Can you tell the difference between virtual and reality? Do you feel like Neo from the Matrix sometimes, where you can’t tell the difference between reality and augmented reality?
The world of online retail is based on this very prefix. Let’s see what an e-commerce business is worth…
There are approx. 3 million e-commerce companies operating 20 million sites globally. The e-commerce sector is poised to hit over $1 trillion in revenue by 2022.
There are THREE TRENDS affecting this rapidly evolving business – 
Companies with revenue under $5M, are sold at 2-4x on SDE. Seller’s Discretionary Earnings. The range depends on – the quality of earnings, the stability of traffic, and efficiency of operations.
How to Maximize Value?
- Influencers – everyone is an influencer of some kind. Pastors, politicians, actors, radio jockeys, athletes, podcasters, bloggers. All of them have a tribe, and they all can help or harm an e-commerce business. The trick is to get on their good side when they are on the rise.
- Personalization – gone are the days of ‘you get what you see.’ Customers are now looking for a brick-and-mortar comparable experience when shopping online. That includes customizing merchandise, alterations, customer service, returns, and after-sales service.
- Artificial Intelligence – it is cool to now run a $10M business with only five people. Fewer the people, the more automation the better. Automation can be tweaked, purchased, and canceled. Hiring, training, and managing employees is a whole different skill set which many business owners do not have.
Companies with revenue under $5M, are sold at 2-4x on SDE. Seller’s Discretionary Earnings. The range depends on – the quality of earnings, the stability of traffic, and efficiency of operations.
How to Maximize Value?
- Focus on customer experience – virtual is reality – be there for your customer. They want to receive the same personalized experience they expect at a brick-and-mortar store. The closer you bring your website and customer service to that the better.
- Partnerships – drop shipping, returns, add-on services, keep them coming back to the website again and again. This will provide you steady monthly visitors, and repeat customers giving recurring revenue. Music to any buyer’s ears.
- Reduce owner involvement – owners that work less than 15-20 hours a week have really built a company. Owners working more than that have created more of a job for themselves. Create a company that can run in your absence. Automate processes. Hire remote customer service reps. Work with vendors and suppliers who will value your customers before their bottom line or their policies.
