An established e-commerce business sells for a multiple of its adjusted profit, typically 2x to 6x depending on size, channel mix, and repeat revenue, through a process that takes four to eight months. The price you achieve is set less by the market and more by three controllable factors: how defensible your numbers are, how diversified your revenue is, and whether buyers have to compete for the deal.
How e-commerce businesses are valued
Smaller stores (under roughly £1m of profit) are priced on seller discretionary earnings, usually at 2x to 4x. (The US Small Business Administration publishes a plain-English primer on the mechanics of selling at this end of the market.) Larger operations are priced on adjusted EBITDA at 3.5x to 6x. Buyers cross-check against revenue: an online-first consumer brand rarely clears 1.5x revenue, and thin-margin businesses anchor nearer 0.5x. If you run below a 10% margin, fixing margin before selling is worth more than growing the top line.
What moves the multiple for online businesses specifically
- Channel mix. Marketplace-only businesses carry a structural discount of 1x to 1.5x versus brands with meaningful DTC or retail distribution. Amazon can suspend an account; a diversified brand survives that, a marketplace-pure one does not.
- Repeat rate and cohorts. Buyers read your cohort file before your brand deck. A 40%+ repeat purchase rate, or a subscription base, is the strongest single argument for a premium.
- Contribution margin after fulfilment and returns, not just gross margin. Fashion-style return rates quietly halve the real margin buyers underwrite.
- Traffic quality. Organic, owned-audience, and retained-customer revenue is durable; revenue bought entirely through rising paid acquisition is priced as fragile.
- Operational transferability. Documented supplier agreements, a 3PL or transferable logistics setup, and a team or agency stack that survives your exit.
The sale process, compressed
- Valuation and readiness (month 0-1). Establish the defensible adjusted profit figure and the realistic range. Fix the quick wins: separate personal costs, document add-backs, stabilise ad spend reporting.
- Positioning and materials (month 1-2). An anonymized teaser and a data-backed information memorandum. The story is the future: which growth levers a buyer can pull and what evidence exists for each.
- Buyer outreach (month 2-4). Approach strategics, aggregators, funds, and qualified individuals in parallel, under NDA, on one timeline. Sequential conversations destroy leverage.
- Offers and LOI (month 4-5). Compare structures, not just headlines: cash at close versus earn-out, working capital treatment, inventory handling.
- Diligence and close (month 5-8). Financial, legal, and platform diligence. Well-prepared sellers close at the LOI number; unprepared ones get re-traded.
The mistakes that cost the most
Selling to the first inbound approach without competition. Letting revenue dip during the process because the founder is distracted (buyers re-price on the latest monthly numbers). Claiming aggressive add-backs that die in diligence. And leaving the cohort and subscription data unexploited, when it is often the strongest card in the deck.
What is your business actually worth?
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Get your free valuation ↗Frequently asked questions
How much is my e-commerce business worth?
Typically 2x to 4x seller discretionary earnings under £1m of profit, and 3.5x to 6x adjusted EBITDA above it, cross-checked against 0.5x to 1.5x revenue. Channel mix, repeat rate, and margin quality decide where in the range you land.
How long does it take to sell an online business?
Four to eight months from engagement to funds, assuming the numbers are ready. Preparation beforehand, even a few months of clean reporting and documented add-backs, measurably raises the outcome.
Should I sell my Amazon FBA business or diversify first?
If you have 12+ months of runway and the economics to open DTC or retail, diversifying first typically adds more value than the same effort spent growing the marketplace channel, because it removes the platform-risk discount.
Do I need a broker or an M&A advisor?
Above roughly £500K of profit, a competitive process run by an advisor consistently outprices a self-managed sale, because leverage comes from parallel buyers on one timeline. Below that size, marketplaces and brokers are often the right route.