I have a professional acquaintance that is basically giving me his eCommerce store that he let sink during covid. The store has been running for 6 years, it had a steady growth before covid shipping issues but he is simply burnt out and doesn't want to build it again. Due to shipping costs and delays, he sold off existing stock and reduced marketing but didn't shut the site down or anything. He will be closing his business (in another province) and I will register everything under my company. He will retain some ownership and profit %, still to be determined.
This is not a dropshipped store or widget sale on Amazon. Its a large product range at 1.5-15K USD/ unit. There is warehousing and inventory costs.
My backstory: I have owned and operated an industrial service company for the past 10 years. I have been looking into eCommerce and have discussed it with this guy for years. However, I never made the move due to my time in my first company. I recently greatly reduced my service business (almost closed) as I was burnt out with being my clients' firefighter.
I have worked with this guy for a couple of years and trust him and don't think this is a scam or anything. I have ran the numbers and Im comfortable with it from a profit standpoint. But what dew diligence do I need to complete before taking this over? If this was another service business I was purchasing locally I would be reviewing fines, taxes, legal liabilities/ pending litigation, ect.
But What do I have to check when he is shutting down and Im taking it over just the assets? Anyone been through something like this? Do I have any liability to his previous commitments ie: warranty?