How Can I Sell My E-Commerce Business?
From aligning values and goals between you and the buyer to managing and tracking your finances thoroughly, here are eight answers to the question, “What are tips for selling my e-commerce business?”
- Choose the Ideal Buyer
- Find the Right M&A Advisor
- Remove Unnecessary Expenses Before the Sale
- Have a Solid Plan for Exiting the Business
- Build a Good Foundation and Consistent Revenue
- Ad Testing Shows Future Growth
- Ensure Your Website is Seamless and Glitch-Free
- Know Your Numbers
Choose the Ideal Buyer
Choosing the ideal buyer is key to a successful sale of your e-commerce business. A smooth and successful transition is more likely when the buyer and seller have aligned values and goals. The ideal buyer will comprehend the seller’s vision for the business and be enthusiastic about continuing its growth and development.
The ideal buyer can also have an accurate valuation of the business, considering its strengths, weaknesses, market standing, and growth potential can lead to a fair price and improved return on investment for the seller.
Find the Right M&A Advisor
When looking to sell your e-commerce business, it is vitally important to find the right M&A advisor. This is someone who will have a wealth of knowledge and experience in the art of selling businesses, one who understands the market you work in and can find the best buyer for your business. For this reason, find an advisor with a proven track record who allows you to get the most value out of your e-commerce business when it is time to sell.
Remove Unnecessary Expenses Before the Sale
One thing that can improve the sale value of an e-commerce business is to remove unnecessary expenses in the months leading up to the sale. This allows you to maximize profits in your bookkeeping records and, therefore, get a better overall valuation.
For example, if you’re paying each month for pieces of software or services, such as consultants or agencies, which aren’t essential for maintaining and growing profits, then removing them from your monthly expenses will make the business leaner and more profitable.
Even saving a few hundred dollars per month in expenses might add four or five figures to the ultimate sale price of your brand because of the way valuations work for online businesses—particularly in e-commerce.
Have a Solid Plan for Exiting the Business
Having an exit plan is essential for selling your e-commerce business successfully. You want to make sure that you’ve thought through all aspects of the sale, including potential buyers, terms and conditions, and a timeline for completing the transaction.
It’s also important to define your goals for exiting, such as when you want to complete the transaction, how much money you want to receive for the business, and what type of ownership structure you prefer. Having a plan in place will help ensure a smooth transition and maximize your return on investment.
Build a Good Foundation and Consistent Revenue
One important tip is to build a solid foundation and show consistent revenue and growth. Potential buyers will want a track record of profitability and a well-thought-out plan for future growth.
Consider diversifying your revenue streams to make your business more resilient and attractive to potential buyers. This might include expanding into new product categories, launching new sales channels, or exploring new marketing strategies.
Be transparent and communicative with potential buyers throughout the sales process. Provide detailed information about your business, answer questions honestly and openly, and respond to any concerns or requests for additional information. This will help build trust and confidence in your business, which can ultimately lead to a successful sale.
Ad Testing Shows Future Growth
When buyers are comparing your business to others on offer, one of their key questions will be, “How much can I scale this e-commerce company?”
We want them to be very confident in their ability to grow your eCommerce business, so you can create some ad campaigns to test. You could test new products, new markets, or just an increase in spending. You want the test to run for a month successfully, but not much longer.
You can then show the results and ROI of these tests, and accompany it with an explanation of why you haven’t fully pursued this opportunity yet, perhaps something like we weren’t scaling as the focus was on ensuring smooth operations to prepare for selling. But we have been preparing and testing some campaigns; these were the results, and all the assets are still sitting paused on the ad platforms.
Ensure Your Website Is Seamless Glitch-Free
The very first thing a potential buyer will evaluate is how good your website is and check out its design and functionality. After all, a website connects an e-commerce business to its customers, and one look at the portal is all you need to judge the standing and strength of the brand.
Yes, the buyer may very well plan to reinvent the site’s look and revamp its functionality after buying. But at the start, every aspect, from the sale price to an upper hand in negotiations, depends on the state of your existing business website.
Know Your Numbers
I often find that sellers who are selling or buying online businesses don’t know their numbers. Metrics like LTV, CAC, profit margins, analytics stats, and more are important to understand. Buyers and sellers need numbers to complete the sale and conduct due diligence.
Manage your finances from day one and track everything so you’ll always know what your numbers are.
CEO, Estrategy Brokers
Submit Your Answer
Would you like to submit an alternate answer to the question, “What is one tip for selling my eCommerce business?”