5 Key Metrics To Monitor When Preparing Your Ecommerce Business For Sale

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Putting up your eCommerce business for sale can be both rewarding and anxiety-ridden. After all, not only is it the culmination of years of effort and toil from your side, but it also comprises various stages and associated steps to be followed. But, if you are patient enough and willing to follow the best practices diligently, you can look forward to the promise of lucrative returns by the end of it. 

Some of the prominent stages involved in listing your eCommerce business for sale include:

  1. Clarifying your goals and objectives
  2. Preparing your eCommerce business for sale 
  3. Carrying out a valuation for your eCommerce business for sale 
  4. Choosing the medium and platform for selling your enterprise
  5. Identifying buyers
  6. Negotiating the terms of the sale

Our topic today falls under the purview of stage 2, ‘Preparing your eCommerce business for sale’. This is a vast step and includes 2 key aspects: 

  • getting your financials in order
  • gather your customer and traffic data

5 Key Metrics To Monitor

While evaluating our eCommerce business for sale, prospective buyers will be highly interested in knowing its current financial health, operational performance, and future growth prospects. These are vital inputs in preparing their business case and deciding on an investment budget. To get a higher business valuation and make the opportunity more exciting for potential investors, you need first to gather all the financial statements and performance metrics of your business. Let us take a closer look at the key performance indicators (KPIs) that you should consider.

  1. Cost per acquisition (CPA)

The eCommerce segment is a competitive one with millions of stores across various platforms vying to get the attention of customers. Naturally, attracting customers to your offerings requires a fair bit of marketing and technical impetus. The Cost per acquisition is a metric that helps you know how much you’re paying for acquiring new customers.

It takes into account all your marketing investments such as mailers, social media, and paid search campaigns, that are intended to drive traffic and boost sales. A high cost per acquisition is a flag that you need to reconsider your content marketing strategy to reduce costs, conduct more targeted research to reach your audience, and optimize your costs while gaining a higher number of new customers.

  1. Average order value (AOV)

After all, all your marketing and other efforts are aimed at generating sales. The average order value of the items bought by customers in one order is an important KPI that measures the efficacy of your marketing activities and gives you the opportunity to upsell or cross-sell products and services.

  1. Cart-to-order conversion rate 

Cart to order conversion rate is expressed as the percentage of customers that complete a paid order after having added items to their shopping cart. It measures how many people start browsing items in the catalog, and actually finish the checkout process resulting in sales. You may also choose to track the Sales Conversion rate,  which is the total revenue divided by the total number of sessions carried out by customers in your store.

  1. Shopping cart abandonment rate

The opposite of the abovementioned cart conversion rate is the abandonment rate of items on your eCommerce business for sale. This metric can help you identify any glitches in your site, inventory, or cart that are hindering a smooth checkout process for your customers.

  1. Refund and return rate

With refund and return rates we complete the entire e-commerce lifecycle commencing from customer acquisition, abandonment, and sales, to post-sales. A high return and refund rate can put a dent in your net sales and also lead to a tarnished brand image, both of which will lower the market valuation of your eCommerce business for sale.

In Summation

There are several other operational metrics that you can measure and monitor as a way to gauge the performance of your eCommerce business for sale, like website traffic, source of access, customer retention rate, customer lifetime value (CLV), social media engagement, and so on. 

The process of measuring your business performance gives you the opportunity to identify existing gaps and areas of poor performance. These can then be plugged in before you actually list your eCommerce business for sale, thereby increasing its appeal and value in the minds of prospective buyers. Do remember to set a frequency for the measurement of appropriate metrics (such as daily, weekly, fortnightly, monthly, quarterly, etc). Moreover, you can make use of one of the several paid and free-to-use KPI analytics tools that will not only monitor your metrics but help you derive meaningful insights from them. This, in turn, will help you develop strategies to optimize the performance of your eCommerce business for sale, and assist you in getting the best returns upon selling it.

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