Selling your Shopify store may appear to be quite complicated and incredibly daunting.
Having recently sold my own store for the first time, I felt it apt to put together a guide to help you sell your Shopify store in 2021.
Why would you sell your Shopify store?
There are many reasons to want to sell your Shopify store, perhaps things are going great for you right now, and the thought may never have even crossed your mind.
However, if your store isn’t performing so well, this is one main reason why people would want to sell their store. Selling a poor performing business is a hard sell, but possible if the buyer thinks there are business aspects with potential.
Perhaps you have a new store that needs an injection of both time and capital; this is another valid reason to want to sell. Are competitors getting a little too much, driving the CPC higher and squeezing your profit margins? Or is your once high converting product idea on a slow decline?
These are again all good reasons to want to sell your store. Yet this brings up a very important question:
Why would the buyer want your Shopify store?
To sell the store, you need to understand what value you would bring to the buyer should they buy your store.
If your business comprises of money lost to ads, you may think that the buyer would have zero interest in your store. On the contrary, you could have a huge social media following or mailing list and just not know how to use it best, whereas the buyer may.
You could have an expensive theme that you have spent a few $100 on and are just trying to recoup some of that money back. You could also have a .com domain, which could be seen as highly sought after. (This is also called a premium domain name)
The point being here, similar to a job interview, you would always sell your business on its strengths.
Where can you list your Shopify store for sale?
When selling your Shopify store, there are several platforms to consider; however, the two major players are Exchange Marketplace and Flippa.
We will go into a few pros and cons of both platforms and let you decide which is best:
1. Exchange Marketplace
This platform integrates beautifully with Shopify, it is a case of downloading the app, filling in a few details, and the rest is extracted from your store.
This gives the potential buyer a great deal of confidence as the platform verifies your figures.
One of my own personal gripes was the lack of engaged buyers, it was common to get a small handful of messages a day, and unfortunately, quite a few appeared to be scammers. This is something which we will go over later on in this article.
My store was listed here for a month with little to no interest, but it cost me nothing to list it here.
The Exchange Marketplace does not charge a fee to list the store; however, they do charge a success fee, which is currently undefined on their website. It will, however, show all costs below the appraisal when it generates on their app.
Flippa was the second option I went for and which I was successful in selling my business with.
They boast 1.5 million registered users, and at the time of writing this, they had 14,896 bids made this current week on their listings.
Similar to Exchange Marketplace, they too have their share of scammers and tire kickers, but Flippa managed to drive a great deal more traffic to the store as well as a lot more genuine queries.
For the sale of a business under $50,000, Flippa will take a 10% success fee, and this is deducted from the sale.
They also charge a $15 listing fee, which will entitle you to an auction listing that isn’t obligatory. Once the auction listing is finished, you may continue as a classified listing for as long as you need to.
How much would you list your store for?
Exchange Marketplace is an app that you can add to your Shopify Store. It will scrape your store’s data and look at a few factors such as traffic, mailing list size, and revenue.
It will then generate an appraisal based on these factors.
In their article on valuations, they say that the store’s value can be anything between 10-24 times the average monthly earnings.
However, this has to be taken with a grain of salt, as they later on state that the store is ultimately worth what the buyer will pay, and rightly so.
Flippa is another platform that is just as popular. For their appraisal, they will ask a few basic questions about your store such as time opened, revenue, and expenditure; it will then provide a valuation similar to below:
It’s important to note here that regardless of the appraisal given, they are there to get a rough guide price, and it’s entirely your choice how much you wish to list your store for on both platforms.
How long does it take to sell a Shopify store?
The time it would take to sell your store depends on both general interest and your will to sell it. I passively listed my store for a couple of months with little to no interest.
When I decided to fully commit to it, creating a well-written listing and paying for a decent sales platform to list it on, it was only a couple of weeks before it actually sold.
Of course, it then took a couple more weeks to go through the sale process. (More on that below)
Ways to list your store
After listing my store on Exchange Marketplace for a month and it gaining no traction, I decided to list it on Flippa. As it only costs $15 for a basic listing, it didn’t cost a great deal to give it a go.
There are many other options, as seen above, to boost your listing and get more people both looking and engaging with your store.
On the first step, Flippa will ask a few questions such as what the store sells, its revenue, age, and traffic. The traffic can also be verified by a Google Analytics integration.
Next, you will be asked to put together your listing; they make this easy by putting together a nice bullet-pointed form which you can amend as you go on, or completely throw out and start from scratch if you wish.
On this same page, you will be able to list the store in one of two different ways, either by a classified listing or as an auction. We will go into a little more detail on how both work:
For this listing, you can have it on Flippa for as long as you wish. You basically set an asking price and forget about it until someone contacts you.
This will be more aimed at someone who is trying to feel out the interest but not in a hurry to sell.
The drawback to this is it doesn’t typically generate as much interest as an auction would by giving that sense of urgency to take action.
Should you list your store as an auction, you will be given the option to set the duration of the listing to a maximum of 30 days:
A starting price and a reserve will be required and a ‘Buy it now price’ is optional. It was quite common to see stores listed as low as $1 simply to drum up interest and get people bidding early on.
Should your store not sell within this period, you don’t lose your $15 as you are still able to revert back to a classified listing afterward.
My choice of listing
The choice of listing method was an easy one; I went for the auction knowing that I was able to revert to the classified after should it not sell.
Unfortunately for me, the listing itself was of poor quality, and the price, suggested by Flippa, was just too high. So, in this case, I fell back onto the Classified listing.
Writing up the listing
This part is quite important. You want to very concise about your store in the listing. You want to give as much information while holding the reader’s attention.
Here are a few things to mention:
1. About yourself
Up until the point of selling the store, the business is you. Give the reader a bit of background on yourself and what value you brought to the store.
If you have experience in ecommerce, now is a good time to mention it, let the reader know the store was in good hands.
Mention here why you are selling the store and how much time in the week running it generally takes. You will be asked questions many times, so answer them preemptively.
2. Summary of the store
A quick run-through on your store, its business model, and where products are sourced from. This part must be engaging as most readers are unlikely to read beyond this point.
For my own listing, I decided to mention the business’ strengths and opportunities; that’s right, don’t use the word weaknesses as this would be selling the store shortly.
What this means is that in the right hands, the business could thrive.
3. Your customers
Potential buyers like to know who their audience would be, whether they can relate to both the product and the customer. Paint a picture here as to who the average customer is, be it age, gender, or even interests.
4. Business Financials
This is the most important section to add to the listing.
Whilst Flippa does have a financial section to complete on stores revenue/profit, such as below, it is beneficial to summarise the financials you have declared in a couple of sentences.
Flippa allows you to attach quite a wide array of attachments to your listing for readers to download and have a look at.
At the very least you should put a screenshot of revenue on your Shopify platform and a profit and loss statement.
As mentioned before, giving this info beforehand will save you a lot of unnecessary back and forth with questions. The intention is to get people bidding as soon as possible, especially when you have the listing set up as an auction.
What to expect after listing your Shopify store for sale?
Unfortunately, when you list your store on any public platform, you open yourself up to tire kickers and imitators. Whilst it is an incredibly frustrating part of selling your store, it is inevitable.
Let’s go over two kinds of things that you can expect after listing your store for sale:
1. Tire Kickers
These are people who do not have a sincere intent to buy your store and are merely appearing interested in doing so.
This is likened to people who visit car dealerships, kick the tires on a few vehicles to suggest their interest, then leave again without ever buying a car.
It is very difficult to know who is genuinely interested and who isn’t. It is best just to treat them with the same courtesy as you would with anyone making a query.
One thing to look out for is people blindly reaching out asking for access to look around your Google Analytics or Shopify Platform.
Nothing wrong with providing guest access, but ask them what specifically they want to look at; your typical tire kicker will often lose interest at this point.
As before, it is difficult to identify who could potentially want to copy your store rather than buy it. Protecting yourself completely against this can be difficult because if someone wants to do this, then they will.
All you can do to mitigate the chance of this happening is offering your supply contacts with the store and not give this away for free. It’s also quite important to remain guarded on any winning marketing strategy you may have.
When selling my Shopify store, I gave a potential buyer temporary access to Google Analytics. Two days later, a carbon copy of my store was running Google Ads going after the same keywords. Several DMCA petitions later, the store was taken down.
In hindsight, I do not think I would have sold my store without giving people the chance to ‘look under the hood’, so to speak. Imitators and tire kickers happen. Just be sure not to spoon-feed them information.
Following the process
In order to secure yourself against unsavory characters, always follow the process set out on the platform. Any agreements must take place within your choice of the sales platform.
Speaking with buyers
On the Exchange Market place, they have quite a strict policy against communications outside of their platform. It is crucial that you follow this policy when selling a store through their platform.
Flippa has a looser policy where it is permitted; however, agreements are not set in stone outside of their sales platform. So make sure these take place on their messenger portal.
During the sale of my store, I was asked to chat through Whatsapp on quite a few occasions, I entertained this idea, and it was almost always people trying to promote their ecommerce services. They would get banned quickly doing this within Flippa.
The only time this wasn’t the case was the person who ended up buying my store, so you cannot write this idea off entirely.
When your store is listed, people are now able to bid or make an offer, depending on your listing type. When this happens in Flippa, you will get an email, and the offer will show up in your dashboard as below:
You will then have the option to accept or reject the offer; again make sure this happens through the platform. If the buyer requests dealing outside, just don’t do it.
If you reject the offer, you will have the option to put forward a counter offer along with a message. Should you decide to accept the offer, you will then move forward to the next step, which is the exchange of the store.
Outlining the buyer requirements
The sale of the store will not always be just the store and could involve the transfer of any of the following:
- Shopify Store
- Social media accounts
- Media kits (images, branding, or marketing material)
- Advertising account
- Logistical contacts
- Physical inventory
- The company deeds if an established business
- A non-compete agreement can be attached to the sale for an extra cost.
It is important at this stage to agree on this because once the purchase has been completed, this cannot be renegotiated.
Put together a checklist of this and have both parties sign off on every element of the sale to cover yourself should a dispute arise later on.
What is Escrow and how does it work?
Escrow handles the transfer of cash between two parties and ensures all agreed requirements are met prior to the release of the funds to the seller.
Once you have accepted an offer, Flippa will direct you to Escrow to set up an account and go through their validation.
Unfortunately, it can take a few days to go through, and it will take even longer for the buyer as their payment also goes through validation.
Once they are happy with everything, you will get an email instructing you to begin the transfer of assets over to the buyer.
It took a total of two weeks from the sale of the store to Escrow releasing the funds from the sale. This was delayed by a week because the buyers’ payment method needed vetting by Escrow.
Communication is key
Some buyers may be new to ecommerce, and the sale may also require an agreement of a few weeks of you helping them transition to the ownership of their new store.
This was the case with my store’s buyer; he requested a small amount of hand-holding for the first week. It was not a major problem for me as he was a real pleasure to speak to and work with.
We had candid conversations about the stores’ strengths, weaknesses, and the direction he wanted to take.
For ease of accessibility at this stage, we continued talking outside of Flippa on Whatsapp, the sale went through without a hitch.
My experience when selling my Shopify store
The amount of interest that my store got was out of control before the sale was agreed on. In one day, I received 150 emails with questions that could have easily been answered preemptively in the listing.
I encountered a huge amount of silly offers for $100 and a bunch of tire kickers. It was frustrating to see someone copied my store word for word, and filing a DMCA against them was not something I expected to have to do when listing the store for sale.
I was initially complacent, didn’t think the store would sell, and all I would gain from this would be a few new competitors. To be able to sell my store for $7,000 was a good outcome for me. I paid $700 in success fees from this amount plus a $10 disbursement to Escrow.
Whilst it was completely unchartered waters for me, the Flippa platform was very clear to use and walked me through it step by step.
Handing over the keys to my business was difficult as it’s easy to get emotionally attached, but the buyer was a pleasure to work with.
I am confident the buyer will inject the capital and attention that my store needed to take it to the next level. We remain in touch; he values my input and is maintaining the business identity. What more could anyone ask for?
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