As millions of shoppers shift to buying products online, eCommerce sales continue soaring, with the industry now bringing in trillions in revenue globally. Selling products online has become a lucrative way to earn money, assuming the owner has chosen the right platform for matching popular products with marketing directed at their target audience.
Investors today are eagerly looking for successful eCommerce companies for sale. It’s much easier for a buyer to acquire an online business that is already profitable and has a solid marketing plan and loyal customer base than to launch an entirely new business on their own and then take years to make it profitable. Roughly 20% of small businesses fail within their first year, about 50% fail within five years, and around 65% fail by their 10th year – challenging statistics for a new business owner.
That’s why if an eCommerce site is already profitable and made available for sale, it will be highly attractive to prospective buyers.
The definition of an online business marketplace is a shop that operates primarily online and has a strong customer base. That emphasizes the importance of choosing the right platform. Entrepreneurs who operate online shops have found great success on popular platforms such as Amazon, eBay, Facebook Marketplace, and Etsy, along with operating their own website on platforms such as Shopify. Many shop owners have multiple sales platforms. That can often make their shop more appealing to investors when they’re ready to sell.
If you operate a profitable eCommerce business and are ready to sell it, congratulations. People sell their eCommerce businesses every day, and for lots of reasons, including retirement, a change in personal circumstances, using the proceeds to start a new company, or shifting careers. Depending on the nature of your business, selling can be a good opportunity. The first question is, where to sell an internet business.
There are plenty of options, but which one will maximize your chances of a successful sale to the right buyer, and at top dollar for the company you built up? And do you know how to prepare to sell your online business?
The preparation that must go into selling a business is not a simple process. The process is far more complex than selling popular items such as apparel or beauty care products. Selling your business means getting your documents, paperwork, and finances in order, scaling the company beforehand, and ensuring your marketing plan will be impressive to a new buyer.
The more work you put into the preparations, the easier it will be to sell your business and, ultimately, get a good price for it.
That’s why the best way to prepare for the sale of your eCommerce company is to consult first with a professional business broker. Business brokers are financial professionals who assist sellers with getting the right valuation for their business, getting their financial records in order, marketing the business, pre-qualifying buyers, overseeing negotiations, and handling due diligence – all major steps in this process.
They also work with buyers to help them find businesses for sale that match their long-term goals and interests.
To ensure a smooth sale, brokers can work with you to establish effective methods that will make your business more appealing to prospective buyers. That will include:
A significant advantage to working with a professional business broker is that they maintain a website that contains a directory of eCommerce businesses for sale. The directory on the Website Closers site is checked daily by buyers and investors eager to find profitable online businesses for sale, and the directory can be searched by industry, price, size, and other key factors.
A good business broker will also ensure your company is listed on other sites known to generate sales for eCommerce companies. Here is an overview of popular online business for sale platforms:
These platforms are known for working well for niche-specific marketplaces, which is why brokers often are eager to list their clients’ businesses on them.
Selling a business through a broker is a smart move. The broker will start by evaluating your business and then using a proven methodology to get it the proper market-based valuation. That will be crucial during the sales process. How to work with a business broker is all about trusting their skills to help steer your business to a profitable sale.
There are a lot of benefits to working with a business broker. Their skills and expertise in the sale of businesses can’t be underestimated.
The services brokers provide will include:
Having an experienced broker is invaluable. You’re tapping into their knowledge of this process. The best brokers have helped to sell businesses in multiple industries.
Another possibility that some sellers consider is website flipping. So, what is website flipping?
Website flipping is the process of buying an existing website with the intention of selling it for a profit. This buyer acquires full or partial ownership of a website, makes improvements to enhance its value, and then resells it at a higher price – similar to real estate flipping.
The goal in both instances is to “buy low and sell high.” But does it work? What are the pros and cons of website flipping?
Some of the benefits include:
The disadvantages will include:
That’s why working with a professional business broker can be a smarter move than attempting to sell the company on your own through website flipping. A business broker will typically begin by thoroughly evaluating your business, including your financial records, SDE earnings, profit margins, customer base, and arrangements with suppliers.
This enables the broker to determine the proper valuation for your business in today’s market and then settle on the right price for your business – a price tag that is not too hot (and scares away prospective buyers) or too cold (by undervaluing it).
For a lot of eCommerce business owners looking to sell their company, business brokers have become absolute lifesavers. A qualified business broker has the skill and knowledge to successfully guide the sale of your business.
Business brokers play a very important role in the buying and selling of businesses, including eCommerce companies and other online businesses. Here is a recap of the Business Broker Process, which includes:
Engaging a business broker is a smart move. The role they play in the sale of a business is a crucial one.
An experienced and professional business broker, like the ones at Website Closers, can simplify the selling process and enhance your chances of a successful transaction.
Online marketplaces such as Flippa, Empire Flippers, BizBuySell and Motion Invest are popular sites for bringing together buyers and sellers of eCommerce businesses. If you work with a brokerage such as Website Closers, they should also have a directory of online businesses for sale and a database of prospective buyers to tap into.
This is usually one of the first questions our clients ask us. And the answer is – it depends. The larger the deal, the longer it generally takes since there can be 20+ people working on larger Middle Market Transactions. But on average, for most SMB & Lower Middle Market deals, we advise our clients to expect a window of 30-120 days to close the business. Additionally, how long a business takes to close trends with how aggressive our client would like to be at market; the more aggressive we get, the longer it usually takes.
When drafting a business sale agreement, crucial components to protect both parties’ interests should include basic information of the parties involved, a description of business assets and liabilities, a list of any liabilities the buyer will assume, such as outstanding debts, and the purchase price and payment terms.
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