Ecommerce business for sale
Thinking about putting your ecommerce business for sale? If you’d rather bring in a large sum of money now, instead of waiting for your business to generate that kind of profit, then selling is a good idea. How do you go about selling your ecommerce business?
- Selling an ecommerce business
- Determine the value of your company
- What does a buyer look for?
- Ways to sell your ecommerce business
Selling your ecommerce business
There are several reasons why a business owner can decide to sell their company. It doesn’t necessarily mean that business is bad, you are done with it or that things aren’t going as expected. Some entrepreneurs find that their business has grown to a level that doesn’t suit them anymore. Perhaps it takes too much of their time. Some business owners might want to slow down, or might even think about retiring.
Whatever the reason, selling your business can bring you lots of new opportunities if you do it right. Once you make the decision to sell, be sure to prepare yourself and your business in order to make the most of it.
Once you decide to put your ecommerce business for sale, prepare to make the most of it.
Determine the value
Obviously, you’ll want to get a good price for your business. You can make an estimation of the company’s value by using your revenue. Buyers usually want to make a return on their investment within three to five years. Calculating your yearly profit can give you an indication of the price you can ask for your business.
What does a buyer look for?
In some cases, you might have to sell your business rather abruptly… Because you got offered a job somewhere else, or because you’ve become incapacitated. But usually, entrepreneurs can prepare their ecommerce businesses for sale. It helps to know what a potential buyer is looking for, as this can help you increase your value.
The first thing a potential buyer usually looks at is the revenue and profit of your company. It’s also interesting for a buyer if you can show them that your company has been growing its profit over the years. If you’re not in a hurry to sell, ensuring that growth over the years before starting the process can definitely help.
Potential buyers are inclined to pay more if your business shows that further growth is possible. Preparing annual financial accounts, including a balance, can be of use here. A buyer will want to see a steady growth of your turnover and profit. An increase of the equity capital will also have a positive effect on the value.
The value of your business will be higher if you can show possible further growth.
A buyer wants you to be clear about your finances. Not only do they want to know your profit before tax, but also more details about your ecommerce business. Provide a clear insight into the gross and net margins of the products you offer.
It also helps to provide data about your customer base. If you have a good average order value or returning customers, a buyer will be more likely to go for your online store.
The number of customers you have says a lot about the value of your online store. However, a buyer will also be looking for opportunities that could increase that number. Having active social media channels on which you can achieve an enormous reach in addition can increase value. An active mailing list of customers can also add a lot of value. Even if you make a small profit, optimizing this aspect of your business can increase your company value a lot. Be sure to also have a marketing plan, so that potential buyers will know what the costs of your strategy are.
Your website itself also plays an important role in the taxation. Make sure your website is easy to use: it should be immediately clear to customers and potential buyers what your concept is. A nice, modern layout and well-functioning software are crucial. Be sure to use the correct keywords in your web texts, which will ensure that your website ranks higher in Google’s search results.
It will also help to make your website future-proof. Make sure that the appearance of your website is up to date, mobile-friendly, has a short loading time, and that your product photos look perfect. A buyer will then know that they don’t have to spend money on these aspects for the time being, ensuring that you can get a better price.
There are aspects of your business that aren’t visible on the outside, but can add a lot of value. The flexibility of your company is one example. Having short-term lease contracts for software and warehousing is more attractive to a potential buyer, because that makes it easier to operate the online store from another location.
Oftentimes, buyers already have their own warehouse or packing location and will want to merge them. If you have long rental contracts or packers that are permanently employed, this can have a negative effect on your value.
Another aspect you should optimize is your purchasing. Have you negotiated discounts with a supplier? Perhaps you have even gained exclusivity for some products? Another perk would be the ability to return products to your wholesaler, when they normally don’t accept those. Having good deals with your supplier or wholesaler can convince a potential buyer. Any trademark rights will also increase your business value.
How should you sell your ecommerce business?
Once you know your ecommerce business’ value, it’s time to put it up for sale. It’s up to you how you will go about that. Who are you going to sell it to? Some entrepreneurs decide to sell their business to a competitor. This might seem like a weird move, but a competitor will be very interested in your client base. They are often willing to pay a large sum of money for it.
If you’re sure that your online store has a lot of potential, you can also contact a business broker. They’ll look for a suitable buyer, according to your requirements and conditions. A broker will also be able to offer your business on platforms.
If you want to sell your business quickly, you can consider auctioning it. At most auctions you have the option to set a minimum price, so you don’t run the risk of having to agree to a low bid.
With the continuous fluctuations of the economy, finding the right moment to sell your ecommerce business is difficult. Timing is of the essence though, if you want to get the best price for your business. Make sure that your business is making a profit when you put it up for sale. Selling your business will take time, don’t expect that it can be done in a couple of weeks. For many companies, it actually takes months or even years. Be patient and take your time to learn more about the market.
Shopify business for sale
Depending on your business, however, there are also certain marketplaces where you can sell and buy businesses. Shopify has its own Exchange marketplaces specifically for users of its webshop software. With their large client base, it’s easy to showcase your online store on this marketplace to a large crowd.