15 {{ upvoteCount | shortNum }}
15 {{ upvoteCount | shortNum }}

Selling my internet retail business

by zipper10
13 replies
Hi,

I've been considering selling my business to put in time for my new ventures but also supporting three business (one being brick & mortar) and managing all the websites is just not efficient.

I basically sell specific sporting products since 2007 and there are only few in the US that sell this brand. I had the best sales in 2011 that peaked close to $200,000 in annual sales.

This is where I'm not sure about; I looked around so many websites, get a ball park figure, using calculator, etc. It's really a business that's selling itself without much advertising and I know the right business owner can make more. There's just not enough time to put in at the moment.

This year for example has been slow and it's down to about $60,000 in sales so far. There's really no overhead as I sell from my home, buy the product once the customer pays and basically receive the goods, then ship them back out.

Thoughts? Sell it? Keep it until the economy rebounds? Put more effort into it? My new venture involves media and it's risky at this point as there are a lot of competitors. But it's also my passion and something I've always enjoyed and loved doing.

I just don't know what it's even worth if I were to sell it.
#business #internet #retail #selling
  • Profile picture of the author clairelynn23
    Just a thought, but it might not be the best time to sell since your sales are down at this time. I mean, that is if you are trying to get the best price and you think the business is worth more. Just my 2 cents.
    Signature
    {{ DiscussionBoard.errors[8672669].message }}
  • Profile picture of the author zipper10
    I'm assuming you mean that by I should sell when my business is doing well again?

    This year has been pretty bad retail all around. People just don't seem to be buying. Competitors; not so much as the company I work with is very strict about new dealers and not accepting any. But I have to blame myself also as I haven't done much marketing either.
    {{ DiscussionBoard.errors[8672692].message }}
  • Profile picture of the author ParkerFar
    I agree with ClaireLynn23 that it may not be the best time to sell. I guess it all depends on what is most important to you at the moment. Do you simply want to get out? Maximize the sale price? You need to figure that out first.

    If you chose to sell you need to consider your income and a solid multiple for that type of business. Not sure about your market or your products but given that your overhead is minimal you would most likely subtract your cost of goods sold form your total revenue and multiply that by the multiple your industry/competitors deem fair.

    If it was me and I wanted maximum price I would consider waiting until your revenue is on an upward trend, thereby earning yourself the highest valuation.

    Again it really depends what's most important to you.

    Best of luck fellow warrior!
    Signature

    i guess this is where i tell everyone i have a blog, among other things - www.parkerfarington.com

    {{ DiscussionBoard.errors[8672705].message }}
  • Profile picture of the author zipper10
    What would the business be worth let's say averaging $100,000 a year in sales and let's just say $30,000 in profits after everything is said & done?
    {{ DiscussionBoard.errors[8672720].message }}
  • Profile picture of the author Rbtmarshall
    would need to look at the P&L for starters

    telling me you;ve made 30,000 profit based on 100k in sales don't mean shit.
    {{ DiscussionBoard.errors[8672794].message }}
  • Profile picture of the author zipper10
    I guess if my monthly advertising exceeded the profit then I would've had a loss but I can't remember a month where I had a loss. I don't keep any inventory either. Web hosting and ads is really the only operating expense I have at this point.

    I'm just reading all over about everything from selling at 2-4 times the average annual profit and elsewhere shows something completely different. Just confused as to what needs to be looked at first.
    {{ DiscussionBoard.errors[8672816].message }}
  • Profile picture of the author Rbtmarshall
    Originally Posted by zipper10 View Post

    I guess if my monthly advertising exceeded the profit then I would've had a loss but I can't remember a month where I had a loss. I don't keep any inventory either. Web hosting and ads is really the only operating expense I have at this point.

    ...
    So, I take it this is not an actual retail business you are trying to sell, like you said it was.


    Originally Posted by zipper10 View Post

    ...

    I'm just reading all over about everything from selling at 2-4 times the average annual profit and elsewhere shows something completely different. Just confused as to what needs to be looked at first.
    what you are reading is bullcrap it seems.
    {{ DiscussionBoard.errors[8672835].message }}
    • Profile picture of the author zipper10
      It is. The only thing I really stock are small parts that get broken often die to the nature of the product. Otherwise most items go for $1k to $4k.

      What other data would I need for future reference?
      {{ DiscussionBoard.errors[8672867].message }}
  • Profile picture of the author Rbtmarshall
    What state is it registered in?
    {{ DiscussionBoard.errors[8672875].message }}
    • Profile picture of the author agmccall
      I have a online retail store. Last year a broker contacted us on behalf a very large retailer in our industry. We were not prepared to sell but we asked what the offer would be and was told it would be between 5 and 10 times yearly sales, possibly more depending on how bad the buyer wants the business

      al
      Signature

      "Opportunity is missed by most people because it is dressed in overalls and looks like work." Thomas Edison

      {{ DiscussionBoard.errors[8672918].message }}
      • Profile picture of the author Rbtmarshall
        Originally Posted by agmccall View Post

        I have a online retail store. Last year a broker contacted us on behalf a very large retailer in our industry. We were not prepared to sell but we asked what the offer would be and was told it would be between 5 and 10 times yearly sales, possibly more depending on how bad the buyer wants the business

        al
        ''sorry but if that was the extent of the offer, the person is blowing smoke up your ass.

        Since my home went off the market, brokers are contacting me all the time promising me the numbers I want. . Hyping their credibility in the industry. It's all BS, and it's because they want the exclusive listing. What I tell them is do not contact me for the listing, but if you;re really that good, contact me when you have a buyer and we can work out an agreement for your commission on that client.

        brokers are brokers, they are constantly looking for their commissions and will tell you what you want to hear in order to lead you into their sales funnel.
        {{ DiscussionBoard.errors[8672942].message }}
        • Profile picture of the author Vanilla Gorilla
          Originally Posted by Rbtmarshall View Post

          ''sorry but if that was the extent of the offer, the person is blowing smoke up your ass.

          Since my home went off the market, brokers are contacting me all the time promising me the numbers I want. . Hyping their credibility in the industry. It's all BS, and it's because they want the exclusive listing. What I tell them is do not contact me for the listing, but if you;re really that good, contact me when you have a buyer and we can work out an agreement for your commission on that client.

          brokers are brokers, they are constantly looking for their commissions and will tell you what you want to hear in order to lead you into their sales funnel.
          I agree. On average, I've seen sites sell for 3 months profit all the way up to 3 years profit. There is a wide margin in which you can work (depending on the site and the potential buyers).

          I have another question for the OP. Have you spoken to your supplier about this? You said that they aren't taking on any more retailers. Would they be cool with you transferring your site to someone completely new?

          Also, it seems as if there is a lot of work involved. You're not just dropshipping it per se, you are having the product delivered to your house first and then re shipping it. That may scare potential buyers off.

          Selling it while it's down is not the best strategy. Maybe have a huge blowout sale for black friday / digital monday to boost sales. Maybe do the same for December and January. When sales are up, unload it for a hefty profit.
          {{ DiscussionBoard.errors[8673086].message }}
          • Profile picture of the author zipper10
            Originally Posted by Vanilla Gorilla View Post

            I have another question for the OP. Have you spoken to your supplier about this? You said that they aren't taking on any more retailers. Would they be cool with you transferring your site to someone completely new?
            I have one potential buyer that is actually a friend of mine that's in the same business; the only reason why I found out about no new dealers. Which in a sense and I'm assuming would be easier than just selling the business to someone completely new.

            Originally Posted by Vanilla Gorilla View Post

            Also, it seems as if there is a lot of work involved. You're not just dropshipping it per se, you are having the product delivered to your house first and then re shipping it. That may scare potential buyers off.
            I did consider that; I'm sure that will be considered as a risk to lower the sale price potentially?

            Originally Posted by Vanilla Gorilla View Post

            Selling it while it's down is not the best strategy. Maybe have a huge blowout sale for black friday / digital monday to boost sales. Maybe do the same for December and January. When sales are up, unload it for a hefty profit.
            I'll definitely consider that; this all came up last night because added stress and just trying to juggle family life. I'm at the point where I need to scale down or it's just not worth all the time and money while every free time seems to be going towards the business. At least for me family is more important
            {{ DiscussionBoard.errors[8673111].message }}

Trending Topics