Many eCommerce store owners do not even realize that they have an asset that can be sold.
The truth is that a profitable eCommerce store is not only an asset that can be sold, but also a highly desirable asset. Since 2017, the number of e-commerce companies sold and the average multiple at which they are sold have increased every year.
All of this means that investors and buyers have recognized e-commerce as a profitable online business model, and now they are willing to part with money to have it. Let’s talk more about how to sell online store in this article.
How to sell your ecommerce business
Tip #1
Prepare your website for sale
By preparing for an exit early and making informed decisions during the exit planning process, you can significantly increase the value of your business.
Planning for an exit and selling your business involves finding the right advisor, agreeing on a valuation, meeting expectations and rules, and understanding the acquisition landscape.
- Reduced owner engagement. High owner involvement can be a disadvantage for your business to a potential buyer, as most buyers are looking for businesses with streamlined operations that are easy to take control of and scale. When planning your exit, make it a priority to delegate or outsource your day-to-day responsibilities as much as possible. Make sure that these processes are well documented so that a potential new owner can see the level of your involvement in the eCommerce store.
- Conduct a technical SEO audit: Organic traffic is an important part of driving customers to your store, and a solid content strategy is key. Consider conducting a technical SEO audit of your content to make sure you’re not missing out on any low performers and are following SEO best practices.
Tip #2
Determining the value of your e-commerce business
The old adage that “something is worth what the market is willing to pay for it” is certainly true. However, you can increase the likelihood when selling eCommerce business, said WebSite Closers, by presenting interested buyers with a complete overview of your market position and potential future growth.
For example, you can present your current sales and profit margins in comparison to past, present, and future growth trends in your market space. You can inform potential buyers about the most profitable customer acquisition channels and the factors that drive current sales. It’s also important to explain how your eCommerce business growth is expected to be sustainable over the next 12 months, two years, etc. based on specific market trends.
Tip #3
Attractive qualities for potential buyers
A successful eCommerce business is based on a complete understanding of the sales funnel; information that is vital to potential buyers. This means that your presentation should include information on the key drivers of future sales, as well as evidence of continued growth in both new and repeat sales through traffic from different platforms.
Additionally, branding, copyrights, logos, and trademarks are important elements that must be in place for a successful and profitable sale.
Tip #4
Where to sell an online ecommerce business
- Selling through a marketplace
Online marketplaces such as Flippa or WebsiteBroker may initially seem attractive to e-commerce owners. Companies can be listed on the exchange for a small fee. Documentation and due diligence requirements are minimal. Marketplace sites tend to get a lot of traffic, but how many of these visitors are high-quality buyers is highly debatable. While the listing fee may seem reasonable, note that many of the most popular marketplaces also charge a “success fee” or commission of 10-15%.
- Auction sites
Auction sites have many of the same advantages and disadvantages as marketplace sites. Flippa runs both an auction and a marketplace model. Sellers can set a time frame for the auction, a reserve price, and let the market speak for itself. In essence, it is an eBay for online businesses and should be approached with extreme caution by owners of well-known and successful e-commerce sites.
- Direct sales
While the desire to cut out the middleman is understandable, selling e-commerce directly to a customer (which sounds like a simple prospect) can end up being a time-consuming, expensive, and overwhelming process.
For a seasoned entrepreneur with extensive experience selling businesses and a solid network of contacts with reputable buyers, direct sales can be a viable option. For sellers without such experience, it can be anything but, and there is a high probability that the business will be sold at a price well below its full value.
How to sell a company: bottom line
Even if you don’t have plans to sell in the near future, preparing to sell your business is a useful mindset so that you can streamline operations and improve sales performance. If and when the time comes to exit the business, you will be in the best position to negotiate a high premium to reflect its value.
