If you have decided to sell your e-commerce business, be prepared to accept that selling an online store is different from a brick-and-mortar store.
You might find it a bit easier to sell an online store, but additional challenges will be.
Usually, people sell their online store due to many reasons.
People decide to sell their e-commerce shop for various reasons. For example, perhaps you have reached a specific point of growth, and you need to invest and expand to continue running the shop on your own. Or, you might want to use the profit from the sale to invest in a new business.
There can be many reasons for selling your e-commerce store, despite many impactful ideas to grow your online store. But, even then, you can feel the need to sell your eCommerce store to someone else at some point.
Regardless of the reason for your decision to sell, you should prepare for the sale first. And the process of selling an online store remains the same.
We have outlined a series of steps to ease the selling process. The steps will guide you through each stage of the selling process, from preparing for the sale to completing the sale.
Here, we go:
#1. Prepare Your Site for the Sale
When you start preparing to sell your online store, take a moment to put yourself in the shoes of a prospective buyer.
What will a prospective buyer do at first? He will visit your e-commerce website. So, ensure that he gets a good impression.
As such, you need to ensure that the site appeals to prospective buyers, who should not see any disadvantage after they acquire it.
Issues such as clutter, navigation problems, and poor UX will lead to buyers seeing those as extra work they need to do after the acquisition. Therefore, they might not buy the site.
Another way of thinking is to consider your site as a house for sale. Is it not easier to sell a house that is turnkey? Yes, it is.
You will find a house much easier to sell if the kitchen is updated, appliances are new, and plumbing and electricals are functioning correctly. A buyer will, however, not mind painting the walls.
The analogy applies to the sale of your e-commerce site. Prospective buyers will value your site more if it does not require much work on the back end.
The site architecture also plays a crucial role. Ensure your products should not be more than two clicks away from the homepage.
Ensure that you update your site’s theme, clean up the design, and make the navigation seamless. And keep everything simple. So, if the new owner wants to make some changes, like updating the logo, ensure that he can do that with ease.
#2. Update the Inventory
You must have come across e-commerce websites running out of stock. Unfortunately, it is a common occurrence. But, do not undermine the need for updating your inventory while you prepare your e-commerce website for sale.
If your site has products marked ‘out of stock’ on many pages, it will be unappealing to your prospective buyers.
It is a good idea to remove some products from your site. If you reduce the number of product categories, it makes sense for prospective buyers to consider your website.
For example, if your site has 25 or 30 categories of products, it can be enormous for your prospective buyers to take on. Therefore, it is good to include five to ten categories that can be easier to manage.
Moreover, do not fail to update and optimize the product images for items on your site. Finally, ensure the descriptions are well-written.
You can play a trick. What you can do is sell some of your old inventory. It will help you to clean up things, get organized, and sell out your old stock.
#3. Organize Your Financials
You might be an excellent online entrepreneur, but you might not be good at accounts or bookkeeping. Yet, you might handle all financial transactions related to your e-commerce business.
Maybe you manage your finances manually with a spreadsheet or small business accounting software, like QuickBooks.
But, you should bring a professional to manage your finances before you start your selling process. There is no need to hire a new employee. Instead, you can outsource it to a third-party accountant or bookkeeper.
Bear in mind that there will be a lot of scrutiny on your finances during the sales process. Everyone–prospective buyers, accountants, appraisers, lenders, advisors, and lawyers– will be going through your financial statements.
Therefore, you should keep ready at least the following financial statements:
- Last three years of tax returns
- Income statement
- Cash flow statement
- Balance sheet
If you make a simple mistake in your finances, it is insufficient to derail your sales process. Prospective buyers might interpret your mistakes as your trick to deceive them. Besides, if there is a lack of accuracy or attention to detail, they can emerge as problems in other areas of the sale.
With clean and accurate financial statements, you can draw the appeal of prospective buyers.
#4.Organize Customer Data
It is essential to organize your customer data before you begin the selling process. Prospective buyers will find your exciting customer list extremely valuable. It can also be a good selling point for you.
Once a buyer acquires your online store, he might want to kickstart marketing campaigns and promotions right away. So, your customer list will help as it is much easier to sell to existing customers and contacts.
As such, do not fail to ensure that your customer list is accurate, updated, and in order. Also, you should remove duplicates and inactive contacts and provide proper customer segmentation.
#5. Drive Sales and Traffic
As you know, sales of an e-commerce business cannot happen overnight. It takes time. But do not allow the idea of selling your website to distract your business. As of now, you are still the business owner. Since you benefit from the profits of your business, you should keep things running as usual.
Therefore, continue finding ways to boost your sales revenue and keep driving traffic to your site. Also, ensure that you make your website SEO-optimized.
Moreover, an optimized site will make your business more valuable to potential buyers.
#6. Consult With a Valuation Expert
If you believe that you know how much your e-commerce business is worth, you might be wrong, as many business owners do not know it.
You can pull out a few numbers from thin air. But do not put your profitability at risk. In such a case, you will risk listing the website too high or too low.
As such, hire a third-party appraiser, which can value your website at the right amount. But, the number may not be the final sale price. You can develop a fair idea with the valuation to decide the final price.
The common factors that account for the valuation of an e-commerce business are:
- Age of business
- Customer service
- Logistics and fulfillment
- Supplier relationships
- Intellectual property
- Patents and trademarks
It is crucial to consult with a valuation expert because he can appraise your business. The appraisal will help you to understand how he determined the number for your business. Also, the appraisal report can add more credibility to your business apart from assisting you to get more profit from the sale.
With the boom in the e-commerce business, many people may prefer entering into the segment. And buying an existing e-commerce site is more appealing than building one from scratch.
You can gain a good profit by selling your e-commerce website. All you need to do is, follow the step-by-step process outlined in this article.