There are risks associated with all business ventures. Please act responsibly.
A little known advantage of Shopify online stores is the built-in parachute for selling website businesses. Buyers are poised to purchase businesses outright or perhaps invest money for an equity stake.
Building a website to support a new business venture can be time-consuming and expensive. Sometimes it is even rewarding. But let’s face it, the online shopping landscape is competitive.
The dropshipping bubble has burst for most startups. Wholesalers are commoditizing products by selling to both resellers and consumers. Only those with unique products or extremely loyal customers survive.
Is your “side business” draining more time than you imagined? After a significant investment of time and money, what do you do if your website is not profitable? Perhaps, you have built up a successful online business but now want to exit or retire.
On other platforms, you might simply cut your losses and shut down the website. But there is a robust community of Shopify users who would love to expand their reach by partnering with struggling businesses or purchasing them outright.
Historical profit and loss statements are helpful. If properly entered on product pages, profit for the past year appears on each Exchange Marketplace listing. Of course, a shop that is losing money is not worth as much as one that is thriving.
There are a few requirements to list your business on Exchange Marketplace:
- Only the Shopify account owner can access and install the Exchange app in a Shopify store.
- Your Shopify account must be on a paid plan. This includes Shopify’s paused online store plan.
- Your business can't be in its trial period. You must wait one day after paying your first invoice to be eligible.
- If you use Shopify Payments, then your account must be in good standing. If your business has been removed from Shopify Payments, then you can’t list it on Exchange.
- You can’t have active financing from Shopify Capital.
- Your business can’t be on Shopify Plus. If your business is currently on Shopify Plus, you must contact Shopify Plus Support and discuss the possibility of negotiating your contract and dropping to an eligible plan.
When you sell your store on Exchange, there is a checkbox where people can say “I’m willing to do training with the new buyer, pass them down to the business and maybe write some guides about how we do different processes.” Many people are interested in that and want to do it to ensure a successful transition.
Process For Selling a Shopify Business
The process of selling a business on Exchange can be complicated, depending on the business involved. But in general, it follows these steps:
- Meet the listing eligibility and review Exchange Marketplace guidelines.
- Install the Exchange Marketplace app.
- Create a listing for your business and submit it for review.
- After your review is approved, publish your listing.
- The buyer will send you a message.
- You respond to the buyer’s questions.
- The buyer sends you an offer.
- You accept the offer.
- You create the Escrow transaction in your Exchange app.
- The buyer is notified to accept the terms and submit payment to the Escrow transaction.
- You are notified to transfer assets to the buyer.
- The buyer marks all assets as received in Escrow.
- The buyer performs their inspection period.
- The buyer marks all assets as accepted in Escrow.
- Funds are disbursed to you from Escrow and should arrive in your bank account within 5 business days.
- The buyer is made the new store owner by the Shopify Accounts team within 3 business days. The Shopify Accounts team ensures that your billing and payment information is securely removed during this process.
Advantages of Shopify investors is that they understand the eCommerce platform. They may have several online stores with customers that may be merged. So a well-matched partner can help a struggling website into greater profitability. Find investors by posting a notice in the Shopify Community forum.
Shopping For a Shopify Business
Perhaps you are in the market for a new business. Rather than building it up from scratch, consider buying one that already has a track record. Stores on Exchange range from ready-to-go starter stores to successful eCommerce businesses. Starter stores can cost as little as $50, while established 6-figure eCommerce empires can sell for over $1 million.
Each listing contains a description of what you get with the store, along with traffic and revenue throughout the past year, and an asking price, which you can negotiate with the seller by sending them a message through the contact form. Many sellers also list their reason for selling the store, which is often due to a lack of time or a life-changing event.
The listing also shows you what the seller is willing to give you for the asking price, including the seller’s:
- Physical inventory
- Supplier lists
- Email list
- Logo and branding
- Social media accounts
- Support after sale
- Product photos
- Anything else you can negotiate with the seller to include in the final deal
Sellers and buyers can communicate directly through Exchange using an anonymous email to discuss additional information about the store or the sale. Some businesses are seasonal. They may have been suspended since listing it on the marketplace. Either condition can lower realtime marketing data.
Likely, some type of expertise is required to maintain or grow the business. This may include product acquisition or development, marketing, and/or website optimization. Fad products can fall out of favor with consumers. There are risks associated with all business ventures. Please act responsibly.