Practical Ecommerce

How to close a website business

It’s a sad fact that not every website business can successful. Many ecommerce merchants close their websites out of exhaustion, loss of interest, insufficient capital, demand, revenue, or customers — or some combination of these. I have just gone through this challenging process for my own website.

Like many other online retailers who’ve been drastically affected by Google’s changing algorithms, I undertook a wide range of improvements with suppliers in an attempt to forestall closing my website.

Once you’ve decided to close down – and you’ll have to be resolute as you may receive pleas and suggestions for your continued business – you should allow at least three months to notify all parties, honor contracts, and deal with incomplete business transactions.

1. Check Contracts with Agents, Manufacturers and Suppliers

You may have contracts requiring from 30 days to three months written notice to cancel. Many agents may require you to honor outstanding orders. You may have standing orders that can be cancelled. Alternatively, you may have signed contracts locking you in for monthly payments for up to a year, whether you close down or not.

2. Notify Customers, and Accept Final Orders

In your first message to customers regarding your closure, title it something like “June newsletter – and farewell.” Provide a short paragraph concerning your closure process and any steps regarding final orders. Schedule a final email promotion to customers 2-to-10 days before your closure to give them time to make their final orders. I received a flurry of orders in my final two days, and several after the site had been closed down. Many customers will appreciate you giving them a chance to redeem their unused gift certificates, for example.

3. Request (Partial) Refunds

Check your suppliers’ terms. You may obtain pro-rata refunds for unused services, including business insurance, search engine optimization, hosting, email marketing, research, or monitoring services, for example. I scaled back my Survey Monkey service level to the free Basic level, will approach site speed service Yottaa for a pro rata refund, and will eliminate dozens of duplicate lists to reduce the monthly cost of my Campaign Monitor email marketing database.

4. Sell Materials and Equipment

You may make money from selling excess products (whether at fire sale prices or not) and your shipping materials. You may have a stockpile of empty archive boxes, courier satchels, padded and paper envelopes, bubble wrap, packing peanuts, tape, or shrink-wrapping materials in salable condition. In a total closedown, you may also choose to sell your desks, office chairs, printers, photocopiers, PCs, and laptops.

5. Sell or Reuse your Database

Depending on the size and target market of your database and your privacy policy, you may earn some money from selling your customers’ contact details to a list-buying company, or to a competitor if you do not intend to remain within that industry. If you have sufficient information about the suitability of your customers, you may be able to market to them with your next online business.

6. Check Domain Expiry Dates

If you have several domain names, check when they expire. If your goal is to cut costs, and they will expire within the next couple of months, let them lapse. If your domain is rare, high ranking, or could be valuable to another company, and if it has at least a year’s expiry, consider selling it on a domain sales website like Flippa.

7. Manage Social Media and Blogs

You may have to close down your Facebook, Twitter, Pinterest, YouTube, and Google+ business accounts or you may be able to direct your fans and followers to new social media accounts. If you intend to open a new website, you may need someone to create these accounts for you and populate them with new content. You might repurpose your blog posts for a new website, or perhaps, sell the content.

8. Manage your Email Addresses

When you finalize your website hosting, keep your existing business email address for your website until your domain expires or is sold. Your customers will identify – and more readily accept – messages from this familiar address than a brand-new one if you plan to launch a new business. You can expect to hear from several customers who will remain unaware that you have closed your business for several months afterwards, and you may want to redirect them to your new website.

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Comments ( 2 )

  1. Carlos Rivera June 12, 2014 Reply

    Sadly, I have had to close a website recently. I can verify that this article serves as great checklist for the process that I hope nobody has to go though! :)

  2. Elizabeth Ball June 20, 2014 Reply

    Thanks Carlos, I think many retailers have had several online businesses before finding the right model for success.

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