To get the best price for your e-commerce business, start preparing early. Get your accountant and your business lawyer involved, make sure you own and control your digital assets (your domain, online store, social media accounts and customer data), get your supplier, platform and team contracts in order, and have your sale contract ready before you start talking to buyers. Buyers will pay more for an online business they can take over cleanly.
If you're selling your e-commerce business, there are steps you can take to help maximise its value. The process can feel daunting, because there's a lot to know about the legal requirements you need to meet. Having a good team around you can make all the difference to your experience, and keep your stress levels low.
My number one rule: when you start thinking about selling your e-commerce business, talk to your business lawyer and your accountant.
Your accountant will help make sure your financials are in order. Together, your accountant and your business lawyer will help you get clear on what you're offering for sale, and work out a fair and reasonable asking price.
Your business lawyer will get your contracts in order (including a draft contract of sale, ready for enquiries from buyers), and make sure your other legal documents and requirements are up to date.
Getting your financials in order
Your accountant will help you get your financials in order, so you can make an informed assessment of what your business is worth. When you start talking to buyers, your financials will be ready to share during due diligence (under a confidentiality agreement, of course!).
For an online business, buyers usually want more than your profit and loss. Expect questions about your traffic, conversion rates, customer acquisition costs and repeat customers.
Clarity around what you're selling, and maximising value
Talking to your accountant and your business lawyer will help you get clear on what you're offering for sale:
What's included in your business, and where does the goodwill sit?
What stock, plant and equipment do you have?
What leases are in place, including any warehouse or storage space?
Do you own your domain name? You should, but it's not uncommon for business owners to find it's still registered to their web designer!
Can your online store, payment gateway, social media accounts and email marketing platform be transferred to a buyer?
Do you own your brand, product photos, website content and product designs? Is your brand registered as a trade mark?
Knowing these things early will help you arrive at, and maximise, your sale price. Knowing what you're prepared to accept, both on price and on the conditions of the sale, will help you be clear when you negotiate with buyers.
At this planning stage, it also helps to bring your legal and accounting team together. I often have a call with a client's accountant to work through the issues and agree a game plan. More often than not, we land on a plan that's in your best interests.
Ensuring your contracts, agreements and legal requirements are in place
Your business lawyer will make sure your contracts, agreements and legal requirements are up to date. For an e-commerce business, that usually includes:
Suppliers and manufacturers: review your supplier agreements, and check whether they can be transferred to a buyer.
Fulfilment and platforms: check your fulfilment, marketplace and platform terms (such as Shopify, Amazon or Etsy) allow the account or arrangement to move to a new owner.
Your team: employment contracts for your employees, and contractor agreements for your contractors, including who owns the work they've created for you.
Customer data: check your privacy policy allows customer data and email lists to be transferred as part of a sale, and that your subscribers opted in to receive your emails.
Your website documents: your terms of sale, refund policy and privacy policy should be current and comply with the Australian Consumer Law, so the buyer isn't inheriting compliance problems.
Policies and compliance procedures: make sure any your business needs are up to date.
Don't leave these things until the last minute. Loose ends cause delays and increase costs.
Preparing the contract of sale
Once you're clear on all of the above, and you've negotiated terms (and price!), your business lawyer can finalise your sale contract. For an online business, it should deal with the handover of your digital assets and logins, any training or transition period, and any restraint on you starting a competing online business.
Getting your business lawyer on board early means they know what you're planning, and can start preparing your sale contract. These things take time, so give your lawyer enough notice to have the contract ready when you and your buyer are.
Once the contract of sale is finalised, the remaining steps to close the sale are largely procedural, and your business lawyer can take it from there.
You've worked hard to build your e-commerce business, and you deserve the best possible price when it's time to sell. For the full step-by-step, read Selling your business: 6 legal tips to protect your sale. If you're thinking about selling, book an introduction call and let's put a plan in place.
This article provides general information only and does not constitute legal, tax or financial advice. Your obligations depend on your specific circumstances.
Frequently asked questions
What legal documents do I need to sell an e-commerce business?
You'll need a sale contract, plus up-to-date supplier, platform, employment and contractor agreements, and current website terms, a refund policy and a privacy policy. Buyers should also sign a confidentiality agreement before you share your financials.
Can I transfer my customer email list when I sell my online business?
Usually, if your privacy policy allows customer information to be transferred as part of a sale, and your subscribers opted in to receive your emails. Check this before you go to market, because it affects what the buyer is getting.
How do I make my e-commerce business more valuable to buyers?
Have clean financials and traffic data, own and control your domain, online store, brand and social media accounts, and make sure your supplier and platform arrangements can be transferred. Buyers pay more for a business they can take over without loose ends.
