What *NOT* to do when you buy an e-commerce site

What *NOT* to do when you buy an e-commerce site

I recently sold an e-commerce site I owned. The buyer had plenty of time to ask questions before the sale and was happy¬†with the price. He didn’t even negotiate.

The transfer included not just the site with all products + suppliers, but also the facebook page and the ad data. I showed the buyer which products did well, how to turn the successful ads back on, and how to check their performance.

Happily Ever After?

I wish.

Last week, I got an email from the buyer. He was frustrated with the site, said the products didn’t really sell, that he’s run some ads but they didn’t work, that the site isn’t working and he doesn’t know what to do with it now.

So, I looked at the site. It’s is a great example of what NOT to do after buying an e-commerce site.

How to kill a successful e-commerce site:

  1. Change everything
    1. Remove things that the seller recommended keeping to increase conversions
    2. Add things that could decrease conversions, like higher shipping prices
  2. Spend almost nothing on new, untested ads
    1. Ignore the proven ads included in the sale
    2. Ignore how much the previous owner spent on ads
  3. Be surprised that the site isn’t wildly successful with your “improvements”
  4. Blame the seller for selling you a “bad” site

My first thought was that this is one isolated case. This can’t be common, right??

Surprisingly, this actually happens quite often when new owners take over successful websites. When I think about it, some of my early non-success online even followed a similar pattern.

Ouch! I’m guilty of it too.

Common mistakes after taking over a website:

  1. Assuming you know what will work
  2. Underestimating the value of continuity
  3. Changing many variables at once
  4. Changing things before you have established a baseline to compare
  5. Not investing enough; unrealistic cashflow expectations

Here is what you SHOULD do after taking over a successful e-commerce website:

  1. Continuity is key! At first, keep everything as close as possible to how the old owner had it. Even if you think you can improve, make sure you can replicate their success first. You bought this site for a reason- make sure to use every bit of their know-how to get it running at least as smoothly as when you bought it.
  2. Once you have a baseline, NOW you can make changes. Make small changes, one at a time, and monitor their success compared to the baseline. The things you thought would work might not, and the things you thought wouldn’t might¬†work well.
  3. Track your progress. Keep notes on what helped your bottom line and what didn’t. Remember that humans aren’t perfect, our memories and impressions are biased. Only the numbers tell you when you’ve really improved.
  4. Don’t be afraid to invest in the data you need! One day may not be enough to see if a promotion is working or not. $5 spent on ads may not be enough to see if they are working. If all else fails, put things back exactly the way the previous owner had them.
  5. Plan your cashflows realistically! Especially with businesses driven by ads, remember to put in perspective how much the previous owner was spending to generate their results. If they were spending $2000 per month but you’re spending $500, you can’t blame them for your lower sales… Figure out how to replicate their results first, then see about improving performance.

Taking over a website is always more complicated than you think. It’s easy to get caught up and lose perspective. Hopefully these tips will help you (and me) not to make the same mistakes next time we buy an online business.

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