The eCommerce business was already a thriving one, but the social restrictions and physical distancing have given it a significant booster shot. This is evident in a large number of IPOs that were successfully launched by eCommerce startups in the last year alone. While it might be the FOMO or the excitement of cashing in on this frenzy, it is important to understand the factors affecting saleability and follow the steps to, realistically, create an enterprise that is sustainable and will fetch you the maximum profits when you put your eCommerce business for sale.
Factors That Make Businesses Easy To Sell
Before we explain the steps to be followed for the creation of the business, let us do some reverse engineering and understand the factors that will solidify your idea of putting your eCommerce business for sale. Keeping this in mind you can, then, organise your subsequent activities.
- Diverse Product Inventory – Businesses with a diverse product catalogue are easier to sell. On the other hand, drop shipping businesses that do not have any inventory of their own are also a hit. The idea is to either have no inventory-related storage of fulfillment costs or to have a diverse inventory for higher sales
- Long-term scalability – You may have heard the term “recurring revenue formula”. It means having the scope of staying in demand in the long term and also having the infrastructure and supply chain system in place for scalability and growth.
- Customer Feedback – Online businesses are successful in a large part due to repeat business of existing customers and the introduction of a new customer base through word of mouth as well as customer reviews and feedback.
- Traffic – As one would expect, having multiple channels of traffic as well as multi marketing means significantly boosting sales, thereby increasing the valuation of your eCommerce business for sale.
- Financial Performance – Naturally, any potential buyer will be most keen on the top and bottom line of your performance. Its financial health and cash flow are usually the principal factors affecting the valuation and sale of any eCommerce business.
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How To Create Your eCommerce Business For Sale
With the above-mentioned factors being your guiding principles, here are some helpful steps to follow to create your own eCommerce business
1. Conduct Market Research
The study of market and product viability is one of the first and critical steps before getting into any venture. This market research should also include the market size, target audience, competition, demand, SWOT analysis, etc.
2. Choose Your Line Of Business
As a result of the previous step, you should now have a fair idea of the market trends and what sells. While there may be several aspects to choose from, eCommerce businesses can broadly be categorised into services, digital goods, physical goods, and subscriptions. Based on your own inclination and ideas, go ahead and choose one or a combination to create your own unique niche.
3. Select The Business Model
The next logical step is to identify your business model. There are several ways to sell your products and services online. The most common mode chosen by several entrepreneurs is direct-to-customer. Most people tend to start their eCommerce business with a B2C model. In addition to the B2C model, there are several other options that you can choose including dropshipping, warehousing, inventory fulfilment, white labelling, wholesaling, among others.
4. Choose The Platform
The SaaS (Software as a Service) model is usually the most preferred one, especially for first-time entrepreneurs. The chief reasons for this include low cost of entry, no investment in technical infrastructure, an already existent platform that can be scalable as per your growth. The other advantages include high security and regulatory compliant payment protocols. Else, you may choose to host your own website as well.
5. Lay The Groundwork
Now it’s time to set the logistics in place. To make your business stand out from the several others in the market, you need to focus on:
- Branding – name, logo, theme
- Sourcing partners, vendors
- Inventory Management
- Financial management
- Sales, marketing, and operations
6. Market Your eCommerce Business
Just launching your business isn’t enough. In the cut-throat competitive market these days, you need to make extra effort to bring in the traffic. There can be multiple ways of achieving this. Some examples include:
- Social Media – sharing product reviews, discounts, deals, and offers can help bring in a buzz around your business. A lot of this can be achieved for free.
- Influencer Marketing – if your social media efforts do not reap sufficient benefits then you can always turn to influencers to help promote your products.
- Paid Advertising – or, you can always turn to experts like advertising consultants who can create campaigns for email marketing, SEO focussed content, and several other ways to generate more traffic using the power of marketing analytics.
Creating a business with the idea of selling it may not always work well. This is largely because your endeavours get directed by a singular objective. However, knowing the traits of a business that attract buyers is always beneficial before putting your eCommerce business for sale. This, along with the steps described above can go a long way in helping you set up a successful eCommerce business which will bear fruits for you during its operations and afterwards as well when you decide to put your eCommerce business for sale.