It’s no doubt that creating a successful eCommerce business involves sweat, blood, and countless hours of hard work. As such, it’s only fair that you get the maximum value when the time to sell your website comes.
But selling an online business is not a walk in the park. From valuing your business to getting potential buyers, the process can sometimes take a toll on you.
Every business is unique and different things come into play when valuing an eCommerce store. This and other things make knowing the real value of your business an uphill task.
This doesn’t to be the case, though. Knowing what potential buyers are looking for when buying an online business and how those factors affect the value of your online store can be helpful.
One thing is clear. No one would be interested in buying your business if it will not bring them money. Yes, potential buyers are more interested in making a profit than anything else. As such, you can get a rough idea of the value of your business if you look at your website from a buyer perspective.
Here are some of the questions that potential buyers might have about your online business:
- Annual sales and profits
- Sales drives
- Growth trends
- Ways to Acquire clients
- The cost of acquiring clients
- Position in the market
- Long-term business running processes
Having answers to these questions before you start the process to sell eCommerce website is critical.
Determining the Value of Your E-Commerce Business
As earlier stated, several factors come into play when determining the value of your online business. Among other things, potential buyers will want to know how long it will take to get their money back, the cost of marketing, revenue associated with each product, and the cost of running the business.
In most cases, the value of a successful eCommerce business will be 2-3 times the value of your annual sales. While this can turn to a significant amount for online stores that generate thousands of dollars annually, it is nothing compared to the value attached to offline businesses.
For instance, the approximate value of Facebook is about $100 billion. Shocking, right? However, it is crucial to understand that this figure doesn’t reflect their current website earning.
The $100 billion value reflects their long-term earning projections, which you can apply to your website as well.
Once you’ve determined your asking price, now you can head to the trickiest part – finding buyers.
To start with, consider searching for a buyer within your industry. Make a list of retail outlets that deal with the same products as you. Use your networks to find their contact details and email them to let them know that you’re selling your eCommerce store.
This tactic works because you’re contacting people who already understand your industry and are targeting the same marketing as your business.
If you don’t succeed to find a potential buyer with the industry, you can go ahead and search outside the industry. After all, most successful entrepreneurs will be happy to acquire existing and successful eCommerce businesses instead of building one from scratch.
However, this will take time as you will be dealing with people with no prior knowledge in the industry. It shouldn’t be hard, though if you have financial details to back up your claims.
Check Other Successful Website Sales Too
One of the best ways to succeed in life is by researching some of the successful people in a given industry. This is also true when it comes to digital space and especially when selling an eCommerce business.
You can gain a lot by looking at entrepreneurs who have sold their websites successfully in the past. How valuation tools did they use, how did they find buyers, did they hire brokers? Leverage on the information you get to market and sell your business at a top dollar.
Closing the Deal
If your business is profitable and you use the right channels for marketing it, you’ll eventually find someone interested in buying it. This will mark the start of negotiations.
As with any other sale, many factors will come into play during negotiations, including the state of urgency.
If you’re in a hurry to sell your online store, the buyer will carry the day. The opposite can happen if the buyer is eager to acquire the business.
The best thing is to have a price in mind and stick to it. If your website is profitable or seems promising, you’ll surely find a buyer who fits the bill.
Finally, when you get a willing buyer, ensure to have a well-thought payment plan. For instance, you can ask for an upfront fee and get the remaining amount after you transfer the ownership. Also, ensure to have a formal written sale agreement.