Planning to Sell Your Ecommerce Website? Here’s What You Need to Know

by Josh Biggs in Business, Ecommerce on 18th July 2020

If you’re like many entrepreneurs, then selling your eCommerce business is your ultimate goal. Apart from getting a significant amount of money from your business sale, it also presents an excellent opportunity for learning.

Even so, selling your eCommerce business is not a walk in the park. Apart from experiencing difficulties and challenges during the selling process, selling your business can also take a toll on your emotions. And there’s a good reason for this – it has cost you many hours of sleepless nights and even tears to build a profitable site.

You shouldn’t worry, though. In this article, you will learn how to sell an eCommerce website quickly and for the best price. Read along and learn more.

Ecommerce Business Valuation

The valuation of an eCommerce business follows specific metrics. Among other factors, the volume of sales, the cost of running the business, revenue distribution, and marketing costs are used to determine the value of an eCommerce business.

Ideally, the sale price of eCommerce businesses in the range $20k – $2m is obtained by multiplying between two and three times the annual net profit.

However, the value of your business will also be affected by other things, including processing fees, wholesale costs, marketing fees, shipping, as well as the cost of employees.

As you can see, the process of valuing an eCommerce business can be a daunting task. As such, it is advisable to work with a broker experienced in your niche to help get the most accurate valuation.

What Makes an Ecommerce Business Attractive to Potential Buyers?

Many factors will make an eCommerce business valuable. One of the things that potential will be concerned before deciding to buy an online store is the return on investment (ROI). While the value of your eCommerce business is based on many factors, potential buyers will look at the risks involved in your business to determine what amount they can pay for your eCommerce business.

To that end, buyers are likely to pay a higher price for an eCommerce business with lower relative risk as opposed to the one with a higher risk involved. What’s more, an eCommerce business with a higher potential of making a profit will also attract a higher price.

How to Prepare Your Ecommerce Website for Sale?

There are many things you can do to prepare your eCommerce business for sale. They include:

Clean Financials

Potential buyers will be interested to see your financial records before giving an offer for your eCommerce business. To increase the likelihood of selling your business, ensure that your financial records are in good order.

Having clean financial records for your eCommerce business will show potential buyers that your business is not just reliable but trustworthy as well.

Update the Theme

You’ll also need to clear your eCommerce website. Among other things, consider removing any outdated templates. While updating your website theme, however, ensure that it gives room for the personality of the brand to shine through.

Organize Inventory

Potential buyers will also want to see the products on your site before making an offer. While you may not want to add products during your transition period, we would advise you to remove the products that are no longer in stock.

Also, to avoid your website looking cluttered, you may want to condense your product categories. You’ll also want to optimize your product images on your eCommerce website. This way, your designs will inspire both your customers and potential buyers.

Staff and Supplier Contracts

Potential buyers will also want to get details about the staff as well as supplies. As such, ensure that you have up-to-date information about staff contracts. Apart from making the business sale process easy, this information will be required, especially in international business models.

Apart from the staff records, you’ll also want to have detailed information about suppliers. In this information, ensure to include the names of the suppliers, contact information, and details of ongoing arrangements.

Timing is Also Important

The time you decide to sell your eCommerce business will also determine the amount you get. If you want to get the most out of your eCommerce business sale, ensure to place your exit strategy in advance. After all, for a business to attract a higher price, it must fulfill some of the things mentioned above. And as you can see, some of these things cannot be achieved overnight.

Categories: Business Ecommerce