Selling your Ecommerce Business

 

You have put your time, effort, and money into your ecommerce business.  Despite all that hard work, an opportunity to sell private investment trust might come up that you just can’t refuse. You want to be an informed seller.  There are several conditions to consider when selling a digital enterprise.  We will cover them all in order to help you get the highest possible price when the time comes to sell.

Let’s get down to business.

The worth of your ecommerce business

There are many factors that must be considered when calculating the value of an ecommerce business.  Some are affected by external elements, such as the price buyers are willing to pay, the state of the market at time of sale, and your particular type of business. Nevertheless, some common variables to consider include:

Market position

Growth potential

Sales

Profits

Documented systems and processes for operations

New sales drivers

Sustainability

New customer channels and their breakdown

The image below represents the results of our analysis of 245 ecommerce business sales between 2010 and 2014. Those sales resulted in an approximately $117 million total transaction value.

The 2.51 average multiple is by far the most important number in this graphic.  It means that the average business sold for 2.51 times its annual profit. For example; if a business had $475,000 in profit in 2012, then on average, that business sold for roughly $1.19m [$475,000 x 2.51]

The relative price of businesses

Buyers are generally interested in one ratio: the return on investment versus the risk incurred. The higher the risk, the higher the asking price, and vice versa. The following ingredients diminish a buyer’s risk of future failure:

Traffic that is growing or at least stable, from several different sources

A long history of traffic stats from a reputable …