Valuing your ecommerce business doesn’t have to be a mystery.
In fact, most of the questions I get have straightforward answers. The challenge is finding them without wading through broker jargon.
Here are 15 FAQs, answered clearly.
Quick Answers (Top 5 Most Common Questions)
1. What’s my ecommerce business worth?
Annual SDE × 2.5 to 3.5. That’s the range for most established stores. Exceptional stores push higher; struggling stores go lower.
2. What’s SDE?
Seller’s Discretionary Earnings. Net profit plus owner salary, one-time expenses, and personal perks. It’s the real cash the business generates.
3. Why do multiples vary?
Risk. Predictable businesses (high LTV, diversified traffic) get high multiples. Risky businesses (single-channel, low LTV) get low multiples.
4. How fast can I sell?
30-90 days is typical. Amazon FBA sells faster. Shopify takes longer due to tech transfer.
5. Where do I start?
Get a free valuation here. It gives you a realistic starting point.
Advanced Valuation Questions
6. How does age affect value?
A store with 3+ years of consistent revenue is proven. It has survived seasonal cycles and platform changes. Younger stores are riskier and get discounted.
7. What’s more important: revenue or profit?
Profit. Always. A store with $500K revenue and 5% margins is worth less than a store with $200K revenue and 30% margins.
8. How do I value my inventory?
At cost. It’s sold on top of the earnings multiple. Dead stock or slow-moving inventory is worth less.
9. Does branding matter?
Yes. A distinct brand with loyal customers is defensible. A generic store is easy to replicate and worth less.
10. How important is my email list?
Very. An engaged email list driving 20-30% of revenue is worth $1-$3 per subscriber. It’s one of the most valuable assets a Shopify store can have.
Timing & Process Questions
11. When should I start preparing?
90 days before you list. Clean books, boost LTV, diversify traffic, document operations. Every improvement increases your sale price.
12. What documents do buyers want?
P&L statements, tax returns, bank statements, traffic analytics, inventory records. Clean, matching documents speed up due diligence.
13. Can I sell a declining business?
Yes, but at a discount. Buyers look at trailing twelve months. If revenue is sliding, they’ll offer less—or walk away entirely.
Risk & Red Flags
14. What makes a business unsellable?
- No profit: Buyers buy cash flow.
- Platform bans: Amazon suspensions or ad account bans.
- Legal trouble: Lawsuits, IP disputes.
- Complete owner dependence: No team, no SOPs.
- Fraudulent traffic: Inflated numbers that don’t hold up.
15. How do I make my business sellable?
Build an asset, not a job. Diversify traffic, document operations, delegate tasks, and focus on repeat customers. Businesses that run without the owner get the highest multiples.
Know Your Number Before You List