EcommerceBytes-Update, Number 267 - July 25, 2010 - ISSN 1528-6703     2 of 8

Think Ahead before Selling Your eBay Business

Email This Story to a Friend

There are a variety of reasons why an online seller may wish to close his or her business - retirement, family or health issues, or a career change. You may have time to wind down, or circumstances may force you to suddenly close shop.

Thinking about your "exit strategy," even if you have every intention of operating your business for many years to come, can help you to get the most out of a business you've spent years building. And planning ahead can be especially useful for eBay sellers, who face special challenges when selling their business.

Plan Ahead
When David Yaskulka sold his ecommerce business in 2006, he had been laying the ground work for about 3 years. "Everything we did was focused on the goal of selling the business," he said. As owners of Blueberry Boutique, David and his wife Debbie tried to build a high-profile business and worked on getting noticed by potential acquirers. The company was profiled and quoted in magazine articles and books about eBay, and David actively networked with other online sellers.

Yaskulka advises sellers to think about the most likely acquirer - it could be a larger competitor, or a complementary business. Or, it could be a company similar to yours but with no current eBay presence. Companies who want to liquidate problem assets or see eBay as a philanthropic vehicle (through eBay Giving Works) may benefit from your eBay-selling experience.

eBay Roadblocks
Be aware that selling an eBay business has special risks - eBay makes it very difficult for sellers to transfer their eBay User ID to another owner. eBay spokesperson Johnna Hoff explained, "As a general rule, we do not allow users to transfer eBay user IDs. It's important to understand that this helps protect the reputation a seller has built and the integrity of our feedback system. In relatively rare situations that involve the sale of an entire business, we may give consent to a seller to transfer the user ID connected to that business. We consider these requests on a case-by-case basis and work with the requestor on the specific requirements of the transfer process."

However, Ms. Hoff declined to explain how sellers would submit such a request, stating that it was such a rare occurrence that eBay did not publish any sort of contact. "Rather, we consider these cases if they arise, which is quite infrequently."

Assets Beyond Branding
While you may think your brand is your most important asset, Yaskulka said that's not always the case. A potential acquirer looks at your company's assets as well.

A good example, said Yaskulka, is a devoted customer list. eBay affords you a number of ways to build a list, though he says that may have changed since his days of selling on the marketplace. Building an opt-in email mailing list can provide you with a valuable asset, but acquirers will look beyond the mere size of a list to see if your customers are engaged.

"If you have 1,000 people in your mailing list, but only have a 1% open rate, that could be viewed negatively," Yaskulka said.

Acquirers may also be looking at a turnkey solution. If you offer multi-channel options, and have developed infrastructure and software to push to multiple channels, another company may see that as a great benefit to their own business.

Building Career Skills
Selling your business is not the only way to leverage the hard work you've put into building your eBay or online business, Yaskulka said. Sellers should think about their eBay careers as another paid position.

"Your goal may be to put yourself in a better position to get another job," he said, and said sellers should think of their eBay careers as paid position. Use that experience to put yourself in a better position to land another job.

Think far in advance, Yaskulka advises. Once you figure out what position you may be looking for, determine where your skills are lacking compared to other candidates, and then figure out how your eBay business can demonstrate your proficiency in these skills.

"I'm a marketer," Yaskulka said, "I needed to demonstrate my marketing skills." (After his employment contract at the new owners of Blueberry Boutique, he landed a position as Vice President of Product Marketing at Kompolt. He's now Vice President of Marketing Communications at HALO, Purely for Pets.)

But eBay businesses also allow you to build skill sets in bookkeeping, inventory management, software systems, and a wide range of potential positions, including those requiring broader corporate management and experience hiring and managing staff.

"eBay allows you a chance to strut your stuff in an area of your own choosing."

Be Flexible
Your business may be relatively small, especially when it comes to mergers and acquisitions. That's why it's important to think creatively about what you might offer an acquirer - and what they may offer you.

"A company might offer you an employment contract instead of money, or they may buy your inventory at favorable terms," Yaskulka said.

Resources
A lot of information about selling a business can be found online (see Barbara Weltman's two-part series in AuctionBytes - link), and your local librarian may be able to point you to some resources as well. Here are some additional articles you may find helpful:

"How to Sell Your Business," New York Times - Link

"Getting Out of Your Business," CCH Inc. - Link

"Selling A Business: What You Put In is What You Get Out," About.com - Link


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


You may quote up to 50 words of any article on the condition that you attribute the article to EcommerceBytes.com and either link to the original article or to www.EcommerceBytes.com.
All other use is prohibited.