What Is My E-Commerce Business Worth?

E-commerce businesses are among the most actively traded assets in the small business market. The buyer pool is deep — individual buyers, aggregators, PE firms, and strategic acquirers all compete for quality online businesses. But valuations vary enormously based on the type of e-commerce business you run.

Here's how to think about what yours is worth.

Typical Valuation Ranges

E-commerce valuations range widely:

• Dropshipping and arbitrage businesses: 1.5x to 2.5x SDE
• Private label / branded products: 2.5x to 4x SDE
• Subscription / DTC brands: 3x to 5x+ SDE
• Larger e-commerce brands ($1M+ EBITDA): 4x to 8x EBITDA

Factors that push toward the higher end:

• Proprietary or branded products
• Diversified traffic sources (organic, email, social — not just paid ads)
• Subscription or repeat purchase model
• Strong margins (40%+ gross margin)
• Growing revenue with consistent profitability
• Own your supply chain (not reselling others' products)
• Email list and owned audience
• Multi-channel (DTC site + Amazon + wholesale)

Factors that push toward the lower end:

• Entirely dependent on paid advertising for traffic
• Reselling products without brand differentiation
• Single platform dependent (Amazon-only)
• Thin margins (below 25% gross)
• Declining revenue or one-hit product
• Complex supply chain with single-source suppliers
• No email list or owned audience

Business Model Matters

Amazon FBA

Amazon businesses are the most commonly sold e-commerce type. FBA aggregators drove multiples up in 2020–2021, but that market has corrected. Typical FBA businesses now sell for 2x to 3.5x SDE. Key factors: brand registry, product reviews, organic ranking, and supplier relationships.

Shopify / DTC

Direct-to-consumer brands selling through their own website retain more customer data, build stronger brands, and control their margins. DTC businesses with repeat customers and email marketing programs sell for 3x to 5x SDE.

Subscription E-Commerce

Subscription boxes and replenishment models (health supplements, pet food, coffee) command premium multiples because of their predictable revenue. Monthly recurring revenue in e-commerce is valued similarly to SaaS.

Dropshipping

Lowest multiples in e-commerce. The barriers to entry are minimal, margins are thin, and the business model is easily replicated. Dropshipping businesses typically sell for 1.5x to 2.5x SDE at best.

Key Metrics Buyers Evaluate

Customer Acquisition Cost (CAC)

How much does it cost to acquire a new customer? Buyers want to see a CAC below 30% of first-order revenue and a clear path to profitability on the first or second purchase.

Lifetime Value (LTV)

What's a customer worth over their entire relationship? An LTV:CAC ratio above 3:1 indicates a sustainable, scalable business.

Traffic Diversification

Businesses dependent on a single traffic channel (Facebook ads, Google Shopping) are risky. Buyers prefer a mix: organic search (30%+), email (20%+), paid (30%–), social/referral (10%+).

Repeat Purchase Rate

What percentage of customers buy again? A repeat rate above 30% signals product-market fit and brand loyalty. Above 50% is exceptional.

Gross Margin

E-commerce margins vary by product type, but buyers prefer 40%+ gross margins after COGS, shipping, and platform fees.

Supplier Diversification

Single-source suppliers create risk. Buyers want to see backup suppliers or proprietary manufacturing arrangements.

How to Increase Your E-Commerce Business's Value

1. Build your brand. Trademark your brand, invest in packaging, and create brand awareness beyond just paid ads. Branded businesses sell for 50–100% more than commodity resellers.
2. Diversify traffic. Build organic SEO, grow your email list, and develop content marketing. Reduce dependence on any single paid channel.
3. Grow your email list. An owned audience that you can market to for free is one of the most valuable assets in e-commerce. Buyers will evaluate list size, engagement rates, and revenue attribution.
4. Improve repeat purchases. Subscription options, loyalty programs, and email flows that drive reorders increase LTV and valuation.
5. Diversify suppliers. Secure backup suppliers for your top products. Document all supplier relationships, costs, and lead times.
6. Clean up your P&L. Separate personal expenses, track accurate COGS, and maintain clear financial records. E-commerce accounting is notoriously messy — clean it up before going to market.

Ready to Find Out What Your E-Commerce Business Is Worth?

Browse the valuation multiples guide for current industry data, or schedule a free call for a confidential valuation.