Best practices for Exchange listings
Creating a listing is just like writing a description for your products. It's important to create a listing for your business that sparks the interest of buyers and help answer their questions. Your listing is ultimately what makes anyone thinking of buying a business decide whether or not to contact you and submit an offer when they're ready to buy.
A lot of the time people looking to buy a business have a specific idea for what they want, so creating a detailed and thoughtful description of your business helps them quickly decide whether your business is right for them.
The more information you include, the better your chances are of quickly finding a high-quality buyer.
Listings that get the most interest
Listings with a detailed and organized description have a better chance of selling on Exchange.
A professional listing that was written carefully performs better than a listing with missing information. To improve your listing, include information like why you created the business, why you're selling the business, and a summary of the work involved in running the business. For more information on creating a listing, refer to Creating your Exchange Marketplace listing.
If the sale of your Shopify business includes a custom domain, social media accounts, an email list, and personal support after sale, then you're more likely to find someone to buy it.
Make use of the screenshots in your listing. You can upload a maximum of ten photos. When you're selecting screenshots to use, consider what the buyer would like to know. For example, the photos can include ads that you've created and screenshots of your sales and traffic reports.
What to include in your listing
Not sure what to include in your description? Here are some ideas for things to include that are important to buyers:
- The story of your business. Why did you decide to start the business and how long have you been running it?
- What work have you already put into building your business?
- What's included in the sale? Aside from the business itself are there any social media accounts, inventory or domains that are included?
- Describe the business model. Do you dropship or hold the inventory yourself? Buyers want to understand how they can make money from this business.
- What is your average profit per month? What are your overall profit margins?
- Are you selling a mailing list?
- Describe your relationship with your suppliers.
- Which monthly Shopify subscription plan does your business use?
- What have you done to attract customers? Here you can describe your business's marketing strategies such as advertising campaigns, relationships with social media influencers, or successful email campaigns.
- What is your cost of customer acquisition? Here you can explain what it costs to generate sales.
- Do you have recurring customers? Businesses with loyal customers are attractive to buyers looking to get up and running immediately.
- Why are you selling the business? This helps buyers understand you and helps them trust whether your business is a good investment.
- How would you grow the business over the next five years?
- Are there any specific skills or knowledge that the new owner should have?
- Do you have any monthly software expenses?
- If you're a Partner who is selling a development store, consider including the storefront password in your listing so prospective buyers can view your store.
Adding Proof of Performance to your listing
Making your listing stand out is one of the easiest ways to quickly find a buyer on Exchange. An important part of your listing are the photos that you can upload to your Proof of Performance section. Always remove any personal or financial information that might appear in a screenshot before uploading.
Your Proof of Performance not only helps your listings stand out but also gives buyers the information that is the most important to them at a glance.
What to upload as Proof of Performance
People who upload at least 3 images to their listing have a much greater chance of receiving contacts from buyers. Avoid including screenshots that contain customer data like emails, names, and phone numbers. If you need help deciding what types of images you should upload, then here's what we recommend.
A screenshot of your Facebook ads manager.
Buyers want to know more information about your ad spend, the number of campaigns you run, conversion rates, cost per click, and so on. Facebook's Ad Manager offers great insight into how your business is performing. Uploading a photo of these stats greatly complements the revenue data that is automatically added to your listing.
Google Analytics reports.
Have an interesting Google Analytics report that you'd like to show off in your listing? Take a screenshot and upload it to your listing's Proof of Performance. Some examples of reports that buyers will find valuable before deciding to contact you are: your purchase funnels, conversion rates, and traffic over time. Uploading information from Google Analytics can help validate your business's performance in the mind of a buyer.
Reports from Shopify.
There are many valuable reports in the Analytics tab of your Shopify admin. Although Exchange automatically pulls your business's lifetime revenue and traffic information, there are other reports that make your listing appear much more appealing to buyers. Reports that might be useful include average order value, rates of returning customers, conversion rates, total orders report, and whichever other reports you feel could make your listing stand out.
Social media insights.
Both Instagram and Facebook have easy-to-access reports that show valuable information about your followers. Try uploading a screenshot of the engagement rate on your social pages, the demographics of your followers, and the reach of your social media content.
Create a listing that shows your business's best side while sharing the honest information that buyers need to make a decision about buying. If you have any other assets that you want to show off in your listing, try uploading them to the Proof of Performance section. Some possibilities are:
- Screenshots of positive customer reviews
- Mentions in blogs or from social media influencers
- Photos of media or press where your products have appeared in
- A photo of your warehouse or place of operations
Not sure how to create a screenshot?
Exchange automatically generates a screenshot of your online store for you. If you update your online store’s theme after the automated screenshot is captured, then contact the Exchange Marketplace support. Shopify can generate a new screenshot and upload it for you. You can request that the generated screenshot be updated, but it can't be removed completely.
To add images of your Proof of Performance you need to take your own screenshot. You can do this by either pressing Shift-Command-4 on Macs, or Alt-Print Screen on Windows.
Calculating your average monthly profit
Exchange automatically displays your business's lifetime revenue, but it's up to you as the person selling their business to let buyers know what your total profit is after expenses. Shopify does not calculate your costs for you, so it's a great idea to take the time to thoroughly calculate all the costs involved in running the business in your listing. This helps buyers see that you're a trustworthy seller who's fully prepared to hand their business over to the right buyer.
To start, you need to add up your monthly expenses. Your profit is your total revenue minus expenses. When calculating your expenses, make sure to include the following:
- price of your store's monthly Shopify subscription plan
- total cost of recurring charges for apps used by your business
- total amount you spend on advertising each month
- total cost of goods sold on an average month
- amount that you pay any freelancers or employees
Add up the total cost of these expenses and subtract it from your total revenue to get your profit amount.
Keep in mind that your average monthly profit is displayed on your listing to give buyers a rough idea as to how much it costs to run your business and how much they could make themselves. Including this information in your listing greatly improves your chances of finding a quality buyer.
Because this number is only an average amount, you should also be prepared for buyers who ask for more detailed information about your monthly expenses. It's always a good idea to prepare for this by generating a profit and loss statement. For more information, see Profit and loss statements.
Average profit margin
To give buyers a better understanding of your business's potential, you should include your average profit margin in your listing. This is the percentage of profit that you make after all your expenses are deducted from your total revenue.
The profit margin is displayed on your listing as a percentage. Although most business's profit margins vary month to month and product to product, you should give buyers an idea of what your total margins are on average.
To calculate your profit margins, calculate your profit (the sales you made minus all the money you spent running the store) and then divide that by the total amount you make in sales. After you have that, multiply that number by 100 to get the percentage.
Profit and loss statements
The Profits and Loss statements (P&L, Income Statement, or Statement of Earnings) is a summary of your business's total profits and expenses for a specific period of time. This statement gives you the bottom line profit or net loss of your business. It's important to let potential buyers know if your business is profitable, and if so, show them just how profitable it is. The Profit and Loss statement is the easiest way for someone that is interested in buying your business to understand this at a glance.
Generating a profit and loss statement
You can easily export and upload your profit and loss statement to your listings using an accounting software.
Both Quickbooks and Xero integrate with Shopify, letting you quickly calculate your business's profit and generate a P&L statement. Here are instructions on how to do:
Exporting a profit and loss statement from Quickbooks
If you use the Quickbooks integrated app for Shopify, then you can quickly export a profit and loss statement from your QBO account.
From your Quickbooks online account, click on the Reports tab then click the Profit and Loss link within your Business Overview reports. This opens your profit and loss report.
Inside the Profit and Loss report, there are options to filter the report by specific dates. Because Exchange displays your business's lifetime revenue on your listing, we recommend that you export a report that shows your profit and loss of the lifetime of your business.
Export your Profit and Loss statement as a PDF file so that it can be uploaded to the financial documents section of your Exchange listing.
Generating a profit and loss statement from Xero
If you've used the Xero app in Shopify to integrate your orders to the Xero accounting software, then you can quickly export a Profit and Loss report from Xero.
First, click Profit and Loss from the Reports drop-down in the main menu of your Xero dashboard. Select the timeframe for that you want your profit and loss statement to report. Because Exchange displays your business's lifetime revenue on your listing, we recommend generating a report for your profits and losses from the beginning of your business's lifetime.
Within the report, you'll see the option to export it. Export your report as a PDF file and upload it to the Financial Documents section of your listing.
Understanding your business's revenue data
The data displayed is gathered from full month periods only. The report updates automatically by the second day of each month to show the previous month’s data. If your business makes any sales while it is listed on Exchange, then the information doesn't contribute to your listing's revenue figures until the start of the next month.
If you notice that the revenue from your listing does not match other reports, then it could be because the revenue is updated at the beginning of each month. If you list your business midway through the month, the sales you make during that month won't be reported until the beginning of the following month. The sales that are calculated include only the information that is available to and can be verified by Shopify. Verified sales are orders that are made through Shopify that Exchange is able to verify.
Verified sales include sales made through your online store, the Buy button, Shopify POS, and Facebook Shop.Exchange also pulls revenue data from sales made through some third-party apps. Unlike the sales verified through the channels listed above, Exchange can't guarantee that the revenue generated through these apps is correct because it relies on third-party applications built outside of Shopify. These verifiable apps are:
- ReCharge Recurring Billing & Subscriptions
- Recurring Orders & Subscription Box App by Bold
- CartHook Checkout
- eBay LINK
- inkFrog Open
- Codisto LINQ
- Edit Order by Cleverific
Other than the channels and apps listed here, sales generated from a checkout system hosted outside of Shopify can't be verified.
The sales data on listings can't be modified. We recommend including information about third-party sales in your listing's description and upload any screenshots that might validate these sales.