How to Value a Dropshipping Store Business?

Reading Time: 11 minutes

Shopify allows you to build your online store. Why?

Your drop shipping website could be a valuable asset.

Drop shipping stores are an eCommerce business that uses a third-party platform (e.g. We show you how to create your own eCommerce store using Shopify. You can either process your own orders or cash out to sell your store. selling and buying websites is a great way to make a lot of money.

  • How do you sell your drop shipping company?
  • How do you determine the value of your website?
  • How do you know when it is time to sell your website online?

These are some of the most common questions people ask when looking to make money online. Many people are fortunate to have brokers who can lend a hand and keep the business secure.

Drop Ship Lifestyle recommends Empire Flippers. They are an Inc. 500 Company and the best curated marketplace to buy and sell established, profitable online businesses including drop shipping shops.

Empire Flippers has assisted people to buy and sell online businesses worth over $50 million. They have become a trusted friend and our top source when it comes to selling our members’ stores.

Their team has put together information to help you sell your store. Greg from Empire Flippers has written this guide on how to determine the value of your website. Greg of Empire Flippers has been with the team more than two decades and has seen more stores sold and bought.

Also Read  4 Best Shopify Developer Community Forums and Sponsorships

Let him do it…

What is the Value of Your Drop Shipping Website?

We would like to see the light at the end the tunnel, even though we are working hard on our drop shipping businesses. Most entrepreneurs should see the day they sell their business.

You might be asking why anyone would ever sell a profitable company if they are new to the business.

Drop shipping is not always easy, especially if you outsource. After everything is in place, you can scale paid traffic and test new products. You’ve acquired a variety of skills, including building eCommerce websites, finding lucrative products and mastering traffic.

Why sell?

It is clear that people sell businesses for many reasons.

Many people wish to reinvest their profits from selling their businesses into a new venture. You could reinvest in another business or start a new venture.

People sell their businesses to buy real estate properties. They also transfer their digital assets to physical assets. One seller even listed his business on Empire Flippers’ marketplace and used the proceeds to adopt a child.

Others might simply want to receive a large lump sum of money when they sell their business.

Drop shipping is a better option than other business models because it removes many of the difficulties involved in selling a business.

Also Read  10+ Best Shopify Theme for Subscription Boxes

You don’t have to manage inventory, unlike Amazon FBA or traditional eCommerce. Selling an online business is much easier because you don’t have to deal with inventory. You don’t have to maintain inventory and you also don’t need to do any warehousing. While you still need customer service for your shop, other than that, this is a significant advantage over traditional methods of selling physical products online.

Which type of payday do you envisage for your drop shipping company? How much capital do you have to reinvest in future investments, vacations or projects?

Similar to the reason someone might decide to sell a business. The answer to how much your business is worth is It all depends.

Continue reading and I will cover it in the next section.

How to get the maximum website value for a big exit with your eCommerce business

An eCommerce business that is profitable can make anywhere from 18x to 36x its net monthly income. It all depends on how much you want to sell, whether it is 18x, 36x, or somewhere in between.

The length of time your drop shipping company has been in operation is one of the most important factors that determines its value. The more time a business has been in existence, the higher its value. This factor is included in our free valuation . This tool is for those who need a rough estimate of the value of their website.

Also Read  Motorcycle Parts and Bike Accessories Dropshipping Service

Drop shipping websites are worth more when they have been around for five years and receive a lot of traffic from organic search. It has accomplished a few things well.

  • It has been through multiple Google updates, and continues to drive a lot of traffic to the site. This indicates that it is likely practicing safe SEO.
  • Drop shipping products don’t “fly by night” but are long-lasting enough to create a sustainable business.
  • Reliable dropship suppliers are important as it makes it unlikely that the business will survive if there are negative reviews about their products.

Net monthly income is the most important factor in determining how much your online business will be worth. After you have deducted all hard expenses, this is your net monthly income. Hard expenses include paid visitors and hosting costs. Everything you need to keep your business running.

This is important because not all expenses are hard. We’re business owners and buy things to make our business run more smoothly. It was then added to the business’ “expense” list, when it wasn’t necessary.

These expenses are known as addbacks. You should instead be adding them back to your business rather than using them for less income.

An example of an addback expense is buying a flight to Thailand to attend a networking event. It isn’t a significant expense for your company, and your business doesn’t need it. It is safe to assume that this expense would be an additional expense.

Also Read  Integrate Market Hero AutoResponder With Shopify

Shopify allows you to build your online store. Why?

Your drop shipping website could be a valuable asset.

Drop shipping stores are an eCommerce business that uses a third-party platform (e.g. We show you how to create your own eCommerce store using Shopify. You can either process your own orders or cash out to sell your store. selling and buying websites is a great way to make a lot of money.

My List

237 Profitable Product Idea Ideas

Register for my FREE training to learn how to dropship

Profitable and I’ll show you my 237 Profitable List

  • How do you sell your drop shipping company?
  • How do you determine the value of your website?
  • How do you know when it is time to sell your website online?

These are some of the most common questions people ask when looking to make money online. Many people are fortunate to have brokers who can lend a hand and keep the business secure.

Drop Ship Lifestyle recommends Empire Flippers. They are an Inc. 500 Company and the best curated marketplace to buy and sell established, profitable online businesses including drop shipping shops.

Empire Flippers has assisted people to buy and sell online businesses worth over $50 million. They have become a trusted friend and our top source when it comes to selling our members’ stores.

Also Read  4 Best School Products for Dropshipping and Suppliers

Their team has put together information to help you sell your store. Greg from Empire Flippers has written this guide on how to determine the value of your website. Greg of Empire Flippers has been with the team more than two decades and has seen his fair shares of stores sold and bought.

Let him do it…Table of ContentsWhat is the value of your drop shipping website? How to get the maximum website value for an easy exit with your eCommerce business. When to negotiate and when to walk.

What is the Value of Your Drop Shipping Website?

We would like to see the light at the end the tunnel, even though we are working hard on our drop shipping businesses. Most entrepreneurs should see the day they sell their business.

You might be asking why anyone would ever sell a profitable company if they are new to the business.

Drop shipping is not always easy, especially if you outsource. After everything is in place, you can scale paid traffic and test new products. You’ll have mastered many skills, including building eCommerce websites and finding lucrative products.

Why sell?

It is clear that people sell businesses for many reasons.

Many people wish to reinvest their profits from selling their businesses into a new venture. You could reinvest in another business or start a new venture.

Also Read  4 Best Wholesale Portable Power Bank Suppliers

People sell their businesses to buy real estate properties. They also transfer their digital assets to physical assets. One seller even listed his business on Empire Flippers’ marketplace and then used the proceeds to adopt a child.

Others might simply want to receive a large lump sum of money when they sell their business.

Drop shipping is a better option than other business models because it removes many of the difficulties involved in selling a business.

You don’t have to manage inventory, unlike Amazon FBA or traditional eCommerce. Selling an online business is much easier because you don’t have to deal with inventory. You don’t have to maintain inventory and you don’t need to handle logistics or warehousing. While you still need customer service for your shop, other than that you have an advantage over traditional methods of selling physical products online.

Which type of payday do you envisage for your drop shipping company? How much capital do you have to reinvest in future investments, vacations or projects?

Similar to the reason someone might decide to sell a business. The answer to how much your business is worth is… It all depends.

Continue reading and I will cover it in the next section.

How to get the maximum website value for a big exit with your eCommerce business

An eCommerce business that is profitable can make anywhere from 18x to 36x its net monthly income. It all depends on how much you want to sell, whether it is 18x, 36x, or somewhere in between.

Also Read  How to Import from Etsy To Shopify?

The length of time your drop shipping company has been in operation is one of the most important factors that determine its value. The more time a business has been in existence, the higher its value. This factor is included in our free valuation . This tool is for those who need a rough estimate of the value of their website.

Drop shipping websites are worth more when they have been around for five years and receive a lot of traffic from organic search. It has accomplished a few things well.

  • It has been through multiple Google updates, and continues to drive a lot of traffic to the site. This indicates that it is likely practicing safe SEO.
  • Drop shipping products don’t “fly by night” but are long-lasting enough to create a sustainable business.
  • Reliable dropship suppliers are important as it makes it unlikely that the business will survive if there are negative reviews about their products.

Net monthly income is the most important factor in determining how much your online business will be worth. After you have deducted all hard expenses, this is your net monthly income. Hard expenses include paid visitors and hosting costs. Everything you need to keep your business running.

This is important because not all expenses are hard. We’re business owners and buy things to make our business run more smoothly. It was then added to the business’ “expense” list, when it wasn’t necessary.

Also Read  How to Remove or Get Rid of Powered by Shopify Footer?

These expenses are known as addbacks. You should instead be adding them back to your business rather than using them for your net income.

An example of an addback expense is buying a flight to Thailand to attend a networking event. It isn’t a significant expense for your company, and your business doesn’t need it. It is safe to assume that this expense would be an additional expense.

Other than your net monthly income, there are many other factors that can increase the value of your eCommerce website.

  • Email list: When your business creates email campaign, and nurtures an email list, it is creating an asset for the buyer. Your business will have more value if it has a larger email list. It’s surprising to see how little attention is paid to this, despite the fact that internet marketing is all about “the list”.
  • Multiple Traffic Sources: Drop shipping stores that rely solely on SEO or only one type of paid traffic are not as “defensible” in the event of an emergency. While most businesses only have one source of traffic, we find that many other sources are worth looking into. This will make your business more resilient and adaptable, which makes it more valuable.
  • Traffic: Talking about traffic, the more you have the better. Your online business will be more valuable if you have more people visiting your site.
Also Read  Best CRM Tools for eCommerce Dropshipping Process

Maximal Website Value Doesn’t Mean That It Will Be Easier To Sell Your eCommerce Company

Selling a drop shipping company is more than just maximising your valuation. You could, for example, finish maximising your valuation by getting rid of a tool or system that you paid previously to increase your net income. Your business now takes you 50 hours per work week, instead of the previous 10 hours.

It is not something that anyone wants to do.

People want a business that’s as easy to run as possible. People are looking for systems and not jobs. This means that you need to have Standard Operating Procedures ( OPs ) for all you do.

This will help buyers have confidence in your online company.

They might be comfortable with the idea that they will have to test multiple new products per month if they can establish a consistent process for choosing new items for their website.

Do not reduce your expenses to increase your net income.

To make the business sellable, it’s better to have a lower valuation.

The Right Level of Support

Offering the right level of support will not only increase the online business’s value, but it will also help you sell the business. Most sellers offer support via email for 30 days and Skype calls for one hour per week to the buyer. This is usually fine.

Also Read  How High Will Shopify Stock Go? Predictions

However, you might want to offer more training if your business uses advanced strategies such as Facebook advertising. You may be constantly split-testing multiple campaign campaigns.

If a buyer is not familiar with Facebook, the prospect of running these ads well might make them feel intimidated.

You can reduce buyer fears by providing 30 days of training and support. This will make them more likely to purchase your website.

When to Negotiate Your Website Value & When to Walk

You will need to negotiate with potential buyers if your online business exceeds $75k. It is easier to negotiate larger deals.

Deal structuring becomes more important as deals reach $200k+. negotiations are becoming increasingly important.

Deal structuring is often referred to as the earn out. This refers to when the buyer pays a set amount and then pays the remainder over the next few month.

These are vital because financing in this space is still not available. Buyers have virtually no financing options.

Price is a sensitive topic. You should be open to adjusting your price relative to the value of your website.

A $200k drop shipping company should be willing to sell the business for $195k. A $50k dropshipping business should be more reluctant to sell for $45k.

Also Read  How to Remove or Get Rid of Powered by Shopify Footer?

You should set some clear limits before you start negotiations with qualified buyers. This is so that you don’t go overboard during your conversation with potential buyers. Here are some hard limits to keep in mind:

  • Hard sales price (how low can you go?)
  • Earn out hard (What type of earn out would it be)
  • How much down payment will you need to agree to an earn-out deal?
  • How much training and support are you willing to provide?

Keep a list of all these details so that you can refer back to them during negotiations.

Do you need a private deal or broker to sell your online website?

You have two options when it comes time to sell your online company: either via a private deal, or through a professional brokerage.

My bias is because I work for Empire Flippers. However, it is important to weigh the pros and disadvantages of private deals against using professional brokerage services like us.

Private sales can bring the seller more profit than selling through a broker. The seller will not have to pay commission fees.

Our fee is 15%. This means that a seller selling a $100k dropship business would receive the $100k instead of the $85k if they had sold through our marketplace. This is a major motivator, and the main reason people do private business deals.

Also Read  4 Best Shopify Developer Community Forums and Sponsorships

Private deals have many downsides. Online business sellers are often not able to reach qualified buyers and have no marketing tools in place to attract them. The seller could be in two different situations.

  1. They don’t get any offers and they never sell the business.
  2. Although they do receive offers, it is from people who offer far less than the market value of their business. Due to repeated lowball offers, the seller sells the business at a fraction of what they would have received from a brokerage. This includes the 15% commission.

Unfortunately, this second point is more common than you might imagine when someone sells their eCommerce business.

The seller doesn’t have any way to properly qualify buyers so they will keep getting these offers. They might start to believe that their business is worth less than the value we give them.

Unaware of the situation, the seller sells the eCommerce company for much less, and is disappointed. The buyer may be thrilled about the deal that they have just signed.

Transferring an online business to a new buyer

The actual migration process is another issue. How can you transfer an online company to a buyer?

While most sellers don’t know how the process works, it is possible for veteran sellers to find it tedious. A good brokerage can help with the process of migrating from the previous owner to the new owner. Sometimes, they even do it for them so they don’t have to worry about it.

Also Read  Best CRM Tools for eCommerce Dropshipping Process

Negotiations are perhaps the most important thing that a brokerage can do to help a seller.

Brokerages are devoted to deal making, structuring deals, and providing answers that overcome buyer objections. This skill is not something that many drop shipping business owners will have. This is a great value to quickly find a buyer .

What is the best time to sell your online business?

We’ve briefly discussed why people sell online businesses. But let’s talk about WHEN to sell your business.

Here are some points to keep in mind.

Is the business in an upward trend in terms of earnings and traffic? Are the earnings stable? These are both good times to sell your business. This is because it is when most buyers are most interested in purchasing an asset.

You should also do some soul searching. Are you feeling burnt out in the business? This is a great time to sell your business before you become too burned out.

Perhaps you have reached your business’s full potential. You might still see a lot of potential in your business. But maybe you don’t know how to make it happen and are unwilling to learn.

It is a great time to let go. This allows you to focus on other projects and gives the potential for the new owner the chance to grow.

Also Read  10+ Best Shopify Theme for Subscription Boxes

Focusing on other projects is another reason why many sellers sell their businesses. They are ready to invest large amounts of capital in another business. You might even consider another online business with greater potential. You can sell your existing business to expand it quickly.

Empire Flippers has helped people sell their businesses and trade their digital assets for physical assets such as real property. One seller even sold his business to adopt a child.

It all comes down to you.

Before you decide to list your drop shipping company on our marketplace, do some soul searching.

Are you ready?

If so, you could be looking at a big payday when you sell your drop shipping business.

Table of Contents