m&a advisorAs an M&A advisor we have seen repeatedly how social media impacts eCommerce businesses.  Clients have asked everything from how it can affect sales [both positively and negatively], to how it impacts valuation and where to go to get started.

Social Media is a double edge sword for etailers.  It represents an opportunity to engage closely with a customer base, to monitor your reputation and build brand awareness like never before.  It also allows consumers to engage each other to “spread the word” be that positive or negative.  You can capture new sales at near zero customer acquisition cost, or you can lose a loyal base overnight if mis-steps are made.

In terms of increasing eCommerce sales we see social media as one more tool of many that aids the internet business owner as he/she competes with the financial resources of much larger competitors.  Just look at the increasing costs of PPC over the last 5 years in most categories.  I still believe that while price is hugely important, consumers desire trust and relationship.  Contributing to forums, answering questions, blogging and being found on Facebook and Twitter allow a company to build that trust on the same level if not higher than the “big box” players.

A strong social media presence, along with an active newsletter base, quality organic rankings, affiliate program and more all contribute to growth of your ecommerce business.  Which in turn grows revenues and profits which increase the value of the business.

Keep in mind that buyers today have a far easier time of researching feedback on your company where as years past it was a near impossible feat.  A strong [positive] social media presence can certainly lend to a reduced feeling of risk on the buyers side and that can only be a good thing in terms of structuring a deal.

So get out there!  Start a blog, build a Facebook page, seek out forums and offer expertise.  Companies like HubSpot and WordPress offer tools to manage these efforts and maximize your time!  The days of “if we build it they will come” are over but eCommerce offers tremendous opportunities for those that embrace the evolution.