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opportunity to buy my competitor. How to go about it

brand merge, buying competitor, seo, loyalty...

11:03 am on Nov 10, 2012 (gmt 0)

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One of my oldest competitor is moving on and emailed me to let us know that they were selling parts of their business.
It is niche ecommerce, they were one of the pionneer and did not evolve quickly enough. Their sales are slowly declining, their product range is not exclusive enough, big guys are direct competitors to them (not our case) but they are still:
twice our sales, with decent average profit,
twice our traffic,
good rankings on some keywords,
clean backlink profile (not a lot of links, but good ones, not anchor issues,etc.. better profile than ours)
Their brand KW gets 3 times the traffic our brand KWs. Website is thin, but clean.

We can buy their mailing list, their domain/site but not their inventory . it has been sold already. They have 4-5 times more customers on their list than ours. But I will need to get know how active they are.Loyalty: 40% of their traffic is returning customers (ours is lower)

Site is old, brand is aging and looks like a website designed in early 2000. I had the impression 5 months ago they were giving up. I am guessing cutomers did too. Prices are being slashed all over the site.

So how do I go about it?

Ultimately I would want to find a solution where I get the benefit of their domain, traffic, customers while keeping my brands or merging the 2 brands.

Number wise, it looks like i should just merge my brand into theirs, but slowly declining sales over the last 3 years and their positions/image in the market indicates to me it might not be the right solution.

I have been advised to buy, and run it seperatly for 6 months. I am a one person show, so running two website could get difficult, especially if I have to buy all the inventory new for the new season. it is risky. I could share a bit of the invetory but that would also require doing everything twice (product listings etc..) to avoid duplicate content.

I could simple 301 redirect and ensure that my customer service and product selection could work for the competitor's customer. I was working on that anyway.

But if I am buying them out, I want to make the most of my purchase, and I feel like I could lose all these good rankings they have etc..

Do I merge both brands and go with something like "site A" by "site B"?
If I plop my site on their domain, I am taking the risk of losing their rankings by the fact a lot of the site will change, no?

I am in dire need of some advice here. It makes sense for me to buy, but I am not sure how to go about it.
3:05 pm on Nov 10, 2012 (gmt 0)

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Buying their domain/brand and immediately redirecting to yours is a mistake in my opinion, especially if it is different product offerings. You'll likely lose the repeat customers this way very quickly which is the cornerstone of an established business.

My advice change nothing at first. You mentioned a lot of inventory, but you should have access to past sales information. Maybe you could trim down products that are slow sellers, or combine your current products into the new site? This is hard to say without knowing your specific type of business.

My experience having one or more related sites that stand alone is a great insurance policy these days and is just a good way to diversify your business. Overall it sounds like a great opportunity you shouldn't pass up.
7:52 pm on Nov 10, 2012 (gmt 0)

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Thanks Particleman. Your answer confirms all the other advice i got and the current positionning we are looking at:
keeping both for not, capturing a slightly older target on the new site, sharing some product if need be, sharing vendors eventually and upping our ability to order in qty.
We are currently on the same product type,same nice, just different products and younger target.

If anyone feels i should go a different route, let me know since I am happy to hear everyone's opinion. It i a sizable investment for a small company like us if you include the brand new stock will need to invest in in a short amount of time to be ready to re-launch "new" after Xmas.
8:52 pm on Nov 14, 2012 (gmt 0)

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You know the optimal solution: run two sites. But like you mentioned, there's a lot more work associated with running two sites,so the decision isn't quite so easy. If you're a one-man army, then your current site will have some negative effects as you direct some of your own time to the new site. Don't fool yourself- you can do one site way better than you can do two sites.

If you merge the brands, you're going to lose some business no doubt. The question is how much? If you're going to retain 95% of the business, then it's a no-brainer: merge the brands. If you're going to retain only 50% then it's a no-brainer the other way.

So my opinion would tend to be to run both sites separately for 4-6 months with the ultimate goal of merging them unless you can either stream line things enough that you can successfully manage both without serious detriment to the other or if you can hire someone else.
10:31 pm on Nov 14, 2012 (gmt 0)

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Thanks votrechien (like your nickname by the way! very french of you). yes, I had the same idea. Id would settle for running both but for a limited time only just to soften the transition.

So, turns out, that the lady, who in the first place was not planning on really selling the business, suddenly feels like it is worth a lot more than I am willing to pay for it.

So I passed on the opporunity, unless she does not find another buyer. We will be focusing our energy on advertising heavily to their customers as well as increasing our range of products (which we need anyway).
I got a lot of data form her, wich is good in an way, since I have insight on what we can become with more work.