Is now the time to sell your eCommerce store? With Nate Lind (episode 325)
Nate Lind is the founder of multiple eCommerce businesses to which he’s driven $100 million in sales. Mainly in the men’s and women’s beauty space. Back in episode 163, he explained all about how he does that, and now he’s back to update us on his new focus-helping eCommerce business owners sell their business successfully.
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Shifting From Running to Selling eCommerce Business
Nate says that he shifted from driving traffic and building his own successful sites to helping business owners succeed as part of a “natural evolution.” Nate says he’s experienced this evolution from more than one point of view.
In 2016 for instance, he sold an eCommerce reporting system he had built to the platform he was selling on—and walked away with a nice sum of cash. Another venture, he and a partner mutually decided to walk away from.
After his partnership dissolved, Nate shifted his attention to education and speaking at conferences. It was here that he crossed paths with the founders of Website Closers. His conversations with them fed his interest in how many buyers there are for eCommerce businesses.
Nate saw an opportunity to leverage his peer network and connect buyers and sellers.
Types of Buyers
For Businesses Under $5M
These buyers are often people with high salaries and a dream of escaping corporate life. These folks are looking to acquire a business that has the kinks worked out.
They have an interest in entrepreneurship, expertise in business, but want to skip the first few years of start-up pain and risk.
For Businesses Over $5M, but especially over $10M
Private equity, family office, institutional investment firms, large eCommerce businesses and more are consistently expressing interest in purchasing eCommerce businesses of this size.
The pandemic has shined an even brighter light on the importance of eCommerce — something that has been reflected in the level of interest Nate has seen.
He likens it to a hot real estate market — there are 100 qualified buyers for every seller in this range.
What you Need To Sell Successfully—and Profitably
- A Clear Financial Picture
- Income Statement
- Balance sheet
- Consistently tracked revenue, including profit and loss
- A Business bank account that you use consistently for expenses
- Get a bookkeeper to keep a clean set of reconciled books.
If you don’t have a bookkeeper, GET ONE. A bookkeeper is hugely helpful and will be a game changer for your business.
If you have the following, there are qualified buyers
- At least one year old
- Growing in top-line sales and in profit
- Over $250,000 in net earnings
Don’t let the numbers sway you until you talk to a professional. Nate and his team can work with businesses to help them understand their true Seller Discretionary Earnings number.
Does Location Matter for eCommerce?
There are buyers interested in businesses from all over the world. However, a United States based business that’s more than 2 years old does have special value because of several special financing opportunities available through the SBA.
These kinds of perks are something that Nate has become intimately acquainted with over the past few years.
Even without consistently solid numbers, Nates says if you can show your financial picture clearly, have built some brand value around your assets and the business is growing, you can likely expect to see 3-5X earnings for overall sales price.
But keep in mind that is a rough number. Nate says there are a lot of factors that can change this, a reason that makes valuation so critical.
eCommerce Book Top Tip
- Traction: Get a Grip on Your Business by Gino Wickman
eCommerce Traffic Top Tip
Tool Top Tip
- Gmail + Virtual Assistant: Getting a virtual assistant inside your Gmail Account and using the tools that are there
Growth Top Tip
- If you are on Amazon, get a Shopify Store going and leverage those users to drive traffic.
- If you aren’t on Amazon, get on it
- Use Email well—create gifting strategies via email every single month
Interview Links
Related episodes
- eCommerce Insurance – what protection should you have? With Megan Bingham-Walker from Anansie
- How to get from $500k to 1 million annual sales with Lucy Bloomfield from 10,000 Customers
- Christine Nicholson explains why and how she closed eCommerce subscription business Divine Legs
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