Whether you’re looking to cash in on your hard work or move on to your next big venture, Selling your Shopify store is not an easy task. This guide will walk you through everything you need to know about how to put your Shopify store on sale and get the best price out of it. A good exit strategy with planning will solve most of your problems for now and in the future!
Why Do You Want To Sell Your Shopify Store?
Before moving to the nitty-gritty of the exit plan, you need to ask yourself first: Why are you selling your store? We understand that this choice is more than just a business transaction; it’s a life-changing move. Here are 2 reasons entrepreneurs give for this decision: they want to get immediate profits for personal use or start something new, or they are tired of the existing business.
Some people just want to say goodbye to inventory management, urgent supplier calls, and customer service headaches. In this case, we advise that you need to have a good plan of how you are going to use the instant cash you get out of your business. Having that figured out will save you any trouble in the future.
Maybe you bought the store before only to sell it later. That’s called website flipping, which is an interesting way to make money if you don’t know.
How Much Can You Get From Your Shopify Store?
The value of your Shopify store depends on several factors:
- Revenue, Profitability, and Conversion rates
- Traffic and Customer Base
- Brand Strength, Social Following, and Intellectual Property
- Operational Efficiency
- Diversity of sales channels
- Market Position and Niche
Remember, a store with consistent growth, healthy margins, and a strong brand presence is likely to fetch a higher price.
How Long Will It Take to Sell?
The time to sell a Shopify store can vary. It usually takes 3-12 months to sell your Shopify store. This involves the time to prepare the store for sale, list it on a platform, negotiate with the buyer, and actual transfer of ownership. It is also not advisable to hurry the process as it will affect the sale price you might from your years of hard work.
However, contrary to conventional wisdom, waiting for better-performing months isn’t always the best strategy. Buyers usually look for overall growth over the years and not just the recent data. So, Don’t wait for the “perfect time”. Instead, use this time to optimize the store.
7 Steps to Sell Your Shopify Store
It’s better to have a simple checklist that you can keep by your side when you are making such a big decision. Don’t worry, we will discuss major steps later. Follow these steps to sell your Shopify store:
- Prepare Your Store
- Get a Business Valuation
- Review Existing Obligations
- Outline Transition Requirements
- Choose a Platform or a Broker
- Negotiate with Potential Buyers
- Transfer Ownership
With these 7 steps process, you’ll be well-prepared to ensure a smooth transition for the new owner.
Preparing Your Shopify Store for Sale
Just like anything in the world, if you want to get the best price out of a product (in this case: your store), you need to make it as attractive as possible to potential buyers. Here’s how to prepare your store for sale:
Optimizing Financials and Operations
Start by organizing your finances and auditing your books. Use Shopify’s built-in analytics to collect accurate data and organize it. Create an income statement, balance sheet, and cash flow statement.
Also, if you have any unpaid debts, consider paying them off if possible. Buyers usually don’t like businesses that have a lot of debt.
Shopify also recommends exporting essential business data you’ll need to keep after the sale. This includes billing history, payout records, and transaction details, especially if you’re using Shopify Payments.
Documenting Processes and Assets
Detail your customer acquisition strategies and operations. Update your inventory, verify all functions are working correctly, and ensure your store data is accurate.
After that, create a clear plan for transitioning your business to new ownership. This might include details about staff contracts, brand assets, or relationships with third-party services.
Also, maintain regular operations during the sale process, including financial record management, product restocking, and marketing spend monitoring.
Creating an Attractive Listing
Craft a compelling listing for your store, on the e-commerce platform or a PDF that highlights all the important details of your business. Use high-quality photography to showcase your products and brand. Make sure your brand identity is consistent across all touchpoints.
Addressing Potential Red Flags
Ensure your business can be transferred to a new owner. Check if employment contracts are transferable and if your store’s terms of service are up-to-date. Agree in writing on any post-sale assistance you’ll provide to the new owner. Address any issues in crucial areas like supply chain management or advertising before listing your store for sale.
Making sure that there will be no error in the website due diligence is an important reason why you should take adequate time in preparation before.
Determining the Value of Your Shopify Store
To get the best price for your Shopify store, you need to understand its true value. This process involves analyzing various factors and using specific valuation methods. Let’s dive into the key aspects of determining your store’s worth.
Several elements influence your Shopify store’s value mentioned above: Profitability, Conversion rates, Traffic, Customer Base, Brand Strength, Market Position, and Niche.
Have a professional assess your store’s fair market value. This gives you a realistic starting point for negotiations and helps you set an appropriate asking price.
While you can do that later, here’s a simple formula that you can start with now (just to see what’s an approximate figure):
12-Month average net profit x Multiple = Valuation
While the profit is the number you can get from your P&L statement, finding the right multiple is tricky. The multiple typically range from 10x to 50x. This depends on your brand following, conversion rates, and market niche.
With these, there are also some common valuation mistakes. You should never overestimate the future growth as buyers usually look more on the current numbers and not much on the future. Also, never neglecting market conditions. If the economy is booming and the business is in a trending niche, you will get a better price.
Remember, an accurate valuation is crucial for setting the right price and attracting potential buyers. We have a Shopify Store Valuation Tool that you can try also.
We also have a guide on how to sell any online business, where you will find more tips to maximize your selling price.
Where to Sell your Shopify Store?
When it’s time to sell your Shopify store, selecting the right platform is crucial. You have several options, each with its advantages. Let’s explore the different approaches and popular marketplaces to help you make an informed decision.
Most sellers’ first choice will be to sell the store directly to the owner. While you might save some commission money, it will create a bigger headache later. Either you do not have a lot of buyers to compete for the best price, or you might face challenges in the transfer process. That’s where marketplaces like Ecomswap come into play.
Online marketplaces connect you with a wide pool of potential buyers. In addition to that, we also offer tools to showcase your store, navigate complex negotiations, and facilitate the transaction.
When choosing a platform, consider factors in your preferred level of support during the sale process. That’s where we can help you the most.
Negotiating and Closing the Deal
When selling your Shopify store, it’s crucial to find the right buyer. Engage with multiple potential buyers to give yourself leverage in negotiations and increase your chances of finding the perfect match.
But the tricky part is the negotiation. It is a phase where your deal could be made or broken. Know your minimum acceptable price, but remain open to creative deal structures that meet both parties’ needs.
Once you’ve found a buyer and agreed on terms, it’s time to transfer ownership. Update your store’s contact information, notification settings, and billing details in the Shopify admin. Don’t forget to transfer any custom domains you’ve purchased for your store.
You also provide the options for the buyer to either accept a full lump sum payment or get a partial payment today and regular payments later for some months. This will relax them to not have to pull out a big bag of cash upfront and they might be ready to pay a higher price.
Once you’ve agreed on terms, it’s time to close the deal. Sign the purchase agreement outlining the terms and conditions. Then, transfer business assets, including the Shopify store, domain names, and associated accounts.
Shopify has officially noted the following things to do before the transfer:
- Update the business contact information.
- Update the email address information to that of the new owner.
- Update the new owner’s billing information (also For non-shopify third-party apps).
- Update your store’s payout information to the new owner’s bank account of the new owner.
Remember, you have to officially transfer account ownership to the Shopify admin. This step removes your account owner permissions, completing the handover to the new owner.
By following these steps and staying focused on your goals, you’ll be well-positioned to sell your Shopify store for the best price.
Conclusion
This guide has walked you through the key steps to sell your Shopify store, determine its value, and negotiate a great deal. With the right approach and preparation, you can have a profitable exit strategy for your e-commerce store.
