Do you have an eCommerce site for sale?
Like anyother business, eCommerce websites can be sold and bought by enterpreneurs. This is just like a restaurant — you can open a new one or you can acquire an existing one.
But the difference in this example is that an established restaurant already has a certain volume of business and clientele that the new restaurantdoes not yet have.
The same thing goes for eCommerce websites. Selling your existing online store that generates earnings is a shortcut that saves buyer’s time and effort instead of starting everything from scratch.
Evaluate Your eCommerce
The first question should be asking yourself is ‘How much is my site worth?’
This answer is not easy to determine because the value may change according to the buyer. But if we need to give indicative numbers, then we can say that an online store is generally sold for a price between 12x and 20x the monthly net profit.
For example, an eCommerce store that generates a net profit of $500/month can be sold for a number between $6,000 and $10,000, depending on a lot of different factors, including the time it takes for management, the ability to increase earnings, the type of market, and longevity of the domain name and its corresponding backlink profile.
To increase your eCommerce value, you need to improve your sales. To do that, consider a product research tool to find winning opportunities.
Once you have decided to sell your online store, it’s time to gather all the traffic data, together with the earnings, the social media accounts and any other information to provide to the buyer.
This process is called ‘due diligence’ and is a mix of science and art.
Normally, to verify your site traffic, you will be asked for access to your Google Analytics account, the standard for web statistics analysis. Buyers don’t trust those who can control statistics directly from the hosting server, which are technically very easy to manipulate.
To verify your earnings, you may be asked for a Skype call or a session with Team Viewer (which allows you to share the screen) so that the buyer can see live on your desktop the earnings, for example, from Adsense or Amazon, and save all screenshots for a subsequent analysis.
Other things the buyer carefully considers are the market, the SEO work on the eCommerce site, the mailing list (if included), the social network accounts, if there is some copyright infringement and if the third party accounts (for example, affiliated sites or AD networks) may be easily transferred to the new owner.
Thisis just an introduction to the vast and important due diligence process and there is even more that needs to be considered when selling an eCommerce store.
Reasons to Sell
From the buyer’spoint of view, it’s indeed a good way to invest their money. I do not know any other (legitimate) investment with a better return. Even if an online store (bought for 20x) is not giving the expected return on investments, for example, three years to recover the initial expense, the return on investment is still 33%! Just compare this with buying a home (2-6% ROI) or investing in a mutual fund (5-15% ROI).
Of course, websites need work and are not ‘passive investment’ like real estate or the stock market. But this often makes them even more interesting, as you have more control over an eCommerce website than a real estate investment or a stock. Bryan O’Neil covers this further in a a very interesting article.
Having considered all this, you should have a valid reason to sell youreCommerce store if it’s generating a solid income. Maybe, you have to clear a debt, or you need the money for your next project, or are even looking to retire altogether. Whatever your reason is, make sure that you have thought it through and it overtakes the profits you are making from your eCommerce store.
How to Sell Your Online Store
There are three main channels for selling eCommerce stores: marketplaces, brokers, and direct contacts.
Marketplaces are websites that connect sellers and buyers. Think of eBay, but with websites instead of products.
There are different sites to consider, but I do recommend Shopify Exchange. You can list your eCommerce for free with a few steps to find a buyer for your online store. Include all your site’s assets, accounts, and information together to transfer your store to the new owner once you find a deal.
Brokers are agents, like realtors, who come in between buyer and seller. The biggest mistake is to think that selling a site via a broker is safer. As with real estate agents, brokers do not inherently much added value and never should replace an accurate online inspection or evaluation before the sale process.
Some brokers include FEinternational (among the most serious and trustworthy), QuietLight (mostly sells high-end sites, but worth a try) and Latonas (a very well-known broker).
As for the last channel, direct contact, I’m talking about approaching a company, an eCommerce investor, or an online entrepreneur to see ifthey are interested in buying your online store.
Thisis the most unpredictable approach, because many times you receive answers with ridiculous offers. However, it may become profitable, if you are lucky enough to find an interested buyer.
In conclusion, think hard on what you are doing, because you wil lnot be able to go back.
Review and double check everything, before signing an agreement. Write a simple document to sign with the buyer details, a list of what’s beingtransferred, and a clause to prevent the buyer from stealing your website, before receiving the agreed amount.
To sell your online store, consider using an escrow service to help with the hand off process between yourself and the buyer (I suggestyou Escrow.com)
Armed with this advice, it’s time to take the sale of your eCommerce store in to your own hands.
Do you own an e Commerce website? Do you want to sell it?
Share your experience with us and leave your comments below.