Finding half decent drop shipping websites for sale can be like finding a needle in a haystack. There is a tremendous amount of BS online – especially when it comes to dropshipping.
Dropshipping is still a buzzword and listings on Flippa prove just how popular dropshipping is.
The real challenge is not in finding drop shipping websites for sale but rather in finding a QUALITY store with proven sales, profit and a decent amount of branding.
Buying a dropshipping store can be like buying an instant income but if you have zero experience with eCommerce or dropshipping you can get burned.
If a dropshipping website is for sale and it claims to make $5k/month profit then there is no guarantee that you will make $5k/month profit with it.
There are a lot of variables and a lot of nuances that you need to understand in dropshipping to really run a successful store.
While it can be a bad idea for a complete noob, it can be an incredibly good idea for someone with a bit of dropshipping experience under the belt.
Buying a dropshipping store can be a great shortcut.
If you have some skills and expertise you can bring to the table, you can greatly improve a store and turn it from mediocre success into a big success.
If you are great with Facebook Ads then you can quickly turn a store into a big earner.
If you are great at branding, you can turn a generic dropshipping product into a sleek brand.If you are good at email marketing you can capitalize on an existing store’s customer base and boost its sales.
You should always access the value of any dropshipping store you want to buy according to your own skills and experience and always keep in mind what value you can add to it.
You always want to focus on buying potential rather than profits and instant success.
How Much Can a Dropshipping Website Sell For?
How much is a dropshipping website really worth? This is the big question and determining the true value of a dropshipping business can get very tricky.
Website owners always over value their business while website buyers always under value the business.
Brokers tend to be the best at determining the true value – especially experienced brokers as they have a more neutral point of view and can look at the data more objectively.
As a rule of thumb, the value of a website can be calculated by applying an earnings multiplier. This can be between 24 and 36 times the monthly revenue (average monthly over 12 months).
When it comes to eCommerce websites, the rules are different though. The 24 to 36 times multiplier usually applies to content websites where there are little to no expenses. They also tend to get 90% to 100% of their traffic organically.
For an eCommerce store, revenue and profit are two vastly different numbers. eCommerce businesses have a lot of expenses with stock and products making up at least 30% to 50% of that number.
For established eCommerce websites you can use 24 to 36 times the average monthly net profit to get a rough idea of the value.
For dropshipping websites it gets worse.
They tend to be at the very bottom of the food chain in terms of value and resale value. Dropshipping stores typically sell for 10 to 12 times the average monthly net profit.
The 10 to 12 times earnings multiplier depends heavily on the traffic source, the supplier(s) and how established the dropshipping brand is.
What Drives The Value Of a Dropshipping Website?
Understanding why dropshipping websites tend to have a low resale value is incredibly important. It will help you to avoid buying a dropshipping store that will never make your money back. It will also help you identify a potential goldmine.
One of the main reasons why most people want to buy a dropshipping store is because they want to buy an income.
If you are not careful you could buy yourself an expense!
Assessing the true value of a business is both an art and a skill but seeing the potential of a business often requires just a basic understanding of what drives the value of an eCommerce dropshipping business.
If you can improve on just one of these “value drivers” you could turn the business from okay into great. Unfortunately, the flipside is also true.
The 5 main drivers that determines the value of a dropshipping website are:
- Net Profit & Net Margins
- Organic Traffic Value
- Reputation, Branding and Competition
• Net Profit & Net Margins
If you look at the net profit of a content website then it is usually in the high 90%. Almost everything they earn is pure profit and apart from hosting there are no real expenses.
If a content website gets abandoned for 3 to 6 months it will sustain its income in most cases. eCommerce websites have a lot of expenses and the main expense is stock and fulfilling orders.
Most successful eCommerce stores run on a 20% to 50% profit margin. Understanding a store’s profit margins are essential. It is one of the biggest leavers in an eCommerce business.
Revenue means very little – especially for dropshipping stores. Making a million a year with a 10% margin is an incredibly risky business. It only takes one system to break down and the business is in the red.
You can dropship from China with fairly high margins – often as high as 300%. The real issues come in with traffic acquisition and refunds and returns which usually pushes that 300% down to 20% to 50%.
The real lesson is to always look at NET profit and NET margins. Don’t be mesmerized by revenue.
• Organic Traffic Value
The 24 to 36 times multiplier is justified for websites that get almost 100% of its traffic from search engines. This traffic is ‘free’ and tends to be a much higher quality than traffic that is bought through advertising.
For eCommerce, most large brands command a fair share of organic traffic but very few eCommerce stores do not do some sort of advertising.
Advertising is not cheap. It typically makes up 30% to 50% of your product price. Most dropshipping stores rely almost exclusively on paid advertising through Facebook Ads or Google Ads.
Both these ad networks are great traffic sources and proven to work well for eCommerce but apart from the ad costs, it requires skill and experience to be successful at advertising on these platforms.
Dropshipping websites tend to have an organic traffic value that is close to zero. The exceptions are for dropshipping brands that have a big social media following.
Organic Facebook traffic has dwindled down to almost zero so that can not really be taken into account anymore. Having a large Instagram following could be worth something but that also needs to be accessed very closely.
A large social media following does not necessarily constitute a lot of organic traffic. You need to look at both engagement and on actual sales that come through social media to truly access whether it has any value at all.
Transferring a content website from one owner to another is fairly simple. Transferring an eCommerce business from one owner to another can be incredibly complicated.
Apart from the technical setup, payment processors and various accounts there are suppliers, support staff, warehousing and logistics that can be complicated to transfer to a new owner.
Relationships are never easy to transfer and most established eCommerce stores rely on relationships with suppliers and staff to ensure it runs smoothly.
Dropshipping stores have fewer moving parts and can be transferred much easier. If the dropshipping store is sourcing its products fromAliexpress then it can be a simple swap. If the store is sourcing from an agent in China then it could be more complicated but still not a big deal.
The biggest issue with transferability of a dropshipping store is with traffic acquisition. If a dropshipping store relies on Facebook Ads or Google Ads for its traffic then it is probably successful because of that and that alone.
This skill that is required to manage the advertising is almost never transferable.
Trying to replicate someone else’s Facebook Ads strategy could work in the short term but online advertising is evolving very quickly and you need to constantly update your strategies to keep up.
Monetization refers to all the avenues in which a website converts its traffic into money. For eCommerce this is fairly obvious because the main focus is in selling products to customers.
There is an art to monetization though and really good stores know how to maximize every dollar they could squeeze out of every customer.
Upsells, cross sells and bundling are all proven strategies that work. eMail marketing and upsells to existing and potential customers can often make the difference between a struggling dropshipping website and a thriving one.
I think that this is where the biggest opportunity lies for most people who have the skill and want to buy dropshipping websites.
Buying a store with a large customer base and little to no email marketing means you could almost double your dales in a few short months (with the right strategy).
• Reputation, Branding and Competition
Most low-priced drop shipping websites for sale lack proper branding. Branding allows you to create a higher perceived value for the products and tends to build trust with potential customers.
Buying a dropshipping website with little to no branding can offer a big opportunity as that can often turn the entire business around.
Sometimes you have no choice. With the biggest issue in dropshipping being poor products and slow shipping times, dropshipping stores can quickly build up a bad name on social media.
This is certainly something you need to do due diligence on as a poor reputation for a store can be an incredibly bad buy as it can take a lot of work to restore a bad reputation.
Finally, one of the main reasons why dropshipping websites have such low value is because they can be copied so easily.
If a store is dropshipping from Aliexpress (China) and uses Shopify then it only takes $200 and a Fiverr Gig to copy a successful store.
Most ‘dropshipping entrepreneurs’ (and I use the word entrepreneurs as a joke) append their days trying to reverse engineer successful stores.
This is a very popular tactic and one you need to be very aware of. If you buy a successful dropshipping website it could be in the crosshairs of many spy tools and many copycats looking for a shortcut to success.
The 7 Best Places To Find Drop Shipping Websites For Sale
The real challenge is not in finding drop shipping websites for sale but rather finding drop shipping websites for sale that offer stats and figures you can trust.
A big part of doing your due diligence before buying a website is looking at statistics. You need statistics that can be verified as true and accurate and above all you want to see the complete and true “health” of the store before you invest.
No dropshipping website that you buy will be an ‘easy business’ that you can just pick up and run with.
Every dropshipping business has its own nuances in terms of product and supply chain issues. Every Shopify store will have its own unique setup and there will always be some learning curve.
I would highly suggest that you never buy a dropshipping website from anyone without some commitment from them to help you with the transition. This can save you hours or days of work in trying to figure things out by yourself.
Here are the 7 best places to find drop shipping websites for sale
1. Exchange Marketplace
The Shopify Exchange Marketplace is owned and operated by Shopify. It is one of the most transparent places to buy a dropshipping website since all the reports and data that is presented in the sale comes directly from the Shopify store.
The obvious advantage is that Shopify can pull the data directly from the store which makes it almost impossible to fudge the numbers.
Exchange Marketplace also uses the actual Shopify store data to calculate an estimated store value while also taking into account historical sales data from the marketplace.
Here you can expect to pay a fair price for a dropshipping website, see exactly what the store has been up to with real Shopify reports.
Another huge advantage is when you buy a store on the Marketplace Exchange, Shopify makes it easy and safe to migrate the store to the new owner’s Shopify account.
The Exchange Marketplace tends to have a lot of starter stores that have little to no sales history. It also has a lot of lower valued stores and the typical price range for dropshipping stores is under $10,000.
Flippa is probably the most well known marketplace for websites, domains, apps and eCommerce stores. Its been around since 2009 and they claim to have sold more than $140 million worth of digital assets.
Websites and eCommerce stores make up roughly 50% of all the listings on Flippa and they command a massive online presence with a big user base.
There’s a lot of good stuff on Flippa but it is usually buried in a pile of crap. You need to do a lot of digging to find the gems and you need to have your wits about you to see through potential bullshit sellers.
Because Flippa has so many listings, scammers tend to target Flippa with dodgy listings. Flippa does offer verified credentials and verified Google Analytics reports but for eCommerce you usually need to see more.
Make sure you know exactly what you are buying and always cross reference the Google Analytics reports with Shopify reports (request these from the seller).
Most dropshipping websites for sale on Flippa sell for an earnings multiplier of 2 to 2.5 since most of them are less than 2 years old and most of them generate its traffic from Facebook ads.
3. Empire Flippers
Empire Flippers is a marketplace that focuses on websites, eCommerce stores and Amazon Stores and they have some of the very best online stores for sale.
The main reason why they only sell quality businesses is the fact that every listing is checked and verified manually by their staff.
They act more like brokers than like a marketplace which removes a lot of the risks from buying a dropshipping website.
This comes at a price though. Most of their dropshipping listings sell at an earnings multiplier of 30 to 40 which is way at the high end.
Their fees are much higher but they have some killer dropshipping websites for sale. You can buy a real business from here and remove a lot of the nagging concerns that come from buying something from Flippa.
Flippa also hides the details of the listings until a potential buyer shows real interest.
This protects sellers from unnecessary competition or prying eyes. It’s not a great place to go browsing and they also have very limited dropshipping websites for sale.
Empire Flippers have some really great Amazon FBA stores for sale and they can often be combined with a dropshipping strategy which is something to consider if you want to buy a more secure income.
SideProjectors is a marketplace that was intended for people to offload side projects they no longer work on.
Many people start an online business but run out of steam before it really reaches its full potential. Most people get distracted or start something new which leaves many half baked businesses on ice.
SideProjectors is intended for these businesses to find new owners and they have a decent selection of dropshipping websites for sale.
There are many starter stores with no or low revenue/profit and a few more established stores that are usually below $5000.
This can be a great place to pick up bargains. They do offer similar vetting of data that Flippa offers but be sure to do your due diligence as these smaller marketplaces can be soft targets for scammers.
5. QuietLight Brokerage
QuietLight is an online business broker and they specialize in buying and selling high value businesses with most of them being eCommerce brands.
Since every sale is handled by a professional broker, it is very carefully vetted and analyzed to make sure there is no funny business.
They only handle businesses that are over $100k in value so don’t expect to buy a cheap ass dropshipping store from them. Most of the eCommerce stores they sell are high value brands.
6. Digital Exits
Digital Exists is very similar to QuietLight and offers an online brokerage handled by professional brokers.
Although their average sales are well over the million mark, they do sell eCommerce websites that are in the $100k range.
Since it is manually handled by a professional broker you can buy through them with a lot more trust and they actually do have quite a few dropshipping websites for sale compared to QuietLight.
7. Facebook Groups
There are probably hundreds of Facebook Groups dedicated to dropshipping. Like anything on Facebook, this varies from the sublime to the ridiculous.
You are probably part of several groups already and probably know what I am talking about.
Finding good and reputable Facebook Groups run by real eCommerce experts do exist but they are not easy to find.
Most of the really good Facebook groups are small and are either part of paid courses or are paid groups in and of themselves.
These can be a great place to buy a dropshipping store since members regularly try and offload stores they no longer have time to work on.
You can even get help in verifying and vetting a store before you buy it.
As a rule of thumb, you need to be extra careful before buying anything through a private deal like this.
You do not have the backing of a marketplace to help facilitate the sale and transfer and many would-be dropshippers have been burned before.
Always use Escrow, always ask for direct access to Google Analytics and never trust anyone by their word.
Buying Drop Shipping Websites – Conclusion
At any given day there are thousands of drop shipping websites for sale on marketplaces like Flippa, Marketplace Exchange and Empire Flippers.
Most of these come with facts, figures and technical stats that allow you to make fairly good assessments of the health of these stores.
In the end it all comes down to what you want to buy. Do you want to buy a well established brand that guarantees you a certain profit? Or do you want to buy something that has a lot of potential to grow and become big?
What you have to offer, how much work you want to put in and how big your goals are will all need to be factored in.
If you are a newbie looking for a shortcut to success then you may get burned.
Buying any business comes with risk, so always proceed with caution and never spend more on a dropshipping website than you are prepared to lose.