Last Updated on November 23, 2023 by asifa
Ecommerce business, and especially ecommerce business for sale, has shot up by leaps and bounds in the last 2-3 years. Boosted by the fact that more and more people have started preferring shopping online than visiting physical stores and the convenience of paying online using a variety of options, sales, revenues and popularity of ecommerce businesses are at an all-time high, in general. With your business doing well, it is natural for you to consider selling it for a healthy windfall. Or, there may be other reasons which may have ignited the thought of putting your ecommerce business for sale. It’s essential to prepare beforehand if you are interested in selling your business. You might think selling a business is intimidating, but you could close a profitable deal if you prepare well. Whatever your reason may be, as long as you are clear about them this article will help you prepare your ecommerce business for sale and get the best returns in the process.
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Ecommerce Business Valuation
Your first step towards this journey should be to get your business properly evaluated for its worth. Be mindful, worth doesn’t mean just the price. There are several factors involved in calculating the worth, or the value, of the business. Here are a few of them.
The longer your business has been in existence, the more it is perceived as stable. Stability and the experience of having seen ups and downswings is something that buyers value a lot. Many experts say a business should be at least 3 years old for it to get a robust valuation.
Businesses that have established their brand name and have a good recall value among customers is sure to be valued high. Buyers also pay attention to the percentage of repeat customers, as this brand loyalty is likely to continue after they purchase it.
Naturally, any potential buyer will be highly interested in the present state of affairs, as well as the historical performance of the ecommerce business for sale. Strong sales and revenues with low liabilities and high Seller’s Discretionary Earnings (SDE) are a buyer’s delight.
These, among several other factors, will be warranted for you to get a professional valuation done. The result of this process should be a figure that you can expect when you sell your business. Now, based on your reasons for selling you can mark this figure as your walk-away price. In other words, if you are not selling under distress or do not have a financial urgency then you can take your time in negotiating with buyers and not accept bids lower than your walk-away price.
While the valuation is an important process to put a target figure, other tangible and intangible factors need to be considered while preparing your ecommerce business for sale.
Performance indicators like Traffic, Reviews, Refund Requests, Repeat Purchases and many others are regularly maintained and tracked. Paying attention to these figures and making sure you are on the high performing list is important. Before you sell your business make sure that you tick all the right performance boxes.
Social Media Presence:
An often overlooked, yet easily achievable, aspect is your business’ social media footprint. By choosing free platforms like Facebook or Instagram you can connect with the community and make your presence felt. This will help you tremendously when you finally decide to put your ecommerce business for sale. You may also consult professionals to create an online buzz for your business/brand. This is also likely to get new customers interested in what you have to offer.
Buyers are apprehensive of businesses that offer a single or a seasonal product. For a sustainable business, having a basket of products is favourable. Over-reliance on a single product is deemed risky and risk is what every buyer is looking to minimise. So, before you sell it is worth considering how you can diversify your products and services to mitigate this risk.
Logistics and Peripherals:
When you sell your business there are several interconnected aspects at play that need to be considered. For example, your suppliers and vendors will be affected as well. Whether they will be a part of the ecosystem put together by the new owner or not is something that should be ascertained and communicated timely. Another example can be your current ownership structure and the legal angles involved in the transfer of ownership. Start paying attention to these and other related aspects to be truly ready to sell your ecommerce business.
The prime objective of selling the ecommerce business, that you have lovingly built from scratch, is to get the best deal in the process. The journey should start with establishing a clear reason for selling, a clear target price and a proper exit strategy of how you intend to use the proceeds from the sale. Using professional experts, consultants or even online acquirers can be quite beneficial to prepare your ecommerce business for sale. To know more, click on: https://unybrands.com/blog/online-business-for-sale-2021-guide-to-e-commerce-business-valuation/
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