“What’s my business worth?”
It’s a simple question with a complex answer. But after analyzing hundreds of ecommerce deals, the same patterns emerge.
Here are the 15 questions I hear most—and the answers you need.
Quick Answers (Top 5 Most Common Questions)
1. What’s the typical sale price?
Most ecommerce businesses sell for 2.5x to 3.5x annual SDE. A business making $100K/year typically sells for $250K to $350K.
2. Is my business worth more if revenue is growing?
Yes. Growth commands a premium. A store growing 10% month-over-month can sell for 3.5x to 4.0x, even if current profit is modest.
3. What’s the biggest factor in my multiple?
LTV (Customer Lifetime Value). Repeat customers are the single biggest driver of valuation. Stores with high LTV sell for premiums.
4. How do I know if my asking price is realistic?
Compare your SDE and multiple to similar businesses that have sold. If comparable stores sold for 2.8x and you’re asking 4.0x with no justification, buyers will walk.
5. Can I get a professional valuation for free?
Yes. Get your free valuation here. It’s based on real market data, not guesswork.
Advanced Valuation Questions
6. How does owner dependence affect value?
Dramatically. A business that needs you 50+ hours a week is a job. A business with a team and documented processes is an asset. Assets sell for more.
7. What’s the ideal traffic mix?
Diversified. Organic search, email, direct, social, and paid all contributing. If one channel dominates, that’s a risk. Buyers discount risk.
8. How do I calculate LTV?
Average order value × purchase frequency per year × customer lifespan in years. Example: $50 × 4 × 2 = $400 LTV.
9. Does a subscription model increase my multiple?
Yes. Subscription revenue is recurring and predictable. Buyers love predictability. Subscription stores often sell for 3.5x to 4.5x.
10. What if my margins are thin?
Thin margins mean less room for error. Buyers worry that rising ad costs or fees will wipe out profit. Aim for 60%+ gross margins on Shopify.
Timing & Process Questions
11. When is the worst time to sell?
When revenue is declining. Buyers notice trends. A downward trajectory signals problems and leads to lowball offers.
12. How long do negotiations take?
Typically 1-2 weeks after the initial offer. Due diligence adds another 2-4 weeks. The full process usually takes 30-90 days.
13. Should I accept an earn-out?
Earn-outs tie part of the sale price to future performance. They can work if you trust the buyer and believe in the business. But they add complexity and risk.
Risk & Red Flags
14. What should I never hide from buyers?
- Account issues: Ad bans, Amazon flags, payment holds.
- Legal problems: Pending lawsuits, trademark disputes.
- Declining metrics: Traffic drops, rising CAC.
- Key person risk: If the business needs you specifically.
- Supplier issues: Unreliable or single-source suppliers.
Hiding problems destroys trust. Buyers often find out during due diligence anyway.
15. How do I build trust with buyers?
Be transparent. Provide clean financials. Document everything. Answer questions honestly. Buyers pay more when they trust the seller.
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