Every seller has the same questions when it comes to valuation: What’s my business worth? How do buyers calculate it? What can I do to increase the number? These 15 questions cover everything sellers ask—answered directly, without jargon.
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Quick Answers (Top 5 Most Common Questions)
1. What multiple do ecommerce businesses sell for?
Most sell for 2.5x to 3.5x annual SDE. A business with $100,000 SDE sells for $250,000-$350,000. Premium businesses with owned audiences, passive operations, and strong growth reach 3.5x-4.0x.
2. How do I calculate SDE?
SDE = Net Profit + Owner Salary + Personal Expenses + One-Time Costs. For example: $60,000 profit + $30,000 salary + $5,000 personal + $5,000 one-time = $100,000 SDE. Complete guide: SDE calculation.
3. What factors increase my multiple?
Diversified traffic (3+ channels), low owner hours (under 10 weekly), 36+ months history, 20%+ YoY growth, and stable 25%+ margins. Each adds 0.2x-0.5x.
4. What factors decrease my multiple?
Single-channel traffic, 30+ owner hours, under 12 months history, declining revenue, and customer concentration (one customer above 30%). Each subtracts 0.2x-0.5x.
5. Do I need a broker to sell?
Under $50K: sell yourself. $50K-$500K: consider a broker. Over $500K: almost always. A broker’s 8-15% fee is often recovered through a higher sale price. See our broker guide.
Advanced Valuation Questions
6. What are add-backs and why do they matter?
Add-backs are expenses on your P&L that won’t transfer to the new owner: your salary, personal vehicle, health insurance, one-time legal fees. They increase SDE by 15-25%. Read our add-backs guide.
7. How is inventory handled in a sale?
Inventory is sold separately at 50-100% of cost. Saleable stock under 60 days old gets 100%. Stock 60-180 days gets 70-85%. Dead stock (180+ days) gets near zero.
8. What’s the difference between SDE and EBITDA?
SDE includes owner-specific benefits (salary, personal expenses). EBITDA excludes them. For ecommerce businesses under $5M revenue, SDE is the standard metric buyers use.
9. How much does a professional valuation cost?
Free tools: $0 (good baseline). Broker opinion: often free during consultation. Professional appraisal: $1,000-$5,000. For businesses over $500K, professional valuation is usually worth it.
10. Can I sell if my revenue is declining?
Yes, but expect a significant discount. Buyers price declining businesses at 1.5x-2.0x SDE. Fix the decline before selling if possible—6 months of improving trend can add 1.0x to your multiple.
Timing & Process Questions
11. How long does due diligence take?
1-3 weeks for businesses under $500K. Buyers verify revenue, traffic, margins, supplier contracts, and customer data. A clean data room speeds the process.
12. What documents do I need to prepare?
12-24 months P&L, bank statements, Shopify analytics, tax returns, supplier contracts, and add-back schedule. Organize everything before listing.
13. Should I sell now or wait?
Sell when your metrics are strong: growth trending up, margins stable, traffic diversified. Don’t time the market—time your business.
Risk & Red Flags
14. What’s the biggest mistake sellers make?
Underreporting SDE by not documenting add-backs. Most sellers leave 15-25% of their value on the table. Document everything with receipts.
15. What causes deals to fall apart?
Inaccurate financials, hidden risks, and owner dependence. Buyers find everything during due diligence. Disclose issues upfront and explain mitigation plans.
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