Getting an e-commerce business up and running is something that doesn’t come naturally. It’s easier than ever to start a business, but you’ll still have many learnings throughout the process. Once you’ve got to the point where you’ve successfully run one company, let’s explore some reasons why business owners consider expanding with a second business.
Why operate multiple businesses?
Focus is the key to success for anything in life. Without focus, someone else will provide a better level of service or offerings with that specific need. In today’s day and age where consumers can buy from almost anywhere in the world, or at least their own country and region, focusing on what might be called a “niche” isn’t so small.
Selling dog shoes might not seem like a viable business idea, but gone are the days when you are selling to the just ten dog owners within your town or neighbourhood. Even if you operating a retail store in New York City or Shanghai it might sound difficult to find enough buyers of your niche product, but you’re not just selling to two large metropoles, your potential market with an e-commerce business is anyone with a credit card and an internet connection.
If you are an incredible marketer, or a photographer, running one business where you only spend a portion of your time on your most value-adding activity is not allowing you to do what adds the most value.
Focus doesn’t have to imply only running one business; it can mean using technology and partners to take care of the necessary parts so you can focus on your value-adding skill.
There are a couple of ways that you can hone in on your craft:
- One route is to grow your business so large that your value-adding activity turns into as a full-time job where that level of specialization is needed.
- Another route is to use technology to automate various processes and hire people who are the best areas other than your own. Then spend your time on what you do best across multiple businesses.
Making the glue is as important as making the pieces being glued.
Some business founders don’t consider themselves a crafter or an expert in one particular thing because they work on so many different things on a typical day. However, being able to create the glue that holds all the moving pieces of a business together is an expert skill itself and something that can only really be learned from doing.
Add your missing piece, or keep everything running together
Finding the right accounting software won’t make or break your business, but without any accounting software, you’ll have some trouble.
Instead of spending time setting up a configuring an accounting software that you already spent countless hours learning how to use, you can buy a business that already uses the same finance tools you are familiar and save time.
If you’re familiar with a fulfillment tool like Shipstation or Shippingeasy and intimately know all the features and workflows, you’ll likely choose the same tool again for a second business. On Exchange, you can browse businesses for sale using Shipstation or Shippingeasy already in their business operations.
Utilize economies of scale to increase profitability
Reasons for buying a second business may be to reach another geographical market, sell different types of products, or have a separate brand with a different identity. Your other businesses are inherently different in some way, but there is no need to re-invent the wheel for everything.
Examples of how you can take advantage of scale:
- Better shipping prices. By shipping combining the shipping volume of three separate businesses, you’ll have the ability to negotiate lower prices than would have been possible of any themselves. If you decide to pass on your lower shipping prices to the customers, you could increase sales across all the businesses as customers are always looking for the lower and lower shipping costs.
- Buy more raw materials that can be used for all of your businesses and negotiating price discounts with your higher volume. This might be cardboard boxes that your products are shipped in or even just packaging tape.
- Faster testing and learning. Not all learnings will be transferable from one brand to another, but by being able to test more ideas at once, you’ll be able to learn faster than a competitor.
- Avoid seasonal periods with low sales. If most of your sales happen in a certain period of a year, this can be difficult for a business with certain fixed costs. Many major costs like marketing and advertising can be reduced in low sales periods, but at the end of the day, you are still paying the same rent for your office monthly. Unless you are hiring temporary labour, you may have employees on the payroll that don’t have enough to do for certain months which can not only be demotivating, but costly.
Browsers businesses for sale categorized by their operations
We've created some categories of shops for sale with several popular business operation apps. Businesses for sale on Exchange also include apps within each listing page as well and for any other questions not listed the seller will be able to provide more details.