There are two main strategies for breaking into eCommerce through platforms like Shopify: build from scratch or buy a Shopify store.

Buying a Shopify store helps you jumpstart your growth prospects with less rudimentary hassles. Is it worth the hype? Does the tantalizing promise of a ready-made business match the financial commitment required?

That’s the question I want to help you answer today. So buckle up. Let’s explore everything there is to know about buying a Shopify store. I'm talking about a business complete with a loyal customer base and a proven business model, all waiting for you to take the reins of management. Your path to entrepreneurial success starts right here!

The Prospects of Buying a Shopify Store

While you can build a Shopify store for free, buying a ready-made store is a shortcut strategy for anyone seeking a turnkey eCommerce opportunity. It offers viable prospects as expressed in the following indicators:

1. Established eCommerce Store: If you buy a Shopify store, you can start day one with a fully-built website and possibly existing customers. It saves you time and effort in building your online store.
2. Business Model Viability: The journey from paper promise to minimum viable product is brutal for most entrepreneurs. Buying a Shopify store that has already ticked those boxes and demonstrates profitability and market demand helps you leapfrog your entrepreneurial journey.
3. Existing Customer Base: When you buy a Shopify store, you acquire the company’s audience and customer base, which means brand presence and reduced marketing budget.
4. Operational Infrastructure: Shopify stores typically come with product sourcing, order fulfillment procedures, and supplier pipelines. These existing systems are invaluable for streamlining business operations.
5. Scalability and Growth Potential: Many online businesses die before reaching the scalability stage. Acquiring a Shopify store with proven growth potential makes your life much easier. You can quickly expand product lines, target new markets, or implement more effective marketing strategies to increase sales.
6. Portfolio Diversification or Skills Acquisition: Buying a Shopify store is also a way to diversify an existing portfolio or make up for the skills you don’t currently have. The added revenue stream, exposure to new markets, or new expertise helps improve an established business framework.

With all that said, let’s examine the step-by-step processes of buying a Shopify store.

“It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” - Warren Buffet

How to Buy a Shopify Store

Step 1: Research Prospective Shopify Stores

You must have some metrics clarified before you begin actively researching prospective stores. Be certain about the type of eCommerce business you wish to buy (i.e., niche or product to sell), the amount of money you wish to spend, the business stage of your ideal Shopify store, and the preferred business model; how the company makes money. Some stores dropship products, while others opt for the wholesale business model.

With that criteria in mind, you start doing your homework. Research stores that meet your checklist. Broadly speaking, when looking to buy a Shopify store, there are two methods for narrowing down prospects:

1. Work with specialist agencies like BuySell Empire, Empire Flippers, Flippa, Acquire.com, FE International, BizBroker24, Motion Invest, and Empire Flippers to find reliable Shopify stores on sale.
2. Do the groundwork yourself through direct outreach, seeking referrals from industry experts or colleagues, or by researching online. Exchange Marketplace, Shopify's marketplace, and business broker websites are valuable resources for finding available Shopify stores for sale.

In either case, you must be conscious of your pre-defined metrics, including the revenue streams, store maturity stage, business vertical, and the technology powering the store.

Once you’ve whittled down a shortlist, the next step kicks in:

Step 2: Dissect the Shortlist for Potential Unicorns

Conducting thorough research on every aspect of the Shopify stores you’ve chosen will help you isolate potential unicorns; stores with high growth potential. At this due diligence stage, the key elements to investigate are as follows:

1. SEO and Content Marketing: Before you buy a Shopify store, find out how prospective buyers locate the business. eCommerce businesses thrive on constant traffic. Aim for dominant organic traffic through informed SEO and content marketing, since relying on paid ads for customer acquisition isn’t sustainable. If in doubt, dig into Ahrefs or SEMrush for a site’s traffic sources.
2. Payment and Security: Even if the target store is profitable, without secure payment options, it’s only a matter of time before they run into dilemmas like chargeback fraud. Ensure your target Shopify store has standard security measures and complies with appropriate industry standards.
3. Inventory Supplier and Order Fulfillment: Evaluate the existing relationships, terms, and agreements with current suppliers and order fulfillment partners. Get familiar with inventory management processes, shipping efficiency, and supplier performance. That can highlight whether or not your supply chain is dependable, expose potential hurdles, and reveal potential partnership opportunities.
4. Operating Cost: Investigate how much it costs to run the business monthly before you buy a Shopify store. Look into the financials. Be sure the inventory, website operations, marketing and advertising, shipping and fulfillment, payment processing, software and tools, and human resource costs are clearly detailed.
5. Assets Under Purchase: Buying a Shopify store gives you ownership of the business’s assets, including the store’s domain and hosting rights, newsletter, social media accounts, Standard Operating Procedures/Intellectual Property Rights, patents owned by the business, brand assets like logos, and after-sale support.
6. Marketing and Advertising Channels: Social media and newsletters are two vital customer acquisition channels for eCommerce businesses. Ensure the audience is real people. And that newsletter subscribers aren’t fictitious names.
7. The Store’s Owner: Having gone through the architectural, inventory, financial, and brand reputation side of things, you must also ascertain that you’re dealing with someone with good intentions and clean records. Investigate the seller.

At this point, you have ample data to quantify the store’s value. If you determine that buying the Shopify Store will yield the expected ROI, then the next step is the negotiation phase:

Step 3: Negotiation and Purchase Agreement

Negotiating the purchase is another crucial step you must treat with all diligence. It requires critical consideration of the asking price, contractual terms, and all post-acquisition obligations. Let’s go through the processes:

Send Initial Proposal

Whether you wish to buy a Shopify store on your own or with the help of business brokers, lawyers, accountants, or eCommerce consultants, the practical buying process starts when you send a Letter of Intent (LOI) to the seller. The proposal should outline your intention to purchase the store, the proposed purchase price, general terms, the involved parties, and any specific conditions or contingencies you'd like to include in the agreement. This is the starting point for negotiations and sets the tone for discussions.

Scrutinize All Official Documents

Conduct thorough due diligence on vital legal and regulatory documents. This includes examining property documents like commercial leases or rent rolls, scrutinizing marketing and advertising materials, reviewing business tax returns from the past three years, assessing incorporation documents, certificates, and business licenses, as well as analyzing current income statements, payroll records, balance sheets, and cash flow statements. This comprehensive review ensures that all aspects of the business are speaking the same language. They will also inform your negotiation strategy and help you identify any potential red flags or areas for negotiation.

Identify Key Terms and Negotiate Purchase Price

Identify the key terms and provisions you'd like to include in the purchase agreement, such as assets transfer, liabilities, intellectual property rights, and non-compete or confidentiality agreements. Consider factors like the duration of the non-compete clause and any geographical restrictions.

Negotiate the purchase price based on the store's financial performance, growth potential, and market trends. Consider factors like revenue, profit margins, inventory value, and goodwill. Be prepared to justify your proposed price based on data and market analysis.

Use Escrow for Funds Transfer

Once all terms have been agreed upon and signed, including the initial deposit amount, installment payments, and the final payment upon completion of the sale, the best practice is to use escrow for funds transfer to avoid non-delivery risks. This is especially useful in case of any particular contingencies or conditions that need to be met before the sale can be finalized, like asset transfer and handover.

After you’ve accessed all necessary accounts and assets – and all the checks and balances are satisfied – the final stage is to close the deal. Then it’s time to bring your vision of buying the Shopify store to fruition. Ideally, you should actively engage your clientele and suppliers to strengthen bonds, refine your offerings, and implement an improved shopping experience.

Notable Risks to Avoid When Buying a Shopify Store

1. Failing to conduct extensive due diligence on the Shopify store. This can lead to over-valuing the business and missing significant liabilities like undisclosed legal cases, dependence on a single traffic source, or technology issues.
2. Signing contracts without examining all legal documents, including assets, supplier agreements, terms of sale, intellectual property rights, etc.
3. Making payments without escrow. This increases the risk of fraud or contract default.
4. Acquiring a Shopify store without a concrete transition plan that outlines responsibilities, timelines, and communication channels between the buyer and seller.
5. Not seeking legal counsel or expert opinion.

Buy a Shopify Store and Grow Rich

There’s no one-size-fits-all strategy to getting started in eCommerce. Building a Shopify store from the ground up might be an excellent idea if you prefer to gain the hands-on experience of creating an online business from idea to growth stage. But what if you want an established online presence, proven business model, existing customer base, operational infrastructure, guaranteed scalability, and growth prospects without breaking your back for them? In that case, it makes absolute sense to buy a Shopify store.

If you wish to buy a Shopify all by yourself, the tips and best practices shared in this article will guide you from the initial prospecting to due diligence, deal negotiation, contract signing, payment, and asset transfer. More so, specialized agencies and marketplaces exist (some of which I've highlighted above) to help you find the right store. Whatever option you choose, I'll say to do your own research and invest in stores with the potential for long-term profitability. And when you’ve acquired your potential unicorn, remember to automate your chargebacks to protect your earnings and relationships with regulators.