Ecommerce & DTC
Contribution margin after acquisition cost is the number that gets underwritten.
Blended metrics do not survive diligence in this sector. Buyers pull cohorts from the raw data, rebuild contribution margin after advertising, and price what is left. Preparation is largely about making sure your own numbers were built the same way.
Who acquires in this sector.
The buyer set determines the process. These are the parties we approach on a mandate here, and the reason each of them pays.
What moves the number, and what moves it back.
Both lists are what buyers in this sector actually examine. The first is where preparation earns its return. The second is where processes lose ground once diligence opens.
What lifts the multiple
Worth fixing twelve to twenty-four months before you go to market.
- Cohort retention and repeat revenueThe single most examined metric. Cohorts that hold are what separates a brand from an arbitrage.
- Contribution margin after acquisition costWhat the business actually earns per order once advertising is charged against it.
- An owned audienceList, subscribers and organic demand are assets. Rented attention is a cost line.
- Channel diversificationRevenue that does not depend on one platform, one marketplace or one ad account.
- Supply chain and lead time controlInventory discipline is where ecommerce businesses either generate cash or consume it.
What gets discounted
Found in diligence if it is not addressed first, and repriced when it is found.
- Single-channel dependencyOne platform, one marketplace or one ad account holding the demand is the sharpest risk in the category.
- Paid-heavy acquisition on thin contributionGrowth that stops the moment spend stops is valued as spend, not as growth.
- Discount-trained customersA base that only converts on promotion has a lower lifetime value than the blended number suggests.
- Inventory positionOverstock, short-dated goods and stranded units are settled at the buyer's valuation, not yours.
- Trademark and IP gapsUnregistered marks and unassigned creative are cheap to fix early and expensive to fix late.
How a process runs here.
Get the analytics, advertising and commerce platforms reconciled to the accounts before you go to market. Every serious buyer will connect to the source systems directly, and the version of the business they build from raw data is the version they price.