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How to devise an exit strategy from Day1?

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  • How to devise an exit strategy from Day1?

    Watched through Jason's recent interview and it got me thinking - a bunch of players in the affiliate game jumped on the eCommerce bandwagon in 2016 and the trend seems to be on the rise in 2017... they approach the eCommerce game much like they did affiliate marketing as in find profitable eCommerce "offers" by spying around the interwebs ---> brainstorm angles and slap up some landing pages ---> if the data seems right then buy a bunch of stock upfront and scale.

    But unless the margins are crazy high, it seems like a waste not to build up a brand..considering you have to deal with customer support, upfront sourcing, quality control, fulfillment and payment processing. Tons more investment and risk compared to your regular affiliate marketing game.

    Scenario 1: run high risk, high roi stuff and make 30 mil over the course of say 5 years = lots of cashflow, 0 assets
    Scenario 2 = run lower risk, lower roi stufff and make 10 mil over the course of 2 or even 3 years but then sell the company for 20 mil
    Wouldn't you pick Scenario 2?

    So, how to build up an eCommerce company from scratch having an exit strategy in mind from Day1? What books and resources should I study to better understand what buyers generally look for in acquisitions? Thank you for your attention!

  • #2
    Found a good list off Shopify: With that being said, what really makes your ecommerce business worth more is mitigating the risk of the business failing in the future by having the following characteristics associated with your online store:
    • Predictable key drivers of new sales
    • Stable or growing traffic from diversified sources
    • Established suppliers of inventory with backup suppliers in place
    • Traffic stats (Google Analytics or other) with a long history
    • High percentage of repeat sales
    • High percentage of repeat visitors
    • Clean legal history
    • Brand with no trademark, copyright or legal concerns
    • Documented systems and processes
    • Growth potential