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In this article I’m going to tell you what is an e-commerce broker? An e commerce broker or e commerce brokers is someone who helps in the sale of businesses. This includes the marketing, presenting of the business, communication, negotiation, due diligence and closing the deal.
I’m George Moulos from Ecommerce Brokers, I’m an online business broker that has been helping people build, buy, and sell online businesses for over a decade and we’ve sold millions of dollars worth of online businesses and helped our clients acquire millions more with our buyside program Elite Acquirers (you can read more about that here: https://ecommerce-brokers.com/gold)
We also have videos about building, buying and selling online businesses on YouTube coming out every week and you can Subscribe Here!
I’m going to take you through what an e-commerce broker is and how they work and at the end of the article I’ll give you my top tip for finding the best e-commerce broker.
1. What is an E-commerce Broker?
A e-commerce broker is someone who helps in the sale of businesses. This includes the marketing, presenting of the business, communication, negotiation, due diligence and closing the deal.
These e-comemrce brokers either work as solo operators or as part of a larger brokerage. Generally, there are not many highly experienced brokers in the world with millions of dollars worth of completed deals that have been doing their job for many years and so the top brokers and
are highly sought after. Evidently, at Ecommerce-Brokers.com, we put ourselves in this category.
Experience
Since E commerce Brokers has been operating for 11 years we have seen many people attempt to operate as online e-commerce brokers but they usually last only a couple of months. This is because you must have ample ecommerce experience to start as an e-commerce broker and also have an extensive network. Not to mention the fact that in starting the process of being a e-commerce broker there will be a series of months where you don’t earn any money until your first successful close and commission. This is the period most people cannot make it through. But for sellers and buyers this is a very good thing!
For e-commerce brokers who have been around for a long time and have been consistently selling businesses for years, like George Moulos at www.ecommerce-brokers.com who has been selling businesses for over 11 years, buyers and sellers can be assured they are getting the best service possible from the most experienced people.
2. E commerce Brokers:
Online business brokers, like myself and my industry colleagues, usually have multiple years of ecommerce experience in building, buying and selling brands, just as we do at Ecommerce Brokers with 11 years of business building, buying and selling experience. This means e-commerce brokers have personal and specific insight into the businesses they list, which means they can more thoroughly sell and market their listings to buyers. This is the main shortcoming of investment bankers and standard brick and mortar business brokers.
3. How Do E commerce Brokers Work?
To keep it simple, they work on commission! That’s how you know if a E commerce brokers is good or not to earn a living as a broker, especially over many years you need to be selling businesses consistently as if you don’t sell, you don’t get paid and make a living.
Some E commerce brokers, who are inexperienced or new to being online business brokers may charge you an upfront fee for listing with them as well as commissions. This is a major red flag. Not only is that not industry best practices but it is indicative that they want to be paid for the attempt of the sale not the sale itself and that they cannot maintain their own business with their selling skills. Major red flag! Best to stick with a broker who has a competitive commission rate and no other fees.
4. What Should I Expect From an E commerce Broker?
First you need to find the right e commerce broker. I’ll give you my top tip for finding a good e commerce broker.
Once you’ve found the right e commerce broker you will sign an exclusivity agreement. This agreement protects you and the e commerce broker as it ensures that if they find a buyer for you and they help you close the deal they will in fact get paid. It also protects your businesses confidentiality and limits the time they can work for you. On average most exclusivity agreements last for 6 to 9 months which takes into account the organizing of the listing information which can take from as little as a few days to 2 weeks.
Marketing Process
Then comes the marketing process where the e commerce broker will go out and actively look for buyers. Across the top 10 online e commerce brokers this usually takes 1-3 months. The strength, growth, sustainability, age and profitability of the business massively determines if the business will sell fast or not.
That being said, over the next 30-60 days of listing buyers will come in and the online business broker will liaise with these buyers, negotiate price and terms and come to you, the seller with their offers and information. These buyers should all be under NDA while viewing your confidential business information. Then comes the buyer, seller and broker calls. On these calls you as the seller will be getting to know the buyer and answering a series of questions about your business. The online business broker will prepare you for these calls prior.
After a few calls like this with different buyers you and your e commerce broker will decide on the strongest buyer and move forward on an agreed upon price and terms. This final negotiation step is where online business brokers really earn their money.
5. Best Online E commerce Brokers: Negotiation
On average at Ecommerce Brokers we successfully increase the sale price of a business during negotiation by up to 35% and are able to strike very favorable deal terms for sellers. This type of negotiation really only comes with experience in buying and selling online businesses for over 10 years. If your online business broker is negotiating 20-35% more money for your business and only charging 10% on average their services are more than worth it!
After this you’ll sign an LOI, complete due diligence and the e commerce broker will help with the closing of your business through legal and funds transfer. After this the e commerce broker gets paid their roughly 10% commission.
6. What To Look for in an E commerce Broker?
- You need to ensure that your online broker has owned and operated online businesses before otherwise they will struggle to fully understand and serve you as a client. Someone who doesn’t have ecommerce experience likely does not have the knowledge or network required to get your business sold!
7. Should I use a E commerce Broker?
Yes! If you are looking for an online business broker look no further as Ecommerce Brokers is here for you. Follow this link and we can get your business listed and a valuation within 24 hours.
8. How Do I Choose An Online Business Broker?
Base your decision on the experience, testimonials and successful exits of the e commerce broker. Book a call with a broker here.
We also have videos about building, buying and selling online businesses on YouTube coming out every week and you can Subscribe Here!
Now I have a question for you. Would you use an online online business broker? Let me know in the comments below
Author Bio: George Moulos
Forbes 30 Under 30 2020, CEO of Ecommerce-Brokers.com
I own an online M&A firm called www.Ecommerce-Brokers.com and we have 11 years experience helping buyers and sellers acquire and sell millions of dollars worth of online businesses.
Looking To Buy? Visit our Elite Acquirers buy side broker service to learn more here
Looking To Sell? Visit our List With Us page to learn more here