Many aspiring entrepreneurs rush into buying dropshipping stores without doing proper research, often swayed by the idea of instant success. This mistake results in business failures and financial losses. Remember, not all stores for sale are made equal—some are scams.
This is totally avoidable; you just need to know the right and wrong way to buy a store. I’ll break everything down in this article to guide you in buying the right store the right way—with ease. Don’t make the same mistake others are making!
The Right Way: Established and Custom-Built Stores
I categorize done-for-you (DFY) stores or those for sale into assets and opportunities. Buying assets and looking for the right opportunities is the right way to buy a dropshipping store.
Asset: Established, Profitable Store
“Asset” stores are DFY stores with established authority and profitability. They’ve been consistently generating income for some time, ideally at least 12 months. Most of the time, their owners sell them for a multiple of the store’s revenue. For example, a store that’s consistently making at least $5000 monthly can be sold for up to 30x of that—up to $150k.
They’re the best and only right way to buy a DFY store because you’re getting something that 100% works and makes money. These are all the main things you can get with the purchase:
Track record and history of profitability
Authority and credibility in the market
Product listings and suppliers
Existing customers and traffic sources
Connections with suppliers
Because of this, you won’t have to start from scratch—less work for you. No need to do product research, build supplier relationships, find the right traffic sources, etc. All you need to do is continue the operations and improve what the store has.
The sellers or previous owners of these stores also provide support once you buy the store. Support and training are essential for learning how to manage and run the store.
Where to find: Look through reputable marketplaces like Empire Flippers.
Opportunity: Custom-Built Store
If you don’t mind spending time, money, and effort working on a store, opting for a custom-built one is the smartest alternative. These stores typically cost less than established stores, so it’s also a good option for those without huge capital.
But remember, a custom-built store will only serve as a stepping stone, not a guaranteed profit machine. I call it an ‘opportunity’ because it’s not generating income yet. The potential for profit lies in your ability to operate and market the store.
At Drop Ship Lifestyle, we offer our members the choice to have a custom-built store for their business idea. Our DFY Stores are built specifically for each client. We design the site around their chosen niche and ideas, add demo products to help them learn the system, and hand it over. This gives them a real starting point for a business—an opportunity. It’s meant to teach them how to build and grow their own assets.
With a completed website, here’s what you get with a custom-built store:
Logo
Content and product pages
Uploaded products
We can also set up the store’s Google Analytics and some initial ad campaigns for you if you want.
The Wrong Way: Turnkey Stores
The one thing you should avoid when buying is a turnkey store. This kind of DFY store is often marketed as a “ready-to-go” store with products—like an established store. However, they’re not sold based on a multiple of existing revenue or profit because they typically have none. You’ll often find them offered as a store that will give you immediate profitability even with little effort—a total scam!
I have never seen or known anyone who succeeded with turnkey stores. Avoid them. Here’s how to spot these stores online:
Generic, Copy-Pasted Design and Content: These stores use basic and common designs and content, giving buyers no sense of identity and branding.
No Sales History: When offered, they have no proof of a demonstrable track record.
Sold on Less Reputable Platforms: You can often find these stores on platforms like Flippa or even eBay. They’re also frequently advertised on Facebook, so be wary.
High Prices: These stores are too expensive for what they offer.
Checklist and Key Questions Before Buying a Store
It can be hard to identify which store is which, especially for beginners. To ensure you’re buying an asset and not a turnkey store, use this checklist:
- Track Record of Consistent Sales
When inquiring about the store, make sure to ask for a record of their sales. Do they have one? If not, stop and don’t continue with the transaction. If they do, make sure they have at least 12 months of consistent sales to guarantee the store’s profitability.
- Reasonable Price
Is the asking price justifiable? Is it a reasonable multiple (around 30x) of its proven monthly profit? If not, take the time to consider. However, if you opt for a custom-built store, just make sure they’ll build your desired store at a fair price.
- Intellectual Property (IP) Package
Aside from the store, what will you get with the purchase? For an asset, it should come with the following:
To check the store’s reputation and verify their claims, search for reviews on Google and YouTube.
- Good Reputation in the Marketplace
Aside from the store’s reputation as a business, check the reputation of the seller. Have they been vetted by a reputable marketplace known for selling established online businesses?
- Not Marketed as “Turnkey”
Is the store marketed as a “turnkey” solution for instant profit? Remember, if they can’t show proof of consistent profitability, it is just a waste of money. Look out for other signs of it being a turnkey store as well, including hundreds of pre-loaded products.
Takeaway
Before investing in a done-for-you (DFY) dropshipping store, make sure you know what you’re getting. Look out for the red flags and make sure you’re buying an asset. Remember, the right store should have proven profitability, valuable connections, and command a significant price.
If you want an alternative, your best choice is a custom-built store like what we do in Drop Ship Lifestyle. We can help you build your own store so you can have a valuable asset that you can eventually sell in the future. Join our free webinar to learn how to get started!
For any questions, drop them below and let us know!
