Our New Book Is Here! Getting Your Ecommerce Business Ready for Sale
Want to build a high-value company that buyers will battle over? Of course you do. Good news: we wrote the book on it. Literally.
January 31, 2022 Gwen Sylvester
Selling your ecommerce business is the second biggest decision you’ll make – after the one to start it. But when you’re ready to sell, one thing is certain: you want to do everything you can to make your business as attractive as possible to potential buyers.
But how do you do that exactly? Good question. That’s why we wrote a book about it.
Created by Thrasio’s in-house experts (the very ones who review businesses during due diligence), “Getting Your Business Ready for Sale” will help you build a stronger, more resilient brand – whether you’re thinking about exiting in the next few months, the next couple of years, or not at all.
With 50 pages of ideas and insights, our book is packed with tips for ecommerce entrepreneurs. Is that a lot? Yes, it is. But rest assured, you don’t need to act on all of it and you definitely don’t have to excel at every aspect of running a business before looking for a buyer. Our goal with this book was simply to help you build a stronger ecommerce company, one with staying power.
That said, if you’re methodical about getting your business ready, diligent about vetting the right buyer for you, and clear about your exit goals (all things we cover in this guide), you’ll likely increase the value of your business. That sets you up for an exciting, lucrative new chapter in your entrepreneurial adventure.
And when you’re ready to sell your business? We hope you’ll think of us. Check out our short course on the book’s key chapters below.
1. Brand Management: Focus on strategies that build solid foundations for your ecommerce business
A strong brand increases the appeal and value of your business to a potential buyer. But building a strong brand is about much more than what appears on your bottom line. At Thrasio, we like to see growth beyond the P&L – a customer base of hundreds of happy repeat buyers, for example, or a steady increase in keyword conversion share. Our new book covers 4 ways you can uplevel your brand management strategy, including why you should focus on high profit-dollar products and how you can improve your keyword conversion share.
2. P&L Statements: Pay attention to add-backs
Many aggregators, including Thrasio, will base their valuation of your business on your trailing 12-month (TTM)-adjusted EBITDA – that is, your Earnings Before Interest, Tax, Depreciation, and Amortization during the 12 months before you’re ready to sell your business. We’ll calculate your TTM-adjusted EBITDA by looking at your P&L and then adjusting for add-backs. However, we often find that sellers are unclear on what constitutes an add-back. Learn more about them in our book and use them to your advantage. You may be more profitable than you think!
3. Compliance: Get your products ready for the world
The regulations your products should meet can change in light of new scientific knowledge, shifts in the industry, or shifting government policy. That’s why it’s a good idea to weave compliance into the fabric of your business operations. Good compliance practices make your company better prepared to meet whatever changes lie ahead – they also make it easier to launch your products in global marketplaces. Up your compliance game and a buyer is better able to start operating and growing your business right out of the gate.
4. Intellectual Property: Manage your copyrights, patents, and trademarks
Taking steps to proactively document, manage, and protect your brand’s intellectual property (IP) can save you many headaches in an increasingly crowded marketplace. Gettinget your IP house in order has another benefit: it makes your business that much more attractive and valuable to a buyer. IP protections work best when you implement them early in your business-building journey and when you integrate them into your normal business operations. Don’t put your IP program off. Get in the habit of protecting the brand you worked so hard to create, and you’ll be creating more value along the way.
5. Supply Chain Management: Learn what makes a good supplier
Once upon a time, supply chain was a function that mostly functioned. Ecommerce owners could largely set it and (almost) forget it. Given the last two years of global chaos, that’s no longer the case. That’s why it’s critical to have great suppliers – and great supplier relationships, since your eventual buyer may inherit them. A responsive, reliable supplier makes your business much more attractive to potential buyers. We cover 6 qualities to look for in a good supplier in the book as well as ways to make your supply chain more resilient.
6. Customs & Duties: Be a stickler for the rules
Harmonized Tariff Schedule Codes (HTS) can have a huge impact on the bottom line and the overall valuation of your business. Because they’re applied individually to each product you sell, a wrong code can wreak havoc on your costs. If you haven’t focused much on tariffs in the past, it’s never too late to start. Whether you choose to invest your own time or hire outside help, the resources you spend today to ensure accurate codes will reduce your chances of problems down the road.
About the Author
Gwen Sylvester is the senior director of acquisitions at Thrasio. Gwen started her career in finance in a private investment office and then pivoted to corporate development, where she spent 8 years in the early childhood education space. Gwen lives in Portland, Oregon, and enjoys spending time in the great outdoors.