How To Buy A Dropshipping Store
Are you thinking about getting into dropshipping? Do you feel overwhelmed at the thought of building a store from scratch? Thankfully, it’s possible to buy a pre-made dropshipping store so you can start selling right away.
There are so many options to choose from. It almost feels like you have to be an expert right out of the gate.
In this post, we’ll go over the advantages of buying a premade store, why dropshipping makes it easy to do so, evaluating the price and value of a dropshipping store for sale, and marketplaces you can use.
Why Should I Buy A Dropshipping Store?
A dropshipping store can be a great way to earn money online – either as a full-time gig or a side hustle. There are plenty of business opportunities in dropshipping and – if you’ve got the right setup and mindset – you can make a tidy profit.
If you want complete control over every step of the process, or you’re an experienced dropshipper, then you can build a dropshipping website from scratch. But this takes time and it’s not everyone’s cup of tea – some people would prefer to hit the ground running.
Thankfully, there are multiple marketplaces where you can buy a dropshipping store right off the bat. There are a few types available:
- Basic Premade Dropshipping Store. These are brand-new with everything set up, but without a customer base, name recognition, or brand identity. These can cost as little as $50.
- Turnkey Dropshipping Store. These are the next step up – just “turn the key” and start selling! They’re also new, but they’re already a little bit established.
- Fully Established Dropshipping Store. These have already been around for a while and have a developed brand and clientele.
- Custom Premade Dropshipping Store. Similar to the Basic Premade store, but you can tell the developer what you’re looking for.
You’ll have to decide which one best meets your needs.
If you’re looking for the surest bet to make money, you’ll probably have to go with a Fully Established Dropshipping Store since these have regular revenue that you can use to determine how much you’ll profit you can take in. However, they can be pricey and require a large sum of money upfront.
Finally, there are quite a few advantages to buying a premade dropshipping store, including:
- Less work. You don’t have to go through the whole hassle of starting from scratch.
- Saves you time. If you find the right listing, you can buy a dropshipping store within a few days.
- Start selling right away. This is especially true if the store already has an established customer base and name recognition.
- Avoid common mistakes. Buying a well-established dropshipping store can save you from making some common beginner’s mistakes.
- Learn from the best. If you buy a successful dropshipping store, you can learn how to create profitable stores in the future.
What Makes Dropshipping Stores So Easy To Buy?
Buying a premade or already-functioning online store is a common method to get a jump start on your Ecommerce business. It’s basically a “hack” that lets you start making money right away.
When you’re browsing for stores to buy in one of the marketplaces, you’ll see that there are different types that you can choose from. However, dropshipping stores are by far the easiest to buy and run. Why is that the case? What makes dropshipping unique compared to the other models?
Let’s take a quick moment to look at the dropshipping model a little more closely:
As you can see, there’s one crucial reason: you don’t have to worry about the inventory! This is a serious hassle and it makes both running and buying an online store much more complicated.
Let’s think about this for a second: you’ve found an online shoe store that you’re interested in buying and it uses a conventional, inventory-holding model.
In addition to the actual store, there’s $20,000 worth of inventory in a storage space somewhere. The asking price from the seller has to include all the inventory and the storage space. Additionally, if they employ anyone to store, pack, and ship the orders, their salary and benefits also get included in the final asking price.
This complicates the process of determining the value of the store. It also makes it more complicated for you to do your due diligence when you take a closer look at how much your store is worth.
With dropshipping, none of these factors come into play because there are fewer logistical issues. You’re basically just buying the website, social media following, email list, customer base, dropshipping supplier relationships, and – most importantly – the brand.
What Gives A Dropshipping Store Value For Buyers?
In business, when we talk about determining the value of a store, there’s a fancy word that people use: valuation. This is an important concept, so let’s discuss it further.
When you buy a dropshipping store, you’ll want to get a return on investment (ROI). In other words, you’ll spend a certain amount of money to hopefully make that money back and then some over time.
If you want to optimize your ROI, you’ll have to understand what gives a store value. That being said, there are five key areas to consider:
- Age of the store. Dropshipping stores that have been around for longer will have a more established customer base.
- Financial information. This includes revenue, profit, and projected growth rate.
- Customer base & traffic. This includes user engagement, sources of traffic, and returning customers.
- Operations & logistics. As we discussed above, this is extra easy when you’re buying a dropshipping store – you just have to consider the dropshipping suppliers.
- Conversion rate & performance. This includes overall sales, performance versus competitors, and the general Ecommerce market.
Within each of these five areas, you should always consider the opportunity for growth. In other words, does the store have potential? Can you improve any of these areas?
For example, there are tips you can use to increase dropshipping sales and various ways that you can use marketing to improve user engagement and boost your conversion rates.
RELATED POST: Your Complete Marketing Guide For Dropshipping
Additionally, if you start dropshipping on Shopify, you can improve most of these areas via good design and apps that are available from the Shopify App Store. Certain dropshipping suppliers will even offer apps to automate the dropshipping process and make it even easier.
GreenDropShip is a US-based supplier and wholesaler with a Shopify dropshipping app and a huge selection of natural and organic products, including groceries, home goods, baby products, vitamins, supplements, and beauty items.
How To Determine The Value Of A Dropshipping Store You Want To Buy
We’ve talked a little about what gives a dropshipping store value in a general sense, so let’s take a look at what that means specifically.
If you decide to buy a dropshipping store, you’ll have to browse listings on various marketplaces for stores on sale (we discuss this in greater detail further below). The listing will have an asking price that usually includes:
- The actual store
- Supplier lists
- Web address and domain
- Logo and branding assets
- List of email subscribers
- Social media accounts
- Product photos
Please note that this does not include the physical inventory. With dropshipping, the supplier has the inventory so it’s never transferred to you from the seller.
When you’re looking to buy a dropshipping store, it’s best not to go with just any asking price – you should do your own due diligence. Examine the store a little more closely and see if it is actually a fair price to pay.
In order to do this, let’s take a look at how you determine the value of the store.
Double check the store’s profit & loss statement
This is an absolutely crucial bit of information. Most sellers will set the asking price for the dropshipping store based on their monthly net profit. The asking price will vary, but it can be anywhere from 10X to 30X monthly net profit. It’s a bit of a Wild West-type situation – there’s no standardized pricing model and it’s a seller’s market. They set the price.
For example, if the seller is asking for 20X the monthly profit for a store that makes $5,000 per month, then: 5,000 X 20 = $100,000. If you buy a dropshipping store at that price and the profits continue at the same rate, then you’ll reach your ROI in just under two years.
Before we go on, let’s take a moment to understand a key difference in financial terminology:
- Revenue. This is the total income from sales, usually tracked either monthly or annually.
- Profit. This is how much money is left over after all operational costs and overhead are deducted.
In other words, profit is how much money the store actually makes.
If you want to check the store’s monthly revenues and profits, then you’ll have to ask the seller for the right documentation. If the store is more than a year old, ask them for a Trailing Twelve Months (TTM) profit and loss statement. This will give you the revenue, operating expenses, and profit (net income) for the past 12 months.
Once you have it, you’ll want to take a close look at not only the revenue and profit, but cost of goods sold and operating expenses. If cost of goods sold is too high, then you can decide to go with a different dropshipping supplier with better wholesale prices, a more reasonable membership fee, and lower shipping rates.
Additionally, if you see that the rate of refunds and returns is high, then you’ll have to examine why that’s happening. In dropshipping, this is most frequently related to poor quality items and long shipping times, both of which can be fixed by choosing a better dropshipping supplier.
Evaluate the user traffic and number of unique visitors
While you’re evaluating the dropshipping store’s value, ask the seller to give you Google Analytics access so that you can take a closer look at the user traffic and number of unique visitors.
First of all, you’ll want to double check if the user traffic is legitimate or if it’s fake. Some dishonest sellers can inflate the user traffic by using bots or just buying it from a third-party. Temporarily inflating the numbers will make their dropshipping store appear to be worth more than it actually is.
Luckily, Google Analytics makes it easy to identify this kind of shady behavior with their Audience Overview function. Let’s take a look at a screenshot:
This dashboard gives you a bird’s-eye view of all the key metrics. In order to spot fake traffic, you’ll want to keep an eye on the following:
- Very high or very low Bounce Rate. Usually bounce rates that are above 90% or below 10% are suspicious.
- Very short Average Session Duration. If it’s below 30-50 seconds, you should be skeptical. Remember that online stores should have longer Avg. Session Duration since online shoppers frequently browse.
- Low Pages/Session. If it’s below 2 pages/session, it could very well be fake traffic.
Additionally, if you want to accurately determine how many unique visitors came to the site, then go to the top left under Overview and change the setting from Sessions (the default) to Users.
You can then track the users over a given period of time by changing the date range to the past 3 months, 6 months, 1 year, or since the beginning of the traffic history.
You should also examine the pie graph on the lower right for New Visitors versus Returning Visitors. If the figure for New Visitors is lower, then the dropshipping store may still have plenty of room for growth (depending on its overall potential). Ideally, you want the Returning Visitor figure to be fairly high (40 to 60%) since this means that the store has regular customers.
Find out where the traffic is coming from
We’re not quite done with Google Analytics – this tool can give you a wealth of useful information! Go to Acquisition –> Overview to see where the traffic is actually coming from.
In the dashboard, you’ll be directed to Acquisition Overview and see a breakdown of traffic sources, including:
- Organic search
- Paid Search
Let’s take a look at a screenshot to get a better idea:
When it comes to the various sources of traffic, Organic Search is the absolute gold standard and is the most desirable. There’s one major reason for this: It’s free!
A high proportion of traffic from organic search means that the store is ranking high in Google search engine results. The higher the store ranks, the more likely online shoppers will come to the store.
If organic search is high, that means that the seller probably took the time to really improve search engine optimization (SEO) for the dropshipping store. This can be done in a number of ways, including having a blog with optimized content and unique product descriptions that are rich in keywords.
There are multiple tools you can use to evaluate the SEO health of the website:
- SEMRush. Evaluate the quality of the store’s organic search traffic. It also gives you an overview of what keywords the site is ranked for and the volume of organic traffic due to these keywords.
- SEO Checker. A free tool that gives you a quick evaluation of a website’s overall SEO health, including meta information, page quality, and link structure.
- Ahrefs. Gives you an idea of the backlinks and keywords in the domain name.
- Seoptimer. Get an accurate assessment of page speed and structure.
Finally, you should also take a close look at the Paid Search results. These come from Pay-Per-Click (PPC) campaigns like Google Ads or Facebook Ads. If there’s any Paid Search traffic, even if it’s a small amount, make sure that the seller transfers all the information, details, and logins for the ad campaigns so that you can continue them and boost traffic even more.
Take a look at the social media accounts
Nowadays, the world revolves around social media. It’s come to dominate our daily lives, making it an incredibly powerful tool for connecting with consumers and potential online shoppers. You definitely don’t want to neglect it, especially since it’s possible to use them for free (if you’re not paying for ad campaigns).
Make sure you ask the seller if they have social media accounts for the store, including:
If they do, you have to get all the login information! This will allow you to continue connecting with customers.
You should also assess the followers for all the accounts. Take note of the number of followers for each account and evaluate how engaged they are – the higher the user engagement, the better. This means likes, comments, pins (for Pinterest), shares, retweets (for Twitter), and so on. Think of it like an ongoing dialogue.
Don’t forget that it’s possible to buy fake social media followers and likes from third-party providers. Again, this could be done by a dishonest seller trying to pump up their social media presence to get a higher price. Thankfully, it’s pretty easy to spot the fakes – you just might have to do a little digging and check their profiles or followers.
Additionally, take another look at the Acquisition Overview. Is there any traffic that’s coming from Social? If so, that means you’ll need to determine which accounts are directing the most traffic and to assess the seller’s current social media strategy. You should also double-check if the seller has any relationships with influencers on some of these platforms, especially Instagram.
Be sure to check out How To Market An Ecommerce Store On A Tight Budget to learn how to optimize your social media accounts and get the most bang for your buck.
Check the email subscriber list
If you’re trying to make your online store profitable, it’s a good idea to build up an email list of subscribers. This allows you to connect with online shoppers who’ve already bought something or who are thinking of buying something from the store.
An email subscriber list allows you to build an ongoing relationship with online shoppers. According to a study, 92% of online shoppers don’t buy anything during their first visit to an online store. Additionally, 30% of consumers would rather buy from a website they’ve bought from previously.
As a result, using email marketing can boost your sales by increasing your conversion rate. If you don’t get that sale on the first visit, you could get it on the second, third, or fourth visit, especially if you made a good impression.
Plus, if you’ve already made the sale during one of those visits, it’s easier to get the customer to come back and buy something else. This is how you turn one-time shoppers into regular customers.
This means that a bigger email subscriber list means more leads – it’s more opportunities for you to make that conversion. For example, if there are two stores that are alike in every way but one has 20,000 email subscribers and the other only has 5,000, the one with 20,000 will be worth more.
When buying a dropshipping store, ask the seller about the size and health of their email list. Additionally, if they use any email marketing tool like MailChimp, ask to see screenshots of their email campaigns. If they’re particularly successful, then you can ask the seller to share an email template so you can effectively pick up where they left off.
RELATED POST: Top Email Marketing Strategies For Dropshipping
Where To Find Dropshipping Stores For Sale
If you’re looking to buy a dropshipping website, there are a few options that you can choose from.
This is the premier marketplace for buying dropshipping stores. Since it’s powered by Shopify, it’s especially easy to use if you want to buy a Shopify store. This includes dropshipping stores, inventory-holding, and Amazon FBA.
You can choose from various niches, including:
- Food & Drink
- Fashion & Apparel
- Health & Beauty
- Electronics & Gadgets
- Toys & Games
- Home & Furniture
- Books & Magazines
You can browse the listings and sort them by Price, Revenue, Age, or Industry.
Let’s take a look at a screenshot:
Payment is handled by Escrow.com to keep the entire process legitimate and running smoothly. The basic steps are:
- Buyer and seller agree to a price on the Exchange Marketplace.
- Seller initiates the escrow.
- Buyer makes the payment to Escrow.com.
- Seller gives all necessary information – including assets, documentation, and account information – to the buyer.
- Buyer does their due diligence and inspects all the information..
- Once the seller is done with their inspection, they accept the sale and Escrow.com releases the payment to the seller.
Exchange Marketplace is the most widely-used and trusted marketplace for buying dropshipping stores.
Be Biggy is a leading provider of high-quality, profitable turnkey dropshipping websites. If you’re just starting out in the dropship game, then this is a great place to go. This is especially true if you’re looking to buy a Shopify dropshipping website.
Not only does Be Biggy offer dropshipping websites for sale, but they guide clients through the entire process. This includes selecting a profitable niche, finding suppliers, and establishing their website to help them reach customers right away. This means you can hit the ground running!
There are three basic kinds of websites for sale:
- Regular Shopify Dropshipping Websites
- Premium Shopify Dropshipping Websites
- Exclusive Shopify Dropshipping Websites
The regular listings include premade, brand-new dropshipping stores for Shopify. As a result, these are the most affordable.
The premium listings are for turnkey dropshipping websites that are a little more advanced than the standard listings – they’re still new, but they have a more fully-developed brand identity and more features.
Finally, the exclusive listings are for established Shopify dropshipping websites that can have large customer bases and a regular revenue stream. These are the most expensive since they’re already profitable.
This is another well-established marketplace for buying dropshipping stores – to date, they’ve facilitated over $200 million in sales of online stores.
Much like Exchange Marketplace, you can browse stores based on niche, including:
- Pet Care
- Home Goods
- Personal Care
- Food & Beverages
- Apparel & Accessories
Let’s take a look at a screenshot:
You can see that each listing has a Monthly Net Profit listed on the far right, making it easy for you to select profitable stores. You can also see a list of previously sold listings that give you the Sale Price and dropshipping niche for each store.
Empire Flippers carries all major types of retail stores, including dropshipping, inventory-holding, and Amazon FBA. You can find the type under Monetization in the listing.
Finally, there’s also the Empire Flippers Free Evaluation Tool. You can use this during your due diligence to double check the asking price of a dropshipping store for sale. You’ll have to ask the seller for the relevant information and then you can answer the following:
- Number of hours worked per week.
- What’s the age of the dropshipping store?
- How many products are there?
- Is there a private blog network?
- What is the average monthly gross revenue? (average sales over prior 12 months)
- What is the average monthly net profit? (average income after costs are deducted)
- On average, how many unique website visitors does the site have each month?
- How many email subscribers are there?
- How many social media followers in each account?
Once you input the information, they’ll give you a range between Absolute Low and Absolute High. This can help you determine the value of a store you might be interested in buying.
This is another widely-used and highly-respected marketplace for buying all kinds of Ecommerce stores, including dropshipping, Amazon FBA, inventory-holding, and Shopify stores.
First of all, you can browse by industry, including:
- Food & Drink
- Body Building
- Diet & Nutrition
- Weight Loss
- Hobbies & Games
- Baby Products
- Sports & Outdoor
Additionally, Flippa has a Browse Assets function, allowing you to take a close look at all the important information when buying a dropshipping store:
It also has the best system for browsing: you can filter the results based on Monthly Users, Monthly Pageviews, Monthly Profit, Price Range, Age, and Authority Score:
You can also look at Recently Sold listings (like on Ebay) to get an idea of what other stores are selling for.
Much like Empire Flippers, they offer a free Online Business Valuation to give you an ultra-accurate valuation of a given dropshipping store.
Finally, they also offer a verification and assessment service called Flippa Due Dilligence:
- Red Flag Report $1,000. You can do a deep dive into a store’s information going back 1 year.
- Standard Report $1,500. The analysis goes back 2 years – recommended for stores between $30k and $200k.
- Enhanced Report $2,000. The analysis period goes back 3 years – recommended for stores above $200k.
If you’re looking for a new or additional supplier for a dropshipping store that you’ve bought, GreenDropShip has over 20,000 natural and organic products, most of which are made in the USA.
Join GreenDropShip And Start Selling Natural & Organic Products Today!