The booming eCommerce industry has laid to rest all apprehensions of it being just another bubble. With the industry estimated to soar past USD 55 Trillion by the end of 2027, it is evident that eCommerce is here to not just stay but to thrive. Shopify is one of the most popular digital platforms, globally, that allows entrepreneurs to run their own online stores and sell directly to customers. As per the platform’s own statement, over USD 496 Billion have been made, collectively, through sales by people using Shopify. It is no wonder then, that Shopify stores are in high demand and buyers are always on the lookout to grab a Shopify business for sale. We have put together a guide that will be helpful to both, new buyers and sellers alike.
If you’re thinking of putting your Shopify business for sale, then here are a few things you should consider/do beforehand.
- Compile Your Financial Data: Financial housekeeping is an important aspect before commencing the selling process. You should aim to compile all the financial data relevant to your business. This should include profit and loss statements, recent tax returns filings, monthly/quarterly/annual earnings, overall sales figures, payable amounts (like salaries, suppliers), details of any outstanding loans and liabilities, and so on.
- Gather Your Business Performance Indicators: Just like financial health, knowing the operational health of your business is equally important. Metrics like order value, sales revenue, repeat customers, returns and exchanges, etc are easily available through Shopify and should be gathered and assessed carefully.
- Optimize Post assessment, if you find any prominent gaps or areas of improvement, it is a good idea to address them proactively. Improving upon these metrics will not only streamline and optimize your current operations, it will also help you achieve a better market valuation. This, in turn, will lead to better returns.
- Get a Professional Valuation Done: Before actually putting your Shopify business for sale, it is a good idea to understand its worth. While there are many aspects of the business that are intangible and immeasurable, having a ballpark figure in your mind will help you run the negotiation process more effectively. A professional business valuation will also help you establish a walkway price – the least amount that you can consider settling for, anything lower and you walk away.
- Identify Your Medium for Listing: Finally, you will need to identify the right medium to sell your business to or through. There are different ways this can be achieved and you need to identify which one suits you the best. You may consider:
- Selling directly on your own – While direct and effective, it is not the most recommended mode for new sellers, as the selling process can be a tiresome one and requires expert guidance through its different stages.
- Selling via brokers – Professional consultants and brokers can help ease you in the process with minimum fuss. Their years of experience will bode well for you and make for a smooth selling process. You will need to pay a commission or brokerage for their services, though.
- Selling to acquirers – You can consider reaching out to an acquiring company for your Shopify business for sale. Their streamlined acquisition process can help you achieve the maximum return for your business without being taxing on your time and resources.
On the other hand, if you’re a buyer looking for a Shopify business for sale, then here are the aspects that will help you in the journey.
- Examine Business Health: Naturally, since you will be putting your own capital into the purchase, you need to ensure it is healthy and a viable option. Ask to examine all financial and operational data. If you are not an expert in this field, then hire the services of an expert who can crunch the numbers for you and helps you see how sustainable the health of the business is.
- Find Out the Reasons for Sale: It is not just out of curiosity but also the business acumen to understand the underlying reasons for the seller to put their Shopify business for sale. The market can be a distrustful place, and with reason. If you don’t feel convinced about the seller’s motives, either investigate further or feel free to walk away from the proceedings.
- Sift Through the Faff: It is easy to get carried away with attractive presentations and tall claims of future gains. As a new buyer, you should be focussing on pure facts and figures. The current health and performance of the business are of paramount importance. So is the recent historical trend. Base your decision on quantifiable data points.
- Understand Cost and Ease of Running Operations: It is equally noteworthy to understand the current cost of running the business. Great sales lose their significance if the cost of achieving them is high. Moreover, since you will be running the show upon the completion of the sale check to see how streamlined the operations if everything is carefully documented, are the suppliers well aligned if logistics are in place, and so on. Through this assessment, you should try to identify if more capital will need to be pumped into this business or if is it in a good shape to run as-is after the change in ownership.