With the news that another e-commerce site – this time, it’s high-end interior designer brand Houseology – has fallen into administration, we’re going to run you through our top tips for buying a struggling e-commerce site and returning it back to profit.
What happened at Houseology?
It’s easy to think that everyone is shopping online these days, and that e-commerce businesses have it so easy, when compared with their bricks and mortar counterparts.
However, this is not necessarily the case. Indeed, a number of e-commerce businesses are struggling with a lack of consumer demand and poor confidence. As a result, many are reporting sub-par sales figures.
One such business doing this was Houseology, which announced in January 2020 that it was calling in the administrators. January is a common time for retailers to dissolve, as they often take a wait-and-see approach over the Christmas period, to see if they can turn their fortunes around.
However, this didn’t happen for Houseology, and the brand is now under the control of Leonard Curtis Business Rescue & Recovery.
The brand attracted some high-profile investment in its early days, from the likes of former Tesco CEO Terry Leahy, but this wasn’t enough to save it from failure.
A spokesperson for the parent company, Houseology Design Group, stated: “We are confident that the group’s assets will prove attractive to a buyer in the days and weeks to come. The business will now focus on its B2B division, which experienced its best ever year in 2019 and is on track for continuing year-on-year growth in 2020.”
If you’re on the lookout for an e-commerce acquisition opportunity, here are our top tips for making a success of an e-commerce rescue project.
Make sure the quality of the site is up to scratch
Maintaining a high standard of quality for the images and the copy that describes the products a business sells is of the utmost importance to the success of your e-commerce site.
If the site you have acquired sells great products but fails to show them off in the best light, this could be a reason why the business was failing to deliver up until now.
Investment in photography and copywriting can help to boost sales considerably and may help you turn a profit at a previously struggling business.
Make sure it’s easy to buy products on the site
Overly-complicated checkout processes and unclear information at the point of checkout will have customers abandoning their full virtual baskets at a rate of knots. If your site analytics show that people are filling their baskets but failing to actually put their purchase through to completion, this could be another clue to why the business was failing.
Many customers leave sites that require too much box-ticking and form-filling for them to do at the point of checkout. Offering customers the chance to make purchases as guests and use PayPal to pay, for example, can simplify the process considerably and will help to stop you losing valuable customers.
Invest in digital marketing
Digital marketing is an essential part of running a successful e-commerce business these days. Not only do you need to consider email marketing, but you also need an active social media presence in order to flourish and compete in most e-commerce fields.
Instagram is a particularly effective way to market your products, as followers can now link through to your e-commerce pages directly, making it more like an extension of your site.
As well making effective use of social media and emails, investing in your SEO can help you reach a better position in organic search results on Google.
Additionally, consider paying for Google Adwords or similar, to make sure you can generate a solid number of new users from the search engines, as this is how most people find what they want when shopping online.
Find your niche
If the struggling firm you have taken oversold a broad range of products, you might want to seriously consider finding a niche of your own after the takeover. Some of the most successful e-commerce sites specialise in something very specific – collectable and rare trainers, for example, or sustainably-produced Indian jewellery.
Offering a niche product to consumers helps you to find your audience right away. Although you may think going niche excludes potential buyers, it can actually help you to stand out in a very crowded marketplace and fill a gap no one was aware even existed.
If you have a particular interest or relevant experience in selling the specific produces you’re looking to market, that only adds to the value you bring to your e-commerce site.
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