How to Sell an E-Commerce Business: What Owners Need to Know

E-commerce businesses are some of the most actively traded businesses in the market right now. Aggregators, private equity firms, and strategic buyers are all competing for profitable online brands — and owners who prepare properly can command premium valuations.

But e-commerce exits have their own unique dynamics. Here's what you need to know.

What Is My E-Commerce Business Worth?

Most e-commerce businesses sell for 2.5x to 5x SDE or 3x to 7x EBITDA, depending on size, growth, brand strength, and channel diversification.

The key variables:

• Revenue size. Businesses over $5M in revenue access a broader buyer pool and higher multiples.
• Growth rate. A brand growing 20%+ year-over-year commands a premium. Flat or declining revenue is a serious valuation headwind.
• Profit margins. Buyers care about margins as much as revenue. A $3M brand with 25% net margins is worth more than a $5M brand at 8%.
• Channel diversification. A business doing 90% of revenue through Amazon is riskier than one with its own DTC site, wholesale relationships, and marketplace presence.
• Brand defensibility. Proprietary products, patents, strong brand recognition, and loyal repeat customers all increase value.
• Supply chain stability. Businesses with reliable suppliers, inventory management systems, and no single-source dependencies are more attractive.

Who Buys E-Commerce Businesses?

Amazon Aggregators

Aggregators like Thrasio, Perch, and their successors raised billions to acquire Amazon-native brands. While the aggregator market has matured (and some early players stumbled), well-run aggregators continue to acquire profitable FBA businesses. They typically target brands doing $1M–$10M in revenue with 15%+ net margins.

Private Equity

PE firms are increasingly interested in e-commerce, especially brands with strong DTC presence, repeat purchase dynamics, and multi-channel distribution. They're looking for $2M+ EBITDA and platform potential.

Strategic Acquirers

Larger consumer brands, retailers, and CPG companies acquire e-commerce brands to expand their online presence, enter new product categories, or acquire customer bases.

Individual Buyers

Entrepreneurs backed by SBA loans or personal capital looking for profitable online businesses, typically in the $200K–$2M range.

Metrics Buyers Care About

E-commerce buyers are data-driven. Have these metrics ready:

• Revenue and net profit (trailing 12 months and by month for past 3 years)
• Customer acquisition cost (CAC) by channel
• Customer lifetime value (LTV) and LTV:CAC ratio
• Repeat purchase rate and cohort retention
• Average order value (AOV) and trend
• Return and refund rates
• Organic vs. paid traffic split
• Amazon-specific: organic rank, BSR, review count, account health
• Inventory turnover and days of supply
• Gross margin by product/SKU

How to Maximize Your Exit Value

1. Diversify Off Amazon

If you're 80%+ Amazon, start building your Shopify/DTC channel now. Even a modest DTC presence (20-30% of revenue) with a growing email list signals brand strength and reduces platform risk.

2. Build Your Brand

Invest in brand assets: professional packaging, a strong social presence, email marketing, and customer loyalty programs. Buyers pay more for brands, less for commoditized product listings.

3. Optimize Your Supply Chain

Reduce reliance on single suppliers. Establish backup manufacturers. Maintain healthy inventory levels. Supply chain disruptions during due diligence can kill deals.

4. Clean Your Financials

Separate business and personal expenses completely. Use accrual accounting if possible. Track cost of goods sold accurately by SKU. Buyers and their accountants will scrutinize every line.

5. Document Everything

Standard operating procedures for order fulfillment, customer service, inventory management, and marketing. The more documented and systematized your operations, the easier the transition — and the higher the multiple.

6. Stabilize and Grow

The worst time to sell is right after a big spike or a big dip. Buyers want to see consistent, sustainable growth. If you just had a viral moment, let the numbers stabilize for 3-6 months before going to market.

Common Deal Structures

All-cash at close is rare for e-commerce deals. More commonly:

• 70-80% cash at close with a stability payment (10-20%) paid 6-12 months post-close, contingent on the business maintaining performance
• Earnout (10-30%) tied to revenue or profit targets over 1-2 years
• Inventory purchased separately at cost, on top of the business value

Understand these structures before negotiating. A $3M offer with 50% in earnouts is very different from a $2.5M all-cash deal.

Red Flags That Scare Buyers Away

• Single-channel dependence (100% Amazon)
• Accounts with policy violations or review manipulation history
• Seasonal revenue concentration without off-season diversification
• Declining margins despite growing revenue (sign of an advertising efficiency problem)
• Single-product reliance — one SKU is 70%+ of revenue
• No clear brand identity — just arbitrage and listings

Ready to Explore Selling?

If you've built a profitable e-commerce brand and you're thinking about your next chapter, I can help you understand your value and navigate the sale process. Book a free call to discuss your situation confidentially.