As an e-commerce business owner, you have likely noticed things run differently than in a traditional, brick-and-mortar organization. Lower overhead costs often mean increased profits, which the e-commerce sector has demonstrated with its substantial growth in recent years. However, you may wish to move on to a new opportunity or new field altogether, which means you want to sell your e-commerce business as painlessly as possible. Read on for four tips for selling an e-commerce business profitably and seamlessly.
1. Know the Virtual Landscape
E-commerce is a rapidly expanding way to do business, with over one-fifth of worldwide sales estimated to take place online in 2023. With that kind of earnings potential, you may expect it to be a seller’s market with buyers lined up to take advantage of e-commerce popularity. However, just because the iron is hot does not always mean it is the right time to strike—lending rates, product supply availability, interest from the right buyers, and many other aspects can also substantially impact the right time to sell.
A professional valuation will provide vital insight into where your business fits in the broader industry and global e-commerce market. To conduct a valuation, a broker or M&A advisor will examine your e-commerce business’s financial documents, such as your balance sheet and tax records, to determine the company’s book value, sale value, enterprise value, or other measures of worth. Since these values all mean different things to your company, an advisor or broker will use their expertise to determine the most appropriate figures to use in negotiations.
2. Prepare the Website
Prospective buyers will want to see a clean, well-run website before investing. Before listing your business for sale, check the site for operating errors, design flaws, and other user experience (UX) issues or limitations. Your website should be easy to navigate and have your products featured prominently, with purchase options clearly defined. If you have not updated your e-commerce site in several years, consider a professional redesign to increase your business’s curb appeal.
You should also ensure your inventory is up-to-date and everything appears accurately in your online store. Consider streamlining navigation by reducing the number of product categories your site features. Each item should also have a photo and a working purchase button. With a smoothly running website, you may alleviate buyers’ concerns that they will incur additional expenses after the sale.
3. Secure a Professional M&A Advisor
From the initial valuation inquiry through closing, a good M&A advisor or broker simplifies the process of selling an e-commerce business. Professional advisors and brokers typically have networks of qualified buyers to whom they advertise companies for sale. At Viking, in addition to our existing vetted buyer pool, we screen all newly interested buyers to ensure they are qualified, financially capable, and legally permitted to purchase the company. We coordinate and guide you through the entire selling process, and our advisors also help you develop an exit plan that creates a smooth transition for your business and employees.
As with any business, strict confidentiality is critical when selling an e-commerce business. For example, letting certain information become public can jeopardize the process, possibly preventing the sale altogether. An experienced M&A advisor will understand why and how to prevent sensitive information from emerging where it should not.
Look for a broker with a strong record of well-negotiated and profitable sales. For example, Viking Mergers and Acquisitions has sold over 800 businesses since 1996 for an average of 96% of the asking price. Our sales success rate is also three times the industry average, so you can feel confident that your e-commerce business will get the care it deserves.
4. Optimize the Business & the Deal
An experienced M&A advisor or broker can advise you on reducing expenses or performing other tasks to increase the business’s value and appeal to buyers. (For example, consider organizing and cleaning up customer lists to be included in the sale.)
Additionally, once the buyer has completed due diligence, you will need financial and legal advisors to complete and file the necessary paperwork. (Viking has recommendations for all of these services.) Your advisory team serves to help protect you from liabilities and set you up for a seamless transition. While a quick sale is never guaranteed, working with an M&A broker typically results in a shorter time to closing.
Viking Mergers & Acquisitions has connected business owners to qualified buyers for nearly 30 years. In that time, we have helped hundreds of entrepreneurs secure fair prices for the businesses they have poured their time and effort into growing. If you are considering selling an e-commerce business, it is best to start preparing early. Fill out this form for a free, no-obligation valuation.
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