How to sell an online shop (and get the largest possible amount of money)

After so many hours of hard work and so many restless nights working on your business, haven’t you ever thought about selling your online shop? Maybe the idea has never crossed your mind and you believe that even the thought itself is crazy. However, the truth is that there might be a time in which you actually may be interested, haven’t you ever thought of retiring? Whether you have thought about selling your e-commerce or not, you should be interested in this article. Today we are going to shed some light on a very important topic: the market value of your business. Can you really say that you are not interested? 🙂 

When is the ideal time to sell?

You are right, you’ve worked too much on your business as to go crazy and sell it just because. The truth is, throughout your life you can come across different situations in which you may want to sell. Let’s see what they are:

• Retirement
• Lack of motivation
• Creation of a new project
• A big offer

We all develop a strong attachment to our business, but that doesn’t take away from the fact that putting up the “for sale” sign at the right time could be the right thing to do. In terms of the right time in your business’ life at which it would be more attractive to buyers, without a doubt it has to be the moment when it is going through a period of growth. No one is going to be interested in your e-commerce when it has reached its highest peak. This means that the company has nowhere else to go and even if it’s stable for a while, it will start the downward slope sooner or later.

The most difficult question: what’s my business worth?

No one will ever be able to quantify the amount of time that you have put into making your business grow. Your efforts cannot be labeled with only a number, but your business can be. These are the 4 points you must check to determine the value of your shop:

1. Be careful with the sentimental value

Your business may be like a child to you, which can lead to your thinking about labeling it with an unrealistic price. It is always a good idea to be advised by someone with an objective view.

2. The investment is not an added value

All the money that you invested in design , SEO or contents doesn’t add more value to your shop. Do not start from “I spent x thousands euros”

3. Multiple of your earnings

What actually determines your business’ value is the amount of earnings that it can provide. The price is normally calculated by multiplying those earnings by X. Imagine that you’ve earned €500,000 this year and that your business is growing. The buyer may even pay 4 times €500,000. However, if the buyer has his doubts, the number may be lower: he or she may offer just 2 times €500,000.

4. The risk

The risk is what determines the multiple number. Some risk factors may be:

• The business depends too much on you.
• It doesn’t have a great growth path.
• All income depends on just one client.

Now that you now the price, it’s time to get ready for the sale, for the negotiation.

Strategy: how to get ready to sell your online shop

The reality is that while you want to get the best price possible, the buyer will try to pay the minimum. This means that you will have to deal with negotiation, so you need a strategy.

1. Present all the data

Before showing up for the negotiation, you must do your homework. Whenever you suggest a price, you need to justify what they are based on. And you can do that by showing these kinds of data:

• The number of sales
• The profit margin
• Sales stability
• Growth patterns
• Percentage of returns
• Market positioning of your brand
• Number of subscribers

The key is to quantify your business earnings to your buyer.

2. Give added value to your e-commerce

Besides these figures, there are other kinds of data that will help you raise your shop’s value. For example:

• Loyal clients = recurring sales
• Data about SEO positioning of keywords and their potential to increase positioning
• Growth of mentions within your sector
• New product lines and new services to be analyzed

These figures will show your buyer that your brand is not only a stable brand (lower risk), but also that it has a wide margin to develop.

What about you? Have you ever thought about selling your online shop?

If you are thinking about selling your e-commerce, or if you have already sold it, tell us about it! What were the reasons that motivated you to do so? How did you determine the price? Were you able to sell it in the end? We are waiting for your comments!