HOW TO EVALUATEAN ECOMMERCE

BUSINESS AS A BUYERAND GET THE BEST DEAL!

BY IGOR SOSHKIN

WHAT IS IT REALLY WORTH TO YOU?

• Sale Price = NET PROFIT x 0.3, 0.5, 1.0, 1.5, 2.5 or what?– Answer is to each its own

• Facebook is valued at 80 X Net Profit• Same business can be valued at .5 or 2 or 10 to different buyers • Market value should be based on you and not what the seller claims it to be

– NET Revenue – The actual owner salary would be NET Profit minus all expenses excluding owner salary• Are you looking to Replace your current Job• Are you looking to Invest in order to sell it for more money

WHAT IS IT REALLY WORTH TO YOU?

– Do you see a short term or long term growth opportunity?• How fast can you make the money back?• What will be the profit if you sell it in one year versus the amount of work you

will put in?

• Where is the traffic coming from and will it continue?– If traffic is organic, will it continue to stay in its position?– Who did the SEO for the owner? (So you can re-use them)– If traffic is paid, will the owner give you the account with the

campaigns?

WHAT IS IT REALLY WORTH TO YOU?

• How many Suppliers and what are the discounts?– How many suppliers does the owner deal with?– Compare discounts that the owner gets versus current competition

and evaluate the risk of more competitors coming into the market– Will owner keep the original supplier account or will the account

be transferred to you? If they keep the original will the discounts be transferred?

– How much of the business was drop shipped? The part that wasn’t drop shipped are you ready to handle it? Do you want to handle it?

MEASURING GROWTH OPPORTUNITY

MEASURING GROWTH OPPORTUNITY

• STEP 1 - AWARENESS (MARKETPLACES/CROSS CHANNELS)– Did seller list on eBay? What is the opportunity (Use Terapeak.com)– Did seller list on Amazon? What is the opportunity (Competition on

Amazon vs. demand using Keywordspy.com)– Did seller syndicate with Google Shopping, The Find, Bing Shopping– Did seller use Adwords (use Spyfu.com to monitor this)– Does seller have organic SEO? How Much according to Spyfu.com– Did the seller conduct any kind of email marketing campaign– Did the seller do any kind of social media marketing

MEASURING GROWTH OPPORTUNITY

MEASURING GROWTH OPPORTUNITY

FOR MORE INFORMATION GOTOwww.bit.ly/convertbetter

STEP 2 - WEBSITE OPTIMIZATION (WEBSITE ITSELF)

MEASURING GROWTH OPPORTUNITY

• STEP 3 – CLOSE SALE (SALES FUNNEL AND SALES STAFF)– Was the seller available on the phone during business hours– Was the seller using a proactive live chat to engage with visitors– Was the seller actively monitoring forums using Google Alerts to

reply to questions (you can see if seller has incoming links from forums using Majestic SEO > Referring Domains)

– Was the seller answering the emails on time– Was the seller doing the customer service or did he have workers

• If workers were they experienced or oversea workers with heavy accents?

– Is the seller a good closer (based on his business selling skills you can tell)

HOW IMPORTANT IS THE REPUTATION?

• DAMAGE CONTROL– What if the website has bad feedback?– How much work is required to clean it up

• Bad feedback is no a deal breaker, it is a leverage for you to negotiate a better price because you need to go in and do damage control by explaining to new customers that this was a previous owner and its under new ownership

– For More Tips on Damage Control visit - https://bitly.com/googleOP

TECHNOLOGY USED FOR THE SITE

• What platform is being used for the business?• What kind of reviews does the platform have?• How easy is it to migrate to another shopping cart

platform?• How much maintenance is required to update the website?• Is the seller a webmaster doing his own website updates or

does he outsource to someone? How will you handle it?

TECHNOLOGY RECOMMENDATION• I recommend Shopping Cart Elite (

www.shoppingcartelite.com)– Feature Rich Website– Full User Friendly CRM System– Very easy to migrate from the old platform– Retain Ranking– Conversion features such as

• Price Control• Visitor Generated SEO• Using content to create Blog Network• Visitor Behavior Analytics• eBay, Amazon, Google Shopping, The Find, Bing Shopping syndication

– TO LEARN MORE ABOUT SCE GOTO: www.bit.ly/scemoreinfo

TECHNOLOGY RECOMMENDATION• EXAMPLES OF SITES ON SHOPPING CART ELITE

– www.customwheelsntires.com (wheels)– www.allstartire.com (wheels)– www.rnrwheels.com (custom homepage)– www.sudburytirezandwheelz.com (tires)– www.coopscustoms.com (auto parts)– www.remusexhaustshop.com (auto parts)– www.autoaccessorystore.com (auto parts)– www.custommaxima.com (niche vehicle store)– www.veneerz.com (custom homepage)– www.hangerdiva.com (clothing)– www.wellbeinggps.com (supplements)– www.atomiksupplements.ca (supplements)– www.portasigns.com (signs)– www.powerssecurity.com (security)– www.russiatourtravel.com (service)– www.ogcpafirm.om (accounting)– www.westernsoundcharters.com (boating)– www.efurnitureny.com (furniture)

OPERATIONS OF A BUSINESS

• You might be planning to run the business alone, which is fine, but depending on how big the business is and how fast you want it to grow will depend on your team and how productive you can be.

• I created a chart showing all possible tasks an ecommerce business should have. Of course some have less priority than others, but when I ran my multi million dollar ecommerce retail business, I had all of these covered.

OPERATIONS OF A BUSINESS

FOR MORE INFORMATION GOTOwww.bit.ly/ecommerceoperation

TIPS FOR STARTUP EXPENSES

• What expenses to prepare for:– Payleap (www.bit.ly/payleap) to get discounted rates

• $15.95 for everything

– Skype for Main Line• $9.99 per month (if prepaid for a year)

– Ring Central for Unlimited Toll Free (www.bit.ly/ringcentral4495)• $44.95 per month (instead of $50 + 15 taxes)

– PayPal Express Checkout • Free

– Live Chat • $9.99 per month

– ecommerce Shopping Cart (www.shoppingcartelite.com) • $99 and up per month

PROTECTING YOURSELF POST SALE• You buy a business and find out that it was a scam, Now what?

– Use Escrow– Ask Seller to give at least 3 days to evaluate the business before releasing

escrow (Escrow offers this option)

• You buy a business and the seller starts a new one the next day, Now what?– Before you ask the seller to do so, you need to consider if the seller poses a

competition risk for you. If they spent a year and got no where close where you will be in a year the risk is very low. If you feel the seller spent many years developing the website and using his knowledge and discounts he can start one and in a year compete head to head with you then you should consider it.

– Ask the seller to sign a non-compete agreement for a minimum of one year which will restrict them from starting the same identical business. If the seller refuses, it shouldn’t be a deal breaker. You can use this to negotiate a lower selling price to minimize your risk.

GET HELP EVALUATING A BUSINESS• My name is Igor Soshkin, I am the founder of Shopping Cart

Elite, an ecommerce platform. You can read more about my expertise at www.igorsoshkin.com

• I have 12 years of experience in ecommerce and operating online businesses. I have bought and sold multiple ecommerce companies for my self and my clients.

• I CAN HELP YOU EVULATE YOUR NEW PURCHASE BY GIVING YOU THE BUSINESSES:– OPPORTUNITY– RISKS – FAIR MARKET VALUE

GET HELP EVALUATING A BUSINESS• USING MY KNOWLEDGE I CAN ALSO NEGIOTATE THE DEAL

ON YOUR BEHALF TO GET YOU THE BOTTOM LOW PRICE

• HOW CAN YOU HIRE ME TO EVALUATE A BUSINESS?– I WILL EVALUATE UP TO FIVE BUSINESSES, FREE OF CHARGE IF YOU

AGREE TO MIGRATE THE NEW BUSINESS ON SHOPPING CART ELITE, AFTER YOU PURCHASE IT. WE WILL HELP YOU WITH MIGRATION

– TO LEARN MORE ABOUT SHOPPING CART ELITE GO TO www.bit.ly/shoppingcartelite

GET HELP EVALUATING A BUSINESS– IF YOUR NEW ONLINE BUSINESS WOULD NOT WORK WITH SHOPPING CART

ELITE, I CHARGE $550 ONE TIME TO EVALUATE THE BUSINESS YOU WANT TO PURCHASE AND GIVE YOU A FULL REPORT WITH MY OPINION AS WELL AS FAIR MARKET VALUE.

– IF YOU WILL WANT ME TO NEGIOTATE THE DEAL FOR YOU, I CHARGE 10% FROM WHATEVER AMOUNT I SAVED YOU DURING THE NEGOTATION.

• WANT TO GET INTO A NEW BUSINESS?– IF YOU ARE IN THE MARKET TO FIND A NEW BUSINESS, I CAN LOOK AT MY

CLIENT PORTOFOLIO WHO WOULD BE WILLING TO SELL THEIR BUSINESS BELOW FAIR MARKET VALUE

• FILL OUT THE FORM BELOW AND GET MY BUSINESS EVALUATION EXPERTISE TODAY

–www.bit.ly/igorhelpme