How to Build an Ecommerce Business with the Intention of an Exit

According to data from Statista, ecommerce will account for almost one-quarter of all retail sales worldwide by 2026. Even more impressively, the average order value in online retail is going up. Ecommerce AOV displayed a 7% growth between 2021 and 2022 (reaching a value of $121), an indicator that consumers are more willing than ever to shop online. Even for big-ticket items. To any entrepreneur looking at the data, it’s clear that starting an ecommerce business is a superb investment.

But whether you’re building your first, second, or fifth ecommerce site, you’ll likely want to do so with the intention of a profitable exit. After all, who would give up on the opportunity to cash in on all their hard work, free up precious time for rest, or minimize their involvement in a project so that they can focus on new challenges?

Well, if you’re building an ecommerce store and intend to sell your business down the line, there’s one thing you need to do. You must ensure all facets of your company drive value and contribute to a profitable exit. 

So, if you’re ready to put in place systems that will yield exceptional returns, here are the things you need to do to ensure the future of your endeavor.

Ready to exit your Ecommerce business?

Read our guide to selling your Ecommerce business here.

Build a Large and Active Social Media Presence

Consumers use social media more than ever. We know that they’re using it to stay in touch with friends and family, consume content, or find inspiration for things to do. On top of that, research shows that the role of social media in the shopping process is growing too.

According to Sprout Social, 68% of consumers made at least one purchase directly from social media in 2021. And the trend isn’t slowing down either. According to the resource, 98% of buyers plan to use social networks to purchase products this year. 

With this in mind, it’s only logical that your social media presence should be large and active. And even if you don’t plan on implementing social commerce right from the get-go, you should still invest a solid amount of your resources into social media marketing. Especially considering that 26.2% of people used social media to discover products in October 2022.

However, churning out content (or concentrating solely on follower numbers) isn’t enough to set your ecommerce brand apart from your competitors. Or to attract investors once you’re ready to exit. 

Instead, focus your energy on producing and publishing posts your target audience will see as delivering unique value. Moreover, do your best to encourage engagement. Try to inspire your followers to share your posts or recommend your products to their friends and family. This will show future ecommerce business owners that yours is a strong brand that’s not only popular but has plenty of growth potential left too.

For an example of a brand doing social media right from a sale exit perspective, check out the sports nutrition business ATH. 

This brand doesn’t reserve its social media feed for just promotional content, knowing that such an approach is more likely to result in an unfollow than a conversion. Instead, it uses platforms like Instagram and YouTube to build a community, listen to its target audience, and create content that resonates with its potential buyers. 

The result of such an approach is a large number of followers (a metric guaranteed to be a valuation driver during the future sale process). But, much more importantly, ATH also has an impressive engagement rate, with each post attracting the attention of fitness enthusiasts, maximizing their chances of becoming customers and brand champions.

Build Social Proof From the Start

In ecommerce, reputation is everything. 

A recent survey from Digital shows that, when shopping online, 54% of people read reviews for everything they buy. Moreover, 26% of consumers make online purchasing decisions based on good reviews. Couple this with the fact that 39% of online shoppers need to know a brand has more than 100 reviews to perceive it as trustworthy, and it quickly becomes evident that you absolutely must build social proof for your ecommerce store. 

If you intend to make a sale exit, understand that building social proof from the very moment you launch your business is crucial. 

Leaving this activity for later won’t just diminish your store’s ability to convert web visitors into buyers (automatically harming your KPIs). It will also create extra work for you down the line, as generating reviews after years of selling without them is a challenging and resource-intensive task.

Fortunately, however, there are relatively easy and effective ways to obtain and display reviews from the moment your ecommerce business goes online:

• Ask buyers to send feedback once you know they’ve completed their shopping experience or received their item. For example, take a look at how the F1 Store does it.

• Respond to and share any instance of customer-mention you receive. Surveys have shown that 60% of people consider UGC the most authentic type of content, making it a valuable source of social proof for your brand. An excellent way to make the most of user-generated content is to show it off on your homepage. For example, here’s how Ruggable did it:

• Incentivize your customers to provide feedback with a discount or free shipping codes or the opportunity to win valuable prizes (though you should note that paying for reviews isn’t allowed by some sales platforms, like Amazon).
  
• Make sure you always reply to the feedback you receive (be it positive or negative). This will show your audience that you care about their experience. Plus, it will make your customers more likely to send feedback, knowing it’s being heard and valued.
  
• Don’t limit yourself to only displaying product reviews. In some cases, feedback that describes a great customer experience with your brand is even more valuable than one that only says that the solutions you sell work/are of high quality/etc.
  
• Don’t forget to display customer feedback in a highly-visible place on your ecommerce website. Take inspiration from brands like Dress Forms USA, which showcases user feedback in the hero section of the homepage, where they’re guaranteed to be noticed by all web visitors.

Get Your Brand Featured in the Press

Receiving PR in conventional and digital media can hugely impact your business valuation. In fact, something as elementary as a tweet from the right (or wrong) person or an article in a newspaper can make company stocks soar or dive, testifying to the power of media mentions in determining the sale potential of your ecommerce business.

To most start-up entrepreneurs, this may sound intimidating. After all, it’s scary thinking that a random publication has the power to make or break your business. But here’s the deal: getting positive PR is not as difficult as you think.

By publishing press releases, reaching out to journalists and local news stations, or even using the right hashtags on social media, you can attract the attention of relevant publications and get your business featured. In fact, if you’re active on Twitter or Reddit, you’ll notice that journalists often ask for brands to get in contact when they have something noteworthy to share. And there are even platforms, like PR Newswire, dedicated to helping brands distribute press releases.

Another thing you can do is seek out guest posting and speaking opportunities with blogs or podcasts that hold authority in your niche. This will hugely ease your attempts to reach a large audience. And, seeing that the people reading/listening to these outlets already consider the source credible, that credibility will also be applied to your brand.

Whenever you land a press feature, don’t forget to show it off on your website. The most basic way to do this is to showcase the logos of trusted publications that have written about your products, like on the Mous homepage.

But, of course, you can also go with something more impressive, as done on the Bay Alarm Medical website. This ecommerce brand includes a TV spot video on its homepage, which aired on NBC Today, and is guaranteed to impress the brand’s target audience and potential future customers.

Focus on SEO

High-quality traffic is one of the key valuation drivers for ecommerce brands. In fact, future investors are guaranteed to go through your website’s capability of attracting visitors with a fine tooth comb before they decide whether to purchase your ecommerce store.

Knowing this, it’s essential that you invest in SEO. Here are a few of the best practices you need to stick to when doing this:

• Optimize your website for speed and mobile traffic. 
• Produce content targeting keywords your audience is likely to search for. 
• Format blog posts with H1, H2, and H3 heading styles (and include images) to boost your chances of winning the Featured snippet section on Google. 
• Maximize traffic diversity by creating powerful link magnets. And;
• Do your best to obtain traffic from multiple sources — yes, this means guest blogging, sharing content via social media, being active on discussion forums like Quora and Reddit, and actively working to direct as much traffic to your ecommerce store as possible.

Focus on Improving Critical Ecommerce Metrics

When evaluating an ecommerce business for purchase, most investors will look at a few critical performance metrics. 

So, if you want to sell your store and score the biggest payout possible, you’ll need to work on and improve these KPIs. Taking the time to do this will not only ensure better sales while you’re still in charge but also allow you to attract a higher offer down the line.

Generally, there are three main ecommerce metrics you should focus on improving.

Cart Abandonment Rates

The truth about online shopping is that a very small percentage of people who visit ecommerce stores actually buy something. 

According to the Baymard Institute, the average cart abandonment rate in 2022 is almost 70%. So, knowing that future investors will be looking at this metric, you’ll definitely want to do something to lower cart abandonment.

The best way to do this is to study why people don’t go through with their buying journeys. Generally, they abandon their carts due to a lack of trust, unforeseen extra costs, slow delivery, and sellers asking for too much personal information. The good news is that addressing these conversion obstacles doesn’t have to be challenging.

For instance, if you check out the Columbia website, you’ll notice that the checkout page features several conversion-driving elements that prevent cart abandonment. These include:

• a highly-visible phone number that allows prospects to contact customer service
• an invitation for web visitors to join the brand’s loyalty program, which offers free shipping and cashback
• a delivery section in the order summary that makes it easy for people to see how much they’re paying for shipping
• an estimated tax section, which further prevents extra cost surprises
• an element pointing out that customers can pay in interest-free installments
• the option to check out as a guest or with PayPal
• a trust badge communicates that the payment is encrypted
• a list of accepted payment methods
• a link to the brand’s Return Policy

Sales Conversion Rates

The second key ecommerce metric you must optimize is your sales conversion rate. 

As of August 2022, the average CR in online stores is 1.62%, which shows that more than 98% of the people visiting your website end up not buying. 

But, by doing something as simple as educating yourself about the most common conversion killers on websites (generic CTAs, slow load times, inadequate product explanations, substandard social proof, and selling functionality rather than value), you can address these issues. 

Moreover, by continually making website improvements to boost CRs, you are guaranteed to see a stable conversion rate (or witness sustainable growth), which will lead to a better valuation once you’re ready to sell. 

Of course, increasing conversion rates doesn’t have to mean sticking to a generic product page design. To see an example of a business doing things its own way, check out the Happy Socks website. 

First and foremost, this particular brand makes web visitors more likely to convert into buyers with a pop-up offering 10% off. Secondly, the page includes genuinely helpful product info, high-quality product photos, an easy-to-use size guide, and a handy accessibility feature. 

All of these guarantee a superb user experience, which is directly related to conversion rates in ecommerce.

Average Order Value

Lastly, as you explore opportunities to build a thriving ecommerce business that will attract valuable offers from potential investors, don’t forget to dedicate some time to increasing the average order value in your store.

Essentially, this metric tells a lot about your business’s profitability. A high AOV indicates that your store can convert customers, that you know how to inspire people to spend more than they originally planned, and that your operational costs are as low as possible. 

And the great thing is, boosting AOV isn’t too difficult a task. By implementing cross-selling and upselling features or bundling products — like Peloton did — you can easily encourage web visitors to spend more and impress potential investors once you’re ready to sell your business.

Never Stop Building Your Email Subscriber List

In today’s day and age, email is often considered a passé form of communication. But here’s the deal. Although investing in social media marketing and SEO delivers exceptional results in attracting visitors and increasing conversion rates, email still outperforms both communication channels when it comes to the metrics that truly matter.

Email is a super-affordable way to stay in touch with an audience that’s genuinely interested in your brand’s products. More importantly, research shows that email was the top-converting traffic channel in 2021, with a median conversion rate of 21.8%.

With this in mind, you should explore ways to continue building your email subscriber list, as this will be a valuable resource both you and any future investors will be able to use to ensure growth (and survival) for your brand.

One of the most effective ways to get more email subscribers includes offering discounts or free shipping in exchange for subscribing to your newsletter. You could also experiment with exit-intent pop-ups, encourage sing-ups during checkout, or run giveaways. 

And, if you want to take things to the next level, you could even create a find-your-ideal-product quiz. Check out how Tortuga did it, prompting users to provide an email address before presenting them with the results.

Make Sure the Business Can Operate Effectively Without You

When starting an ecommerce website, the most likely scenario is that you, as the owner, will be wearing many hats. After all, building a business from the ground up requires a high level of involvement. Especially as hiring can be outside your budget (at least in the beginning). 

But here’s the thing. When assessing ecommerce businesses for acquisition, most investors don’t want to spend their money on a full-time job that’ll require them to do everything to keep things going. 

They’ll want to acquire businesses capable of operating with minimal involvement or, alternatively, those with highly-capable management who will absorb owner responsibilities after the acquisition process is finished.

With this in mind, approach the business-building process knowing that you might want to make a sale exit.

For example, in some ecommerce niches, creating a first-class product necessitates close owner-supplier relationships or a high level of expertise. So, to secure a profitable exit, you have to ensure that the brand will be capable of continuing its work after you’ve left. This could mean one of two things. 

On the one hand, you could hire a superstar management team that will be involved in running smoothly from the very beginning, making the ownership transition seamless from your customers’ and partners’ points of view. 

On the other hand, you could approach the ecommerce building process by clearly defining the parameters for success and writing an operations manual as you go. This approach will ensure that any future owners have a document describing and explaining key processes that have secured the success of your brand so far and can simply continue implementing (or improving) existing practices.

Build Multiple Sales Channels

In 2022, consumers no longer want to be limited to shopping at a single location — online or offline. In fact, according to a recent report from Salesforce, 78% of people used multiple channels to start and complete transactions in 2022.

With this in mind, it’s easy to conclude that building an ecommerce business capable of attracting high-value investor offers necessitates an omnichannel commercial presence.

The good news is that building and standing out on multiple sales channels is easier than ever. Ecommerce brands can create branded stores on Amazon (after all, 63% of people start their product searches on the platform). They can also employ social commerce features on networks like Facebook, Instagram, Pinterest, or TikTok.

For instance, if you check out the Olaplex Instagram feed, you’ll see that the brand regularly tags products in its posts (be they commercial, educational, or simply entertaining). And while this makes it easy for followers to learn more about the products themselves, it also acts as a valuable source of traffic for the business. 

By clicking on the “View on Website” button, leads in the mid and bottom stages of the sales funnel are sent to a relevant product page. Once there, they can instantaneously convert, reducing the number of touches the brand requires to make a sale and minimizing Olaplex’s marketing costs by opening up space for retargeting strategies.

Make Sure Your Finances and Accounting Practices are in Order

Lastly, as you explore ways to build an ecommerce store that will attract a generous offer once you decide to make a sale exit, don’t forget that investors will be looking under the hood when assessing your organization.

For this reason, you must do things right from the start — especially when it comes to your finances and accounting practices.

• Adhere to the Generally Accepted Accounting Practices standards and ensure your books and financial records are in order. 
• To make bookkeeping easier (and to ensure a smooth transition), consider using accounting software such as QuickBooks.
• Understand the financial aspects of your business. This includes your sources of revenue, operating expenses, etc. Remember: potential buyers will ask for this information, so have it ready.
• If you run multiple businesses, don’t commingle their finances.
• You’ll also need to keep track of all relevant financial documentation, including monthly bank statements, credit card statements, inventory, and shipping invoices. Whether you do this online or offline is up to you, but know that taking a few minutes per week to do so will be far easier than taking on the task when the time comes to sell your business. Plus, diligence will prevent oversights or mistakes that could harm your organization’s valuation.

In Closing

If you’re starting to build an ecommerce business, the strategies outlined in this guide may sound like overkill. After all, perfect is too often the enemy of good.

Nonetheless, considering that you’re approaching the process with the intention of a sale exit, it’s worth taking a little bit of extra time to ensure things are running smoothly from the moment you launch. 

Doing this will allow you to attract better offers from investors once you’re ready to sell. But more importantly, it will permit you to get the highest returns on all your work and effort, maximizing your profits while you run and after you sell your ecommerce store.