Shopify just launched an exchange on their platform that allows Shopify store owners to sell their online business. They gave it the clever name of “Exchange”.
Maybe the name is not that original, but the concept is pretty interesting. How many people may lose interest in their store or have a life event that no longer allows them to operate an online business?
Shopify thinks there is a market for selling online businesses and with over 200 stores already listed for sale, they appear to be right.
The Shopify Exchange is also categorizing stores by industry. At launch, the following industries are available:
- Fashion & Apparel
- Gifts & Collectables
- Sports & Recreation
- Starter Stores
- Health & Beauty
- Toys & Games
- Electronics & Gadgets
- Food & Drink
- Home & Furniture
- Art & Photography
- Books & Magazines
- Construction & Industrial
I WANT TO BUY A STORE – HOW DOES IT WORK?
As a prospective buyer you can browse through the Exchange to find a store you are interested to purchase. Once you find something you like, you contact the seller directly through the contact form.
Now you can discuss with the seller all the relevant business details. Of course, buying a business requires a lot of due diligence, so you should consult an accountant or attorney to help you with this process.
To help make a good decision, Shopify provides sales and traffic data on the store you may be interested in. This way you get an independent confirmation of traffic and gross sales.
But as most business owners know, there is much more to running a business. Therefore it is important to ask the right questions and get all the important data to evaluate the business.
Shopify also states that with a transfer of ownership, as a buyer you are expected to receive all associated digital assets, supplier contacts and social media accounts. Again this needs to be confirmed with the seller.
There is no dedicated payment method for the store purchase, so Shopify does suggest an Escrow service to finalize the transaction.
And the company does not appear to make a commission on the sale, so they must see this as a way to keep stores (and fees) open.
I WANT TO SELL A STORE – HOW DOES IT WORK?
Only open stores can be sold. If you closed the store, you must re-open the store with an appropriate Shopify plan.
To sell a Shopify store, you will need to install the Exchange app on your store and create the listing. Your listing should include important details such as:
- The type of products you sell
- Do you carry inventory or drop ship or both?
- The work you have done sofar. If the store never made any sales, is it ready to go?
- Links to your social media and describe any marketing you may have done
Basically the idea is to provide a potential buyer with all the basic information so they can consider your store.
Of course, if you are selling a thriving business and are asking for more than just a “start-up” store price, you will need to be prepared to provide tax returns and other relevant documentation typical for selling a business.
STARTER STORES, A GOOD IDEA?
Shopify added a category Starter Stores to their Exchange directory. This includes stores that are mostly available for prices you would pay a developer to create a store for you.
There could be bargains here if the seller did some legwork to create social media accounts and has supplier information or even opened supplier accounts.
While Shopify makes it sound easy to get going with stores offered in Exchange, any such purchase must include proper research on your part. Maybe some of the less than $500 stores are worth the bargain if the graphics and templates are setup.
If you want to learn more about Shopify’s Exchange, click here for their Exchange directory. You can even sign up to get the latest websites for sale sent to your inbox.
The fact that Shopify is validating traffic data and gross sales information makes this an intriguing option for anyone looking to buy an existing online business.
Would you like to see other platforms or marketplaces setup a similar service? Let us know in the comment section below.