• Reputation: Check the store's online reputation. Read customer reviews and check for any negative feedback, too. 
• Potential risks: Identify any risks associated with the business, like sales fluctuations and market instability. 

Evaluate the business owner

The reliability of the seller is a huge factor in your decision-making process. The person you are buying from should have integrity and be reputable within the online business community. Here is how to evaluate them:

• Trustworthiness: Look for signs that the seller is transparent and ethical. 
• Access to information: The seller should give you details about the store's operations, including analytics, tools, and systems. 
• After-sale support: Discuss whether the seller will provide assistance post-sale. Will they offer training and help with the transition? Their expertise is invaluable as you can learn the ins and outs of your new store. 

Step 4: Value The Store and Negotiate The Price

After thoroughly researching a Shopify store, you need to determine its value and negotiate the price with the seller. 

Valuation formula

To calculate the value of a Shopify store, you can use the following formula:

Net Profit x Multiple = Valuation

The net profit refers to the store's annual earnings. The multiple is a standard number used to value businesses in your sector. This figure differs by industry and is usually based on common practices and market conditions in similar businesses. 

Consult from third-party specialists

If you are not confident in your valuation, hire a professional. Certified Public Accountants (CPAs) or Accredited Senior Appraisers (ASAs) can help value businesses accurately. A business broker can connect you with these experts, providing you with a reliable valuation that removes the guesswork. 

Negotiation 

With your valuation, it's time to negotiate the price with the seller. Key factors to consider during negotiation are:

• Offers and counteroffers: Negotiation is a back-and-forth process. Be prepared to make initial offers and adjust them based on the seller's responses and new information you uncover. 
• Clear expectations: Ensure that both parties have clear expectations for the terms of the sale to avoid misunderstandings in the future. 
• Sale structure: Check if you are purchasing the business' assets or its stock because it will affect the price and terms of the deal. 

Step 5: Finalize The Deal

In this step, you must ensure you meet all legal requirements and complete the transfer of ownership. 

Legal agreements

To protect your interests and formalize the deal, check this list: 

• Letter of Intent (LOI): Outline your intention to purchase the store. Remember to include the purchase price, payment terms, and other agreed-upon conditions. 
• Payment terms: Decide whether to pay in full upfront or in installments. You also need to define how to transfer the funds clearly. 
• Escrow service: This service protects both parties. You can use it to hold funds during the transaction and release the funds only when all conditions of the deal have been met. 

Transfer Shopify store ownership

In this step, the seller transfers the store ownership to you. Here is what you need to do:

• First, ensure you gain access to the Shopify admin panel to manage the store's products, orders, and customer data. 
• Verify that the seller gives you the domain name, intellectual property, branding, and trademarks associated with the store. 
• Obtain access to any ongoing agreements with suppliers or third-party vendors. 
• Develop a clear plan that outlines the steps and timeline for transferring all operations. 

Step 6: Post-purchase Checklist

Now the store is yours. This post-purchase step helps set the foundation for growth and improvement. Here is the checklist for success:

• Marketing strategies: Develop a comprehensive marketing plan to promote your store. Social media, email campaigns, and search engine optimization (SEO) can all increase visibility. 
• Customer service: Review and improve customer practices to enhance customer satisfaction. It would be best to offer clear communication channels like live chat and email to address customer issues efficiently. 
• Product offerings: Analyze current products carefully. Based on the analysis, you can improve your offerings. You can also add new products or introduce promotions to keep customers engaged. 
• Growth opportunities: Find ways to scale your business. Data and customer insights can guide your decisions. You should set both short-term and long-term goals for growth. 

Common Mistakes to Avoid When Buying A Shopify Store

You can encounter pitfalls when buying a Shopify store, even with careful preparation. Watch out for these mistakes and learn how to avoid them: 

• Overpayment: Always base your offer on a thorough valuation using factors like net profit and industry multipliers. Negotiate the deal to ensure you're paying a fair price if necessary. 
• Lack of legal and financial checks: Review contracts, verify debts, and examine financial records with a professional's help. Skipping this step can expose you to legal issues. 
• Insufficient due diligence: Analyze traffic reports, supplier relationships, and customer reviews in detail to gain a comprehensive view of the business. Otherwise, you will be surprised. 
• No post-purchase strategies: Prepare strategies for marketing, customer services, and inventory management in advance. Clear goals will help you drive the store toward profitability. 

Bottom Line

Buying a Shopify store can be a fantastic opportunity! Follow the steps I've outlined here, and you'll be well-prepared to find a valuable business. Whether you work with a broker or buy directly from a seller, always prioritize security and get professional advice if you need it.

I wish you the best of luck in finding the perfect Shopify store for sale!

FAQs

Are there any extra costs when buying a Shopify store besides the purchase price?

Yes. You may cover rebranding fees, legal fees, and due diligence expenses. After buying the store, you also need to invest in updates on software and technology. 

How long does the purchase process usually take?

The timeline depends on the deal's complexity, due diligence, and legal procedures. Generally, it takes a few weeks to a few months. 

Will the seller support you after the purchase?

Many sellers offer after-sale support, like training or assistance with the transition. If you need help, clarify it in the agreement. 

What happens if the store has existing debts or liabilities?

If you are buying the store's assets, debts may not transfer to you. However, in a stock purchase, liabilities may come with the business. Thus, you must make it clear during negotiations.

What are the risks of buying a Shopify store?

Risks include overpaying for a store, acquiring fake traffic or inflated revenue figures, and inheriting operational or supplier issues. Conduct thorough due diligence to mitigate these risks.

Do I need technical skills to manage a purchased Shopify store?

No, Shopify is user-friendly and offers extensive resources. However, familiarity with basic store management, marketing, and customer service is helpful.

Can I rebrand a Shopify store after purchase?

Yes, you can update the store’s name, logo, design, and product lineup to align with your vision and branding.