Buying and selling eBay Businesses


  • Share on Tumblr

Is it possible to sell an eBay business?  Why would you sell an eBay business if it is making good money? How much is an eBay business worth?

These are 3 questions which come up regularly and to answer the first question, yes, you certainly can sell an eBay business.  However there are a few things sellers need to know first which I will cover below.

So why would someone sell an eBay business which makes good money?

Just like a lawn mower business is simply a collection of clients, branding and a certain methodology, an eBay business is just a collection of “individual” products, branding plus a methodology”.  80 products can give a 1 million dollar turnover. Let me explain.

Let’s say an eBay business has 80 products.

Each product sells for an average price of say $67 and costs $20

Each product sells on average 15 times per month.

That is 80 x 15 = 1200 sales per month

1200 * 67 = $80,400 revenue per month

$80,400 * 12 = $964,800 per annum revenue

And the great news is there are tons of products out there which are already proven and already making high profits today so you can just keep adding more products to your business.

So why sell an eBay business which is making good profits?

Just like the owner of a lawn mower business may prefer to find more clients and sell off the runs for profit, the same can be done with eBay businesses.

There are plenty of cashed up buyers out there who are not prepared to start a business from scratch and will pay a premium for an established business.

An eBay business can be sold for anywhere from 1 x the years profit to 4 x the years profit.

i.e. If the business makes $250,000 after all expenses over the last 12 month period, it can be sold for $250,000 to $1,000,000

The 1 to 4 variable is how well you can prove the business works without you, it’s branding, and how well the buyer can envisage the future growth will be without you i.e. your methodology.

To get the maximum money for an eBay business, you should plan your exit strategy as soon as possible.  Building an exit strategy also has a secondary bonus of teaching you to build a business which does not require you, ultimately giving you more time.

Things to consider when creating your exit strategy

  1. Build procedure manuals for every task.  Buyers want to be able to duplicate what you have done.
  2. Make sure your accounts are kept up to date.  This is so much easier to do these days with accounting systems like Xero which makes it so easy.
  3. Build a brand name by using the same logo, fonts, icons etc in every listing including your website if you have one.

Be aware that selling an eBay business has special risks – eBay makes it 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.”

I have never had a case where eBay would not allow the sale of a business… however beware.

If you have an eBay account now and sell in all different niches, consider taking the products of a particular niche out (say gardening products) and put them all in a new eBay account.  Then this niche can be built up and sold off as a separate entity.

For eBay sellers interested in this strategy, I suggest to them opening a second eBay account as soon as possible and only do their purchasing through it for now until they are ready to use it.  This way they will have an established eBay account which has 100% positive feedback.  (Sellers are only allowed to leave positive feedback).

They should also try to channel their purchasing to eBay as much as possible. I don’t mean purchasing items they were not going to purchase anyway, they should just consider purchasing what they were going to purchase from the local mall through eBay instead.  Generally it is cheaper with more variety and it gets delivered to your door!

The great thing with this strategy is you can keep your main eBay business for “cash flow”, and sell off the niches for “Capital”.

 

To your Success

signature
Neil Waterhouse

  • Share on Tumblr
This entry was posted in eBay Tips / Strategy, Importing, Internet Marketing, Mindset. Bookmark the permalink.

7 Responses to Buying and selling eBay Businesses

  1. Rex Elleray says:

    Hi Neil
    You have mentioned elsewhere the guideline of a minimum profit of 50%.
    Is that 50% after purchase (and associated costs) AND paying all selling costs?
    In your example above you mention selling for $67 and buying for $20.
    That represents 70% profit. Is $20 the total cost for acquisition and sale, or merely the FOB price?
    I’m asking so that I do not set unreal expectations for myself.
    Thanks for the continuing supply of practical educational gems.
    Regards Rex

  2. Charlene Chirum says:

    You must of read my mind….10 years of selling on eBay and I am working now on branding my name and moving my other products to a new eBay seller’s account and focusing on my main one to brand and sell in the future…Thank you for this great information.. Charlene

  3. Deborah Metcalfe says:

    Hi Neil…I’m one of your “newbies” and recently had a very frustrating experience with opening a 2nd ebay acct that was probably a “technical glitch” but problematic. Wondering if it’s happened to anyone else or if you have any suggestions on how to fix it.

    I’ve been a 10 yr buyer but only recently started selling. I changed my user id to my business name to make it look more professional as a seller and to begin this “branding” process. Then I opened a 2nd ebay acct to keep my personal purchases separate. When you open a new acct, ebay initially assigns you a user id, then you are prompted to change it to whatever you prefer. When I clicked through to the page to change my new user id from what they assigned to what I preferred, somehow I was taken to that page in my business account. (Perhaps because I was using the same computer I always use?) I did not notice I was all of a sudden in my business acct because I did not expect that to be the case. So I changed the user id to one I preferred for my personal acct, thinking that’s where I was. I did not realize until it was too late that I had just changed my user id in my business acct. Of course there is the 30 day wait period before you can change it again. I tried contacting two different people at ebay to explain the situation but they both said there was nothing they could do about it. So now I have to wait the 30 days before I can change it back to my business name, and I’m not even sure you can use one that’s been used before. (???) Do you know if there’s any way to fix this? In the meantime, a word of caution to everyone: Be careful when you open new accts that you aren’t flipped back into your old one before you realize it!

    Thanks!
    Deborah

  4. Deb says:

    Hi Deborah
    It’s a simple mistake anyone can make. You had not signed out of your ‘business’ account before initiating the changes, so ebay applied the changes to the ‘wrong’ account. I have 6 ebay accounts, and whilst it used to be a bit of an issue in the early days it is much easier now, especially since I installed CookieSwap, an extension that is compatible with Mozilla firefox web browser. It’s worth a try.

  5. ed says:

    Hey Neil,
    This is Ed. I am currently a co-owner of 5 eBay stores myself. I have a partner that has 2 in his name and a partner with one in his name. I am buying out the entire corporation with my mother and was wondering how to make the transfer of the other 3 eBay businesses into our names. Is it as simple as changing all the addresses, passwords, emails on eBay or is there anything i should know. Regards, Ed

  6. Louise says:

    Hi Neil
    Do you tend to keep each business as a separate sole trader entity to sell and transfer or is it easier to do as a Pty Ltd?
    I’m reluctant to incorporate a company due to the overhead but wonder if it makes it an easier package to transfer down the track.
    Thanks

Leave a Reply

Your email address will not be published.

GET EBAY SUCCESS NOW

Absolutely no spam!

Free Download

Get eBay Success Now. Learn how to get automated eBay sales 24/7 365.

banner

Select