Shopify recently launched ‘Exchange’, a marketplace that allows owners of eCommerce businesses to buy and sell their stores. One of the key components of buying a business is evaluating if the opportunity exists to turn it around so that you could recover your investment and make a profit on your purchase. Perhaps you already own a string of businesses in the industry that the seller is operating in – this gives you the leverage to make use of your existing customer base to drive traffic and revenue.
In a majority of the other cases though, the true business opportunity lies with identifying ineffective marketing strategies deployed by the former owner that you could fix to trigger growth. In this article, we will take a look at some ways you could make use of SEO to evaluate whether a business looking for a buyer is worth investing in.
Start with the basics
In 2017, basic onsite SEO such as page title and meta descriptions may not carry as much weights as they did a decade and a half ago. That being said, these are certain factors that every business must follow. If anything, a website that does not adhere to such fundamental SEO principles should raise a red flag since it is quite likely that the seller has not deployed more advanced SEO strategies either. Fixing these basic SEO flaws alone could give your site a bump in traffic that should help you trigger a turnaround.
Understand TG buying behavior
What is the target demographic for the business? If the store is catering to a young population, chances are that a lot of buying happens over mobile devices. Industries like fashion and apparel encourage many casual purchases over social media channels like Facebook and Instagram.
Understanding the buying behavior of your target group (TG) could unravel new business opportunities. For instance, if the seller has not invested in a mobile site or does not have a social media page for their apparel store, then investing in mobile SEO, ASO (App Store Optimization), or SMO (Social Media Optimization) are fantastic opportunities to leverage.
Content marketing
Content marketing is one where many businesses fail terribly; this presents a great opportunity for a buyer.
Most online businesses today realize the need for a blog. But with more than 2 million blog posts being published every single day, your blog strategy should not merely be about updating your site with new content each week. Instead, it should be three-pronged and focus on three things – earning backlinks, increasing conversions and establishing brand identity.
Evaluate the business on the effectiveness of its content strategy. You should consider buying the site if you can identify a content strategy flaw that you could fix to turn the business around.
Traffic source
A business that has multiple sources of traffic is a lot more sustainable than one with a single traffic source. Although strategies like SEO are more long-term, a business that relies solely on organic search engine growth may be extremely vulnerable to Google algorithm updates. A lot of small businesses rely quite heavily on word of mouth marketing. While this channel is not as vulnerable as the other traffic sources, such businesses leave a lot of money on the table by not investing in other traffic channels.
If you are looking at buying an eCommerce store, one area that you must definitely look into is the share of traffic from paid sources like Adwords. An online store that relies heavily on PPC is overvalued and should be ignored. On the other hand, a store that has little to no traffic from Adwords is not an attractive buying proposition.
A buyer must also look into the capex outflow on other traffic sources. A business with a good content strategy might be spending money on social media to build traction. Such a business might be overvalued. At the same time, a business that does not have such a user acquisition strategy offers an opportunity to turnaround.
Takeaway
The success of a business depends on its execution and this is an area that business owners rarely get right. Identifying the opportunities that exist and leveraging them is the quintessential mantra to succeed in buying new businesses and making a profit off the purchase.
