This is an article I plan on adding on to over time and more credible platforms to sell Shopify and Ecommerce stores come online.
Original article appeared on LInked In here:
Original article was published on LInked In here.
Original article was published on Linked In here
Dianthus was founded on the premise that artificial intelligence is under-applied to D2C ecommerce, and that by unlocking the latent value of your brand with our custom AI-powered tools, we can offer the highest return on a sale for Shopify powered brands that show AI potential. However, we know Dianthus won’t be a fit for every brand that sells on Shopify, so in the interest of being helpful to the Shopify ecosystem at large, we created a list of the top 5 places you should consider when selling your Shopify store.
Original article was published on Linked in here.
Before we get started, there are a few factors you need to consider when deciding where to sell.
- Are you testing the waters? Or committed to selling? Some sites and processes are better if you are sure you want to sell.
- Do you have your accounting and legal ducks in a row? The process is much cleaner and faster if you are current on all sales and payroll taxes, and have your books ready to go, but even if you don’t, you can still get a transaction done.
- How big is your business? Stores under $100,000 in sales, $100K – $1M in sales, $1M – $5M in sales, and > $5M in sales all attract different types of buyers. You want to make sure you choose a site to sell that hits your target market.
- Do you have channels other than Shopify? Some places to list are more focused on pure ecommerce businesses, not omni-channel brands.
With that out of the way, let’s get started with an overall evaluation of the major sites, along with some notes as it relates to different types of sellers.
#1 – WebsiteClosers
Websiteclosers has a very long history of selling companies with a web-first presence. That experience and focus gives them a leg up to put them in our top spot for Shopify merchants that are at least $500K in revenue or more. Benefits to using Websiteclosers are that they have a flexible process and can accommodate a wide range of businesses. They’ve sold companies up to $200M but can also help Shopify stores that are much much smaller. Websiteclosers can also help with valuation and deal financing, through relationships they have established over the years. The primary downside is that if your Shopify business is really new or really small, or has highly variable monthly sales, they may not be as helpful given the types of buyers they attract.
Websiteclosers is the best choice for small to midsized Shopify stores that show consistent monthly revenue and want a formal structured process.
#2 – Shopify ExchangeMarketplace
The ExchangeMarketplace is a great choice because it is run by Shopify and can automatically connect to your store and provide user and revenue numbers to potential buyers, that are validated by Shopify. This can make the diligence process much faster and smoother. Shopfiy has also partnered with Escrow.com and integrated it into the transaction workflow, so that can make the process better and more trusting for both parties involved. Since the marketplace also lists only Shopify stores, you know any potential buyer is fine with the Shopify platform and that won’t be a headache in diligence later.
On the downside, if your business has a lot of revenue that doesn’t flow through Shopify, it may not hit the search criteria of many buyers. If you do $1M per year but only $200K through Shopify, buyers searching for brands with $1M+ in sales may not easily find you. It’s also a bit crowded, with businesses of all sizes on it, so there is lots of competition.
Overall, the Shopify ExchangeMarketplace is best for brands that are smaller and heavily centered in the Shopify ecosystem.
#3 Flippa
Flippa holds the distinction of having the most transactions of websites in the ecommerce space, many of which are on Shopify. The size of the buyer and seller groups are a huge asset and if you choose to sell your Shopify store on Flippa, you will get a lot of eyeballs which is one step towards an optimal outcome. All the savvy buyers are hanging out watching Flippa listings regularly. The downside of selling on Flippa is that if you need more hand-holding, they don’t have the services or automation available at some of the other options. The sites skew a little smaller than Websiteclosers, and there is a bit more junk to wade through than on other sites.
Flippa is a great option for smaller Shopify stores that have their financials in order and don’t need help structuring a deal, or experienced sellers who have sold a website before.
#4 – Microacquire
Microacquire is a newer entrant into the business buying space, but has rapidly attracted a large following for the high quality listings they attract. The primary benefit of listing on Microacquire is that your Shopify store doesn’t get lumped in with some of the lower quality websites found on other listings. And because they are young and new, the Microacquire team is super responsive and the site is progressing rapidly with new features and functionality. Microacquire also makes it easy to control what information you share with potential buyers. If we had to place a bet, it would be that when we re-do this post in a year, Microacquire has ascended to a much higher spot on the list.
The primary downside of Microacquire is a clunky messaging interface that sometimes causes confusion, and missed messages between buyer and seller. So if you use Microacquire, stay diligent in your communications and try to move off the site to email sooner rather than later.
This is best for small to mid-sized D2C businesses, and might be a better option if you are just kicking the tires on a sale. The buyers here are very serious and you won’t waste time.
#5 – Business Brokers
There are thousands of small business brokers that can also help you sell your Shopify store. You can find their websites by searching your local area for a list of them. The primary benefit of a business broker is the personalized service they can offer. Brokers can help you clean up any accounting and legal issues to help prepare your business for sale, advise you throughout the process, and even negotiate on your behalf. Because of the compensation structure, brokers may not take smaller businesses that other options will allow.
The downside is, compared to the other listed options above, brokers command a higher price, so you will get less of the sale proceeds, and if you get a lousy broker, they can actually screw up your sale process. If you decide to go this route, be sure to check references and make sure you get someone who adds value to the process and helps you maximize the outcome.
Business brokers are the best choice for larger businesses that want to run a structured and controlled process, or businesses that need a lot of help preparing for sale.
That’s our early 2021 summary of where to list if you are considering a sale of your Shopify store. We hope it was helpful. If you are looking to sell your business and you think it has a lot of growth potential, and you want a structure that can capture a lot of that upside, we hope you will also consider Dianthus as a good home. We believe we can help grow your brand faster than you ever imagined, while staying true to your brand vision. If you want to discuss a possible acquisition with us, you can start the process here.