Valuing an ecommerce business isn’t rocket science—but it’s not guesswork either.
After reviewing hundreds of deals, the same questions come up again and again. Here are the 15 most common, answered directly.
Quick Answers (Top 5 Most Common Questions)
1. What is my business worth right now?
Calculate your annual SDE. Multiply by 2.5x for a conservative estimate. That’s your floor. Multiply by 3.5x for an optimistic ceiling. Your actual value sits between, adjusted for risk factors.
2. Why do multiples vary so much?
Because businesses vary in predictability. Predictable revenue (high LTV, diversified traffic) commands 3.5x+. Unpredictable revenue (one-hit products, single-channel) might only get 2.0x.
3. What’s the difference between Shopify and Amazon valuations?
Shopify stores typically sell for 2.5x-3.5x SDE because you own the customer data. Amazon FBA businesses sell for 2.0x-3.0x net profit plus inventory because Amazon owns the customer.
4. Do I add inventory to the sale price?
Yes. Inventory is sold at cost, on top of the earnings multiple. This is especially significant for Amazon FBA sellers with substantial stock.
5. What’s the fastest way to boost my value?
Improve LTV. Set up post-purchase email flows, add a subscription option, or launch a loyalty program. Even a 15% lift in repeat purchases can add six figures to your sale price.
Advanced Valuation Questions
6. How do buyers verify my numbers?
They compare your P&L, tax returns, and bank statements. If all three match, you’re golden. If not, expect a discount or a lost sale.
7. What are add-backs?
Expenses that won’t transfer to the new owner. Your salary, personal car lease, one-time legal fees. These get added back to net profit to calculate SDE.
8. Does a subscription model increase value?
Massively. Subscription revenue is recurring and predictable. Buyers often value subscription stores at 4.0x or higher.
9. How important is my brand?
Very. A recognizable brand with a loyal following is defensible. A generic store with no brand identity is easy to replicate—and worth less.
10. What’s a healthy gross margin?
Aim for 60%+ on Shopify. For Amazon FBA, 30-40% is typical due to fees. Higher margins give you more room to scale and command higher multiples.
Timing & Process Questions
11. When should I start preparing to sell?
At least 90 days before listing. This gives you time to clean books, boost LTV, and document operations—all of which increase your sale price.
12. What’s the typical sale timeline?
30-60 days for Amazon FBA. 60-90 days for Shopify. Clean financials and organized operations can cut this significantly.
13. Can I sell a business that’s losing money?
Rarely. Buyers buy cash flow. If your business is losing money, you might sell the inventory or brand assets, but the earnings multiple won’t apply.
Risk & Red Flags
14. What are deal-breakers for buyers?
- Unverifiable revenue: If you can’t prove it, it doesn’t exist.
- Account risks: Amazon suspensions, ad account bans.
- Legal exposure: Trademark disputes, IP theft claims.
- One-product dependence: Single SKU generating 80%+ of revenue.
- No team: Everything depends on the owner.
15. How do I make my business more sellable?
Focus on three pillars: Diversify (traffic, products, customers), Document (SOPs, processes, financials), and Delegate (hire a VA or team). Businesses that run without the owner sell for the highest multiples.
Find Out What Your Store Is Worth
