If you have decided to put your eCommerce business for sale then you must have thought it through well. It cannot be an easy decision but for it to be a fruitful one it needs to be devoid of emotions that are likely to cloud your judgment. If you wish to reap the rewards of your toil and labor, here are some of the key factors that you must consider.
Financial Health of Your eCommerce Business For Sale
Naturally, buyers are looking for a safe bet. The current financial health of your business is a vital consideration for people willing to put their money into it. You can make it easier by organizing all your financial data beforehand. This includes detailed income statements, quarterly or annual sales and revenue figures, profit and loss reports, all outstanding debts, monthly expenses, logistics charges, recent tax filings, and any audit reports, etc. Businesses that are low on debts and high on sales are more likely to fetch better prices in the market.
Operational Performance of Your eCommerce Business For Sale
Having a financially sound business is great, but it also needs to be operationally stable and easily replicable. When a buyer invests their money, apart from a good return on their investment they are also looking at the ease of running the business without your expertise. You can help here by documenting all the salient features and processes of your enterprise. Detailed training manuals, new hire onboarding guides, and standard operating procedures help the new owners get a firm grasp on your operations while ensuring the new staff can quickly understand the nitty-gritty of daily tasks.
You should also gather the key performance indicators (KPIs) for your eCommerce business for sale. These include stats and figures around monthly online traffic, average customer reviews, number of orders, add-to-cart rate, customer acquisition cost, cart abandonment rate, conversion rate, average order value, etc.
Having done the prep work of collecting the relevant data, you must now get a price tag for your business. Many business owners fall into the trap of overvaluing or undervaluing their businesses. While the former leads to a long and stressful process of finding a buyer the latter leads to a direct loss in potential earnings. If this is your first time valuing an eCommerce business for sale then you can turn to professionals to run this process for you.
Do note that a business valuation takes into account several tangible and intangible factors such as the nature and age of the business, financial and operational health, and online presence and brand value.
Listing Your eCommerce Business For Sale
Once you have set a price on your business, you are ready to list it to attract potential buyers. You will find multiple avenues to do so, each with its own merits. A few of the common avenues of putting your eCommerce business for sale are:
Selling directly – Simple and straightforward, selling on your own can be more lucrative than other modes. You can sell directly to people in your professional circle, sell to acquiring platforms, or even to your competition. Listings can be done via digital marketplaces and other online business forums. While you will not incur any overhead expenses in this process, this method can be highly strenuous and requires a high degree of experience. First-time sellers may be better off using the next option.
Sell via brokers – A broker acts as the middle-person in the selling and negotiating stages of the process. Not only can they attract more interested parties, but they also ensure that the legal paperwork is properly concluded and the full payment is made on time. Naturally, they charge for this service. While some brokers operate on a fixed-fee basis, others may charge a percentage of the final amount received in the sale.
Sell to acquirers – Acquirers or direct buyers offer a novel alternative. This medium is equally suited for seasoned entrepreneurs and those who have put their eCommerce business for sale for the first time. Usually, these brands have a vast eCommerce ecosystem of their own. With highly evolved practices and scalable infrastructure, they are able to easily assimilate your business into their own platform. The benefits include less personal stress in listing your eCommerce business for sale, proper business valuation with a fair market value assigned to your enterprise, quick and mutually beneficial negotiations, and a convenient transfer of ownership. Furthermore, you don’t end up paying additional costs such as a brokerage fee.
Times have changed lately and now buyers are always on the lookout for an eCommerce business for sale that is financially stable and has been operational for a while. They understand that buying a well-established business can be far more lucrative than setting up one from scratch. If you put in the effort to lay the preparatory groundwork, gather your business metrics, carefully identify your selling options, and patiently navigate the negotiations process, you can expect to find your pot of gold in the end.