Anyone who has experience in trying to sell ecommerce business knows that the process can become quite costly which is why most business brokers require an exclusive listing agreement.
As a website brokerage, we require all of our clients to execute an exclusive listing agreement that gives our firm the ability to sell your website without competing against other firms.
Typically exclusive listing agreements have a standard term of 6 months to a year because of the length of time it generally takes to complete the website sale process.
The primary reason business brokers require this type of agreement is because the representing firm has to invest a great deal of time, energy and money to successfully prepare your business for the market and effectively market your business to qualified buyers.
While an exclusive listing agreement may seem restrictive at first glance, if you are serious about selling your business, giving your business broker an exclusive on the business allows him / her to represent your business 100% and will ultimately result in a better deal structure than if you had several brokers trying to sell the same business.
Personally, I feel that any broker who is willing to take on a business listing without having an exclusive listing agreement should be avoided as it is a clear indication of their inexperience with M&A transactions. While many buyers are initially hesitant about locking up their business with one firm for 6 months, asking for references from former clients before signing should alleviate the concerns the seller is facing.
Ultimately it is important that you are comfortable with your broker as you will be working together over the next few months to find the right buyer. From the broker’s point of view, it is a huge good faith gesture on the seller’s part showing their commitment to representing firm and their trust in the broker to find the right fit for the business.