What should I check before buying an online fabric or yarn store?
Check how cut-to-order fulfilment and remnants work, how colour accuracy and returns on cut goods are handled, whether wholesale suppliers allow a new owner to sell online, how dye lots and indie-dyer supply are secured, and who controls the domain, store platform and social accounts.
An online fabric or yarn store has no shop floor, but it has its own quiet complications. Goods are cut or wound to order, colours look different on every screen, and the best suppliers may be small. Before you commit, learn how an order really moves from the shelf to the customer, and which parts depend on the current owner’s accounts and relationships.
Cutting, remnants and fulfilment
Ask how orders are cut, measured and packed, how long it takes, and who does it. Cut fabric leaves remnants and short ends, so ask what happens to them and how they are counted in stock. Watch a day of orders if you can. Find out what space, tables and equipment come with the sale and what you would have to supply.
Colour, returns and dye lots
Colour is the main source of disappointment online. Ask how photos are taken, what customers are told about screen colour and how returns on cut goods are handled. Yarn adds dye lots, so ask how lots are tracked and matched, and how much of the supply comes from independent dyers who may rely on the current owner’s relationship.
Suppliers and accounts
- Whether wholesale suppliers allow online sales, and whether they will keep supplying a new owner on the same terms.
- Who controls the domain, store platform, email list, payment accounts and social media pages.
- Whether the accounts are in the business’s name or the owner’s personal name.
- Any marketplace or shipping arrangements that are tied to the seller.
The general checks for web shops are in can I sell my Shopify store, which is useful from the buyer’s side too.
Related reading
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Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat is inventory
- 03Canada Revenue AgencyGovernmentInventory and cost of goods sold
- 04Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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