Ecommerce Business Valuation Services

Understand the factors that drive a higher valuation

With a wide range of multiples, lets hone in on your industry sub-sector

Our Credentials

Ecommerce companies range from niche products sold on Fulfillment By Amazon, to specialized consumer or B2B products distributed through a private company’s own capabilities

An ecommerce with a great multiple & valuation will have:

Reliable and steady sales
A firm grasp on key performance metrics
A defensive mot built against competitors, imitation products, and larger players that can squeeze margins
Clean financial statements and data (standard operating accounting practices for measuring EBITDA, inventory, etc).

Ecommerce business valuations factors that attract multiple buyers and competitive bids will have:

Data reporting showing in-depth web traffic, customer behavior, & financial performance
Modern systems, tools, analytics, & processes
Dedication to continuous improvement
Consistent effort and passion for search engine optimization
A management team empowered to lead without the founders/owners

magnet attracting figures shaped like people

"man looking at his ecommerce sales performance dashboard on his laptop"

Key metrics and key performance indicators that maximize a valuation to the higher range multiple include:

Customer acquisition costs, retention rate, churn rate, lifetime value
Recurring revenue, average order value, net promoter score, subscription rate
Inventory turns, abandonment, return, refund rate
Reporting frequency and process to make improvements

Top 3 Benefits of getting an Ecommerce Business Valuation (even if you aren’t ready to sell!):

1) Understand where your company stands today in terms of comparable ecommerce companies sold and market trends, clean up key areas now so that you can be opportunistic on when to sell

2) Solidify your company’s strengths, identify the weaknesses potential buyers would use to sway their offer up and down from the median multiple & valuation range

3) Partner buy-outs or succession plans for closely held, family owned, private ecommerce companies are common, don’t let an equity holder road bump turn into a roadblock when it comes time for one of the owners to cash-out

Ecommerce Business Valuation Report Options

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Broker’s Opinion of Value

Receiving an Opinion of value is ideal for exit planning, succession planning, wealth management planning. This is our main offering, and is used to determine a likely Sales Price on a business. This is performed by one of our Ecommerce business experts holding an MBA, CBI or NAVCA certification.

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A Certified Business Valuation

Or a Conclusion of Value is performed by our NACVA Analyst. This is ideal for Tax Reporting, Shareholder Dispute, Compliance, and Legal Proceedings(i.e. Divorce, Trust, Estate) where the valuation may be evidence in an arbitration or court proceeding. This is only performed by our NAVCA Valuation Analysts.

With either valuation offering, you’ll receive:

The Fair Market Value of your business (what your business will likely sell for out on the Open Market)
The ‘Net-to-You’–what cash you will receive at the end of the transaction (more important than the Fair Market Value!)
What expenses can be considered ‘add-backs’ (items that ultimately increase your valuation)
What like-kind companies have sold for in the past
Why methods for valuation are commonly used in your industry, and how they apply to you
What value drivers help and hurt your business
Ways to grow the value of your business

Ready to Learn the Whole Company Sale Process End to End? Lets Talk!

An ecommerce business valuation is the starting point, preparing the company for sale is the journey and meeting your exit objectives is the goal

Case Study - Selling a Technology Business to Private Equity

Why Choose Exit Equity for an Ecommerce Business Valuation?

Hear it from our past clients.

Our family run manufacturing business is ready for its next chapter and we were unclear on which steps to take and how to take them. [The team at Exit Equity] came in and quickly understood the complexities of the business, respected the family dynamics and was able to guide all parties through both a valuation and a successful transition.. The best decision we made for our family and our company was to work with Exit Equity. – Julia Gilroy Family Owned Business

While no one can predict the future with absolute certainty, the rich detail and supporting context found in the Broker’s Opinion of Value provided by Exit Equity allowed us to confidently chart our course for the next couple of years. For the depth of research, the relevancy of the comparables, and the relative speed of delivery, we also feel that we received excellent value for the price. The fact that the valuation was such a successful process for us, we’d certainly consider Exit Equity again when we reach the next stage of this adventure. -Digital Marketing Agency Founder

I called numerous brokers and was very impressed by the professionalism and thoroughness that Exit Equity provided us. They really took the time to understand our needs and the final valuation came at a fair representation of the work we put into it through the years. I would HIGHLY recommend their services to any business owners wanting to understand their numbers and what it would actually look like to sell a business. – F.B. , founder and owner of a Business Services business

Take the Next Steps

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Free and confidential consultation to determine what type of valuation is needed, price and process

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1-2 informational meetings to understand your business and value drivers

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Provide needed information to analyst—both quantitative and qualitative

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Meet with your EEQ Expert for a 60-90 minute valuation presentation- a time to ask questions, identify actions and next steps based off your goals

Ready to Book a Consultation? Lets Talk!

Frequently Asked Questions for Ecommerce Business Valuations

Q: Why is ecommerce company valuation important?

A: Ecommerce company valuation is crucial for several reasons:

Selling your business: Knowing your company’s worth helps establish a realistic asking price during negotiations and ensures you receive fair compensation.
Raising capital: Investors need a valuation to assess the risk and potential return on their investment. An accurate valuation attracts better terms and secures more funding.
Strategic planning: Understanding your value helps make informed decisions about expansion, mergers & acquisitions, and future investments.
Benchmarking performance: Comparing your company’s valuation to competitors allows you to gauge your relative standing and identify areas for improvement.

Q: What is a good EBITDA for ecommerce?

A: There’s no single “good” EBITDA for all ecommerce businesses. It varies depending on factors like niche, size, growth stage, and market conditions. However, healthy EBITDA margins for ecommerce generally range from 10% to 20%, with higher margins indicating greater profitability and potentially attracting higher valuations.

Q: What is the EBITDA multiple of an eCommerce business?

A: The EBITDA multiple is a valuation metric that compares a company’s EBITDA to its purchase price. Multiples for ecommerce businesses can range from 3x to 10x, or even higher for exceptional companies. The specific multiple depends on the factors mentioned in the previous answer.

Q: What is Exit Equity's process for ecommerce company valuation?

A: Exit Equity provides a valuation as part of our sell-side advisory services, as well as one off valuations for business owners who are just starting to put together an exit plan. After a 45 minute intro call where we can learn more about your business, and you can learn more about our entire valuation process, we will off a firm fixed price quote for the valuation. The price range depends on the complexity of your business, current state of bookkeeping, tax records, and financial statements, and time urgency to complete the valuation. We require a minimum three years of income statements and balance sheet, and will work with you on other data sets crucial to the valuation (e.g. website analytics, customer buying behavior, vendor agreements, etc.). Once we complete an initial draft of the valuation, we will put together a virtual call to ask follow up questions on specifics in your financial statements and operations. Upon final completion of the valuation, we will review the 10 different valuation methodologies, deliver a price range for the fair market value of your businesses, and the expected net-to-you number (cash after closing, CPA, attorney, M&A fees, etc.) that is critical for personal and business planning

Q: How can I maximize my ecommerce company's valuation?

A: Here are some strategies to enhance your valuation:

Boost profitability: Increase revenue, streamline operations, and manage expenses effectively to improve your EBITDA margin.
Demonstrate growth potential: Show a clear path for future revenue and profit growth through sound business plans and historical performance.
Build a strong brand: A recognizable and trusted brand commands a premium valuation.
Diversify your product mix and customer base: Reduce reliance on single products or markets to mitigate risk and enhance investor confidence.
Maintain clean financials and accurate data: Transparent and well-organized financial records instill confidence in potential buyers and investors.

Q: Why is professional guidance essential in ecommerce company valuation?

A: Ecommerce valuation involves complex calculations, industry knowledge, and understanding market trends. Professional valuators offer several benefits:

Expertise: They possess in-depth knowledge of valuation methodologies, financial analysis, and the ecommerce landscape.
Objectivity: They provide unbiased assessments free from emotional attachment, ensuring a fair and realistic valuation.
Market insights: They stay updated on market trends and comparable company valuations, leading to an accurate reflection of your company’s worth.
Negotiation support: Their expertise can strengthen your position during negotiations, potentially securing a better deal.
Credibility: A professional valuation report adds credibility to your company’s value proposition, attracting serious buyers and investors.