Who Will Buy my Ecommerce Business?
In the past year, we have seen growth of buyers outpace the growth of sellers (at least for the good businesses) This is especially true for businesses making less than $100K per year.
The three main buyers of Ecommerce businesses we see are:
Boutique private equity companies.
Small investment firms have popped up with increasing frequency over the past few years. They raise anywhere from $2 million to $10 million from investors. Then they’ll acquire a portfolio of businesses, streamline the operations and use their expertise to scale the businesses.
They are typically focused on businesses upwards of $1 MM and likely won’t be interested in businesses making less than $200k / yr.
There are a good number of people who see the appeal of the digital entrepreneur lifestyle. Typically these are people with a finance or engineering background who see the value in owning a small business and would rather work 3 hours per week and spend time with their family than pursue their current career.
In addition, many buyers based in the US are eligible to use assets from qualified retirement accounts to purchase businesses. At Upward Exits, we always go the extra step to help buyers explore financing options. This also helps the seller get cash offers and higher valuations. You can read more about our buyer services here.
Current ecommerce owners
We see a number of folks who are already running ecommerce businesses purchase additional businesses to expand their product offering. Often times they already have a fulfillment process, marketing process and customer service teams in place. This means that they may only increase their workload 1-2 hrs. / week and can get a great return on their investment.
We have also seen a good number of Amazon sellers purchase ecommerce businesses with the intent adding Amazon as a sales channel. This may present a lucrative growth opportunity for the purchaser.
How Do I Sell my Ecommerce Business?
We created a blog all about the process to selling your online business. There may be a few additional steps for businesses with their own warehouse and fulfillment processes. These sellers will typically either continue to fulfill orders for the inventory they have in stock. Or, ship the products to the buyer’s warehouse.