Selling

9 min read

Future of your Shopify store: growth, exit, or autopilot?

Rudi Eihenbaums

May 31, 2023

Table of contents:

Every Shopify business owner faces the dilemma one day:

You've put in the hard work. Should you fuel up and journey into scaling your business? Or should you cash out and sell the store you've built? Or can you put it on cruise control — perhaps by employing agencies and contractors?

It's a complex choice, fraught with uncertainties, potential rewards, and an emotional undertow.

In an enlightening multi-part conversation between Nik Sharma, an e-commerce growth expert, and Keith Rabois, longtime VC, entrepreneur, and OpenStore’s CEO, Rabois sets the tone:

“70% of people who run a Shopify business at some point want to sell their business, but only about 7% wanted to sell today.”

There you have it — this dilemma isn't exclusive to you; it's industry-wide. Most business owners constantly ask themselves:

Do my products have a future with changing consumer preferences? Am I keeping up with marketing trends? Am I using the right channels?
Can I count on my customers to come back?
Could my business handle scale? Will it thrive or collapse under increased demand?
Is my lifestyle true to my personal goals and ideals? Does investing more years give me joy or jitters?

Sell, scale, or sabbatical?

Your store isn't just a business; it's your brainchild, a labor of love that you've built from scratch. Selling it off is not a decision to take lightly. The everyday stresses of running your store — inventory management, customer service, marketing, the list goes on — can also weigh you down.

This brings us to an interesting paradox: you might not want to run your store indefinitely, but you're also not sure if you’re ready to sell it off just yet. Keith relays the experience of Shopify founders:

“They don't want to run it for 40 years, they don't have a family member to take over the business.”

Pros and cons of continuing to grow your Shopify store

Positive outcomes from growing a business are what keeps entrepreneurs in the game, for example:

Increased revenue from expanding your product range, volumes, pricing changes, or a larger customer base.
Pride and recognition for growing your brand; plus more visibility, loyalty, and trust from customers.
Stimulating problem-solving around operations, marketing, building a larger team, or tapping into new markets, customer demographics, and countries.

The main challenges:

Increased workload with administrative tasks, customer service demands, logistical complexities, and risk of burnout. For example, managing marketing agencies across multiple channels can contribute to exhaustion. Or as your customer base grows, it can be harder to maintain a personal touch.
Reaching an upper limit of potential growth due to market saturation or financial constraints.
Need for continual innovation to stay competitive: constantly needing to update your products, logistics, marketing strategies, and customer experience.

Resources for successful e-commerce

We’ve compiled the top resources on how to grow your Shopify store and improve its potential. OpenStore’s number one tip: invest heavily into customer acquisition and making logistics smoother.

Tip: take on big brands with pricing & quality

Keith Rabois recommends thinking ambitiously and taking on targeted customer segments of big incumbent brands.

"I actually think that longtail products are better than a lot of mainstream products."

Being the top 20th to 30th brand in your space still means you can compete with the best by delivering value. For example, Jack Archer, a successful OpenStore brand, does this by offering Lululemon-quality apparel at two-thirds the cost:

“I think that's a better value proposition for most Americans. Not everybody can just pay $86 for an expensive Lululemon t-shirt. We can deliver the same materials, same quality.”

How do you project your store’s potential growth?

“Efficiency. So the margin structure doesn't really matter, … project your cash flows and profits for the next year. Obviously, if you have a very large, very high margin, the cash flows on the same level of sales will be higher.”

Keith elaborates to take into account your customer acquisition costs (CAC) when extrapolating over the next one to two years:

“Some businesses are very different. Some are, you know, able to acquire customers at very low cost, that's rare. Some can acquire customers that you know, medium CAC, and that's common, and then some pay very high CAC and that's unsustainable.”

OpenStore runs the largest number of Shopify stores in the world, and when buying or managing Shopify businesses, Keith elaborates about the philosophy behind it:

“We are in the business of actually understanding accurately your business, rationally predicting the future, and then trying to beat it, we definitely want to beat our projections, like any company.”

Can you put your store on autopilot?

Growing a Shopify store can be like having a child, monitoring its health and making adjustments to help it grow. It can become an all-consuming, stressful task, particularly if your personal life is also clamoring for your attention. Health concerns, family needs, or simply a desire for a break — it's all part of the experience.

But what if you could take the stress out of the equation without giving up your store? That's where a solution like OpenStore Drive can offer real relief.

You're well-acquainted with the intricacies of your business and you likely have a clear vision of your store's future performance. OpenStore Drive takes this vision and offers a way to realize it without the associated operational stress.

Keith elaborates about OpenStore’s new offering:

“Usually people who are running a Shopify brand, have a pretty good context about what the next year is going to look like. They're pretty reasonable and rational, because they've been sweating their business for a while. They definitely know what their next month, their next quarter is going to look like. And so when we come in and say, ‘yeah, we agree, we'll give you that money, no strings attached’, they're in heaven.”

Watch the full answer:

‍OpenStore Drive offers the opportunity to put your store on autopilot for 12 months while guaranteeing you the same income you were making while running it. This way, you can focus on the other important aspects of your life without sacrificing your business.

Pros and cons of selling

Let's unpack this decision with three main potential benefits of selling:

Immediate financial gain with a lump-sum payment.
Freedom to pursue other projects: time and resources for your next idea. Or you could leverage your expertise to provide consulting services to other Shopify store owners.
Stress reduction: juggling numerous responsibilities such as inventory management, marketing, and customer service.

What are the potential downsides of selling?

Breaking an emotional connection, the feeling like you’re giving away a part of yourself, and adjusting to a new lifestyle post-sale.
Loss of steady income coupled with potential concerns stemming from unrealistic expectations around market valuation of the business (more on that later).
Missing future growth opportunities if your store is on an upward trajectory.

How many Shopify owners want to sell their store?

Out of the estimated 2 million Shopify store owners worldwide, about 70% are interested in selling their business at some point. Keith elaborates:

“30% believe that they're gonna own the business forever and want to own the business forever. And that's perfectly fine. But the other 70% are the ones we’re giving options to.”

Resources for selling

To facilitate a smooth selling process, we have compiled a wealth of resources discussing:

Case studies:

Meeting founders’ expectations on business value

Nik Sharma, a founder and entrepreneur himself, shares his view on expected growth trajectories:

“So if somebody were an entrepreneur, and they sell, let's say, boots, on Shopify, they probably read consumer or industry press headlines, and they think, you know, I'm gonna launch this boot company. It's gonna be on Shopify, I’m gonna use Facebook ads. And in four, five years, I'm going to sell this thing for $10 or maybe $50 million dollars. Obviously, I think that is super unrealistic.”

Keith continues:

“So there's approximately 2 million folks around the world who started a Shopify store. My estimate is that about 30,000 of them break one million dollars in sales. It's about the same odds of being selected to play in the NBA. I'd like to buy them all or work with them all.”

Is there a golden metric to measure a Shopify store’s future value?

“No, we extrapolate from the historical track record, and we project forward a year or two. But each business has a very different trajectory. Some are, for example, at a million dollars and still growing rapidly. Some are $2 million, and are flatlining, some are even decreasing in sales. So all of those have different potential.”

Sell vs. Drive

OpenStore acquisition offers a straightforward exit strategy for Shopify store owners who are ready to move on. The sale process is straightforward: a two week, hassle-free acquisition.

You receive 80% of the agreed amount at the closing, followed by the remaining 20% after a two-month transition period. No further time investment is required from you after the sale. All the details and post-acquisition management are handled by OpenStore.

Alternatively, if you're not quite ready to part ways with your store, OpenStore Drive offers a unique opportunity to maintain ownership while offloading operational tasks. Secure a predictable income for 12 months, all the while maintaining ownership of your store. OpenStore’s team of e-commerce professionals manage your store, allowing you to be free from daily operational stressors. Zero time investment.

Emotional & financial aspects

There are many considerations to weigh against one another:

Satisfaction from seeing your business grow
Pride in creating a sellable asset
Stress from workload
Emotional toll of parting with your business
Immediate financial gain vs. the potential long-term income
Impact on personal finances
Reinvestment opportunities after selling
Potential risk and rewards of store growth
Impact of timing and market conditions (don’t wait, here’s why)

It’s not an easy decision, but consider a free, no-obligation offer in just a few steps.

How much time will I need to invest?

Zero hours once you’ve sold your store.

Nik Sharma asks about OpenStore Drive, “How often am I talking to OpenStore? Who do I talk to? Am I texting this person?” and Keith elaborates:

“There is a point person assigned to you. We do quarterly reviews. In addition, merchants can request to have read access to their accounts and if they want to log in. Most don't, they sit back and just get their money. But for those who want to be actively tracking they can.”

What happens to my third-party tools?

Under both options, your store’s marketing, payment, inventory, and fulfillment are transferred over to OpenStore’s systems.

For example, Nik and Keith discussed what happens to a Shopify founder’s Klaviyo account or their third-party logistics (3PL) provider. When selling, it’s a 100% transfer, but Keith elaborates about OpenStore Drive:

“There is one caveat that sometimes we will leave the inventory in your current 3PL. Our system can integrate with many 3PLs. So that's on a case-by-case basis: just on inventory with 3PLs.

On other plugins and payment service providers, ‘buy now pay later’, email marketing with Klaviyo, and stuff like that it'll be transferred.”

What kind of stores does OpenStore buy and manage?

Keith elaborates on OpenStore’s requirements:

“We endeavor to mirror the entire horizontal breadth of the Shopify ecosystem. So that can be apparel... drones... our first supplement product... we have furniture...”, and so on.

OpenStore values all e-commerce verticals.