I'm getting ready to sell my online store. It's been running for about 5 years, sells home goods, has steady traffic from SEO and repeat customers, but I've never touched social media. No Instagram, no Facebook page, nothing. A broker told me the lack of social is a red flag for buyers and will hurt the multiple. Is that true? How do I even price this thing without a social following to point to?
Valuation
How do I price an online store that has zero social media presence?
Your broker isnt wrong that that some buyers care, but it depends on the niche. Home goods buyers often search on Google or Amazon, not Instagram. If your SEO is strong and your repeat rate is good, that's worth more than a few thousand followers who never buy. Do you have the analytics to show where your traffic and revenue actually come from?
Zero social can actually be a selling point. It means the new owner has an untapped channel they can build from scratch. Frame it that way in your listing.
That's a good way to look at it. I do have analytics. Most of my traffic is organic search and email. Email list is around 4,000 subscribers. Not huge but they buy.
4k email subs with a decent open rate is more valuable than 40k dead Instagram followers. Buyers who know what they're doing will see that. The ones who don't will lowball you. Price on cash flow and traffic quality, not vanity metrics.
How would you even value the email list? I'm in a similar spot but my list is smaller. Do you just fold it into the overall multiple or break it out separately
Usually you fold it into the overall valuation. Breaking it out gets messy and buyers start arguing about churn. Just show the revenue it drives and let the multiple do the work.
I'd push back on the broker a little. A 5-year-old store with steady traffic and repeat buyers is a known quantity. That That has value regardless of social. The multiple might be slightly lower Than a comparable store with a big following, but it shouldn't be a huge discount. Get a second opinion if this broker keeps harping on it.
Appreciate that. I think I'll ask for the the breakdown of how they arrived at their number. If it's purely the social thing, I might look elsewhere.
One more thing. Make sure your P&L is clean and your traffic numbers are easy to verify. Buyers will forgive no social faster than they'll forgive messy books.