How To Sell Your Shopify Store?
Establishing a Shopify store is a challenge. It's incredibly rewarding when you witness something you created from scratch grow into a successful business.
However, there will come a time when you are ready to make a change. It might be to go after another business idea, spend time with family, or pursue a hobby you've always wanted to pursue.
You may have to make the difficult decision to sell your Shopify store in order to free up funds for future projects or personal interests. This article will show you everything you need to know about how to sell Shopify store.
What’s the value of my Shopify store?
Everyone aspires to have their concept become the next big thing. The value of their companies is often overestimated by business owners due to this.
The truth is that the amount of time and money you've put into building your business doesn't define its value. The main factors influencing this are the rate of growth, current operations, and profitability.
A fast-growing company with a track record of expansion and excellent margins will be valued higher than a company that is in decline or has a recent track record, even though future growth is unpredictable and frequently underestimated by purchasers.
Calculate your seller’s discretionary earnings (SDE)
Your seller's discretionary earnings must first be calculated in order to assess the worth of your Shopify store. The SDE typically indicates the revenue generated by your company over a 12-month period to a customer.
Provide twelve months of trustworthy data that indicates your company's real status in order to give prospective buyers a thorough view of your company's history.
By dividing your annual net profit by the total number of years your company has produced net profit, you may multiply your SDE to start figuring out a business valuation. This calculation looks like this:
Annual SDE x Market Multiple = Shopify Store Value
While this is how most purchasers and marketplaces evaluate Shopify businesses, it has flaws. The SDE and market multiple methods are simple formula that ignores many important variables such as the strength of your customers, their purchasing behavior, and the efficiency of your marketing engine, among others.
Business Age
The older your company is, the more it has endured the test of time.
A young business may be showing significant growth, but if it hasn't been constructed to resist the external forces of the business market, a Google update, Amazon ban, or the arrival of competition in the market might knock that business to the ground. This explains why older businesses are more valuable. They have overcome these obstacles and remain profitable.
Diversity
Diversifying your revenue and traffic sources is one means of countering the forces at work against your company.
If you rely on just a few products from a few providers for 100% of your business revenue, you will lose 100% of your revenue if those products are interrupted or the suppliers have logistical issues.
Correspondingly, if all of your traffic comes from Google organic results, a site update could lead to the loss of a substantial portion of your store traffic. This is why having multiple revenue and traffic sources is a valuation element for your company.
Brand Stability
Selling products and earning a great deal of money is just the tip of the iceberg. With a well-established brand in your niche, numerous positive reviews, a strong social media appearance, high rankings for hot keywords, and a unique and trending product, you will be able to sell for a higher cost.
Assets owned
This includes everything financial associated with your company.
Contracts and relationships with suppliers are prime examples of this, as they demonstrate the strength of your line of products. Email lists, trademarks, employee contracts, and profiles on social media are some other examples.
The next step is to find prospective buyers once you have a pricing figure in mind, which may change after your business has been thoroughly vetted and listed on a marketplace.
To be able to sell a Shopify store, the condition is that you have to own it before. Sign up now and start building value for your Shopify store to maximize your profits.
Best Places to Sell Shopify Store
1. Private Sale
There are a number of online organizations and communities where business owners can sell Shopify store, and potential purchasers in the communities can then get in touch with the owner directly.
The "out in the wild" method exposes you to dangerous individuals who will want to take advantage of you. A potential buyer could be a scam artist attempting to steal your money to buy your company.
There are intelligent customers out there who are excellent negotiators, even if they are not scammers. Inexperienced sellers frequently overprice their businesses in private sales because they understandably feel emotionally attached to them and believe they are worth far more than they actually are. This is interpreted by an experienced buyer as a sign of inexperience, and the buyer out-negotiates the seller to force them to sell at a price lower than the company is really valuable.
For this route, you'd need reliable buyer contacts as well as lawyers who can guarantee that the sale of the business to the prospective buyer is legal and that both parties fulfill the terms of the contract.
2. Marketplaces
Private online organizations and communities are a step down from online business markets. They are often tightly controlled to prevent any unethical behavior.
Having said that, the sale's security will be your sole responsibility. Like with a private sale, you'll need to ensure that everything is done legally and properly. Apart from the rules that are often present in a marketplace, the primary distinction between a private sale and selling on one is that using a marketplace is a more efficient approach to attracting customers to your business.
On a platform that consumers trust, you can post it for sale to thousands of buyers, some of whom will have previously bought businesses on the marketplace. You must create your own transaction flow when you sell individually.
If they have the capacity, some markets might even provide some expert assistance. The following markets are worth looking into to sell Shopify store:
2.1. Empire Flippers
Empire Flippers is the world's largest cataloged online business marketplace and the leading M&A brokerage.
It's also simple to list an online shop on EmpireFlipper: simply enter a few details about your site, such as its URL, income estimates annually during typical business hours (Online Business Hours), monthly income after fees (Monthly Revenue), and how much time it gets you each day to preserve the website (Site Maintenance Time).
2.2. Flippa
Flippa is an ideal online marketplace for you to sell Shopify store. It boasts a large buyer base and various flexible selling options, just like Empire Flipper.
You should submit a minimum 12-month financial history (sales and costs) as well as important operational information when you sell Shopify store on Flippa. Building an excellent listing only takes about 45 minutes to complete.
3. Business Broker
This is the most secure and presumably effective way to sell your Shopify store.
A broker is an individual or business with connections to buyers. They will put you in touch with their buyer contacts if they believe your company fits the profile of the kind of company they are looking for.
A broker serves as a go-between for you and the potential buyer. As opposed to a broker with a marketplace that is open to numerous purchasers, an individual broker may have deeper ties to their buyer pool.
Due to the fact that certain brokers sell those business models more frequently than others, they tend to be more adapted to particular company models. For instance, as a broker, FE International sells a lot of SaaS companies, thus they have contacts with both SaaS owners and buyers who buy SaaS companies.
The drawback to utilizing a broker is that they bill for their services, typically as a percentage of the business's sale price. Although a reputable broker has quality relationships and can utilize their experience to help you get the best sale price, we would contend that using a broker will still result in you making more money than selling privately and for no commission.
How to Increase Your Shopify Store’s Value?
Several things you can do to improve curb appeal and raise the asking price of your store, even if its sales, traffic, and track record will ultimately determine its major value. Consider these instances:
UI update
For a physical store, updating your UI is like fresh paint and polish. Consider making any adjustments you've been meaning to but haven't had a chance to before the sale.
The first impression can be greatly enhanced by an improved user interface (and even the sale price).
Intuitive
Your user interface should be as simple as possible. You want prospective buyers to be able to easily navigate your website. This will not only provide them with a better experience and allow them to find what they are looking for, but it will also demonstrate that the site's quality is appropriate for users.
Mobile-friendly
If an eCommerce website is not mobile-friendly, this is a huge red flag. What was once a convenient perk has now become an unquestionable necessity. If your Shopify store isn't mobile-friendly in every way, it's time to make changes.
Process analysis and improvement
Prior to a sale, it is worthwhile to make any upgrades or fix any problems. The value of your Shopify store can be increased by keeping everything current and optimized.
Verify your statistics, audit your SEO, test your links and menus, clean up your email lists, and do whatever else a potential buyer might want to evaluate before making an offer.
While useful solutions to your business before handing it over to someone else may seem like a waste of time, doing so can increase the price of your sale.
Organize your finances
Calculating your store's SDE, profit, and other finances is simple. You must also be able to back up your figures with clean, easy-to-follow books before deciding to sell Shopify store.
Buyers will not simply take your word for it when you tell them how much your business is valued. They may also inherit any loans or financial commitments connected with your business. They would want proof of your finances to make sure they are making an informed purchase and that the numbers match your claims.
Analyze and update your terms of service
Your terms of service are crucial for safeguarding your company against dishonest clients and needless liability. You might not have ever experienced any problems with that kind of thing, but a buyer will undoubtedly pay greater attention than anybody else ever has.
A buyer could be reluctant to proceed and expose themselves to potential liability if your terms of service are deficient or filled with mistakes.
Prepare employment contracts
If you use contractors who are critical to the daily operation of your Shopify store, make sure those contracts are accurate and ready for the new owner. Similarly, if you intend to continue working for the company after it is sold, have a contract drafted outlining the terms of that agreement. All parties will benefit from a smooth transition.
Conclusion
It takes time to prepare your business and find a buyer. This guide will outline your choices, but ultimately it is your decision as to what is best for your Shopify business.
You should think about defining a good price and discovering a dedicated buyer to continue the trajectory of your brand.
The question “How can I sell my Shopify store?” could be the greatest chance that brings profit to your business. You could start a new business, devote time to a hobby, or take a break before your next act, thus beginning a new chapter.
