Every week, I get emails from store owners asking the same question: “What’s my business worth?”
The answer is never a single number. It’s a range. And that range depends on factors most sellers don’t think about.
Here are the 15 most common questions—answered directly.
Quick Answers (Top 5 Most Common Questions)
1. What’s the average multiple for an online store?
The average sits between 2.5x and 3.5x SDE. Shopify brands with strong retention often push past 4.0x. Amazon FBA businesses usually settle between 2.0x and 3.0x net profit plus inventory.
2. Is my business valued on revenue?
No. Buyers value your business on profit, specifically SDE (Seller’s Discretionary Earnings). Revenue is a vanity metric. Profit is what matters.
3. What’s the quick and dirty valuation formula?
Take your annual profit. Multiply by 2.5 for a conservative estimate. Multiply by 3.5 for an optimistic one. Adjust based on LTV, traffic diversity, and owner dependence.
4. Why do some stores sell for 2x and others for 4x?
The difference is risk and predictability. A store with repeat customers, diversified traffic, and documented operations is predictable. Predictable revenue commands higher multiples.
5. How accurate are online valuation calculators?
They’re a starting point, not a final answer. Most calculators use a simple revenue or profit multiple. They don’t account for LTV, traffic quality, or owner dependence. Use them for a rough idea, then get a professional assessment.
Advanced Valuation Questions
6. What is SDE and why does it matter?
SDE is Seller’s Discretionary Earnings. It’s your net profit plus owner salary, one-time expenses, and personal perks. It represents the total cash flow available to whoever owns the business.
7. How do add-backs work?
Add-backs are expenses that won’t transfer to the new owner. Your salary, your car lease, your health insurance, that one-time legal fee. These get added back to your profit to calculate SDE.
8. Does my email list add value?
Absolutely. An engaged email list is one of the most valuable assets a Shopify store can have. Buyers will pay $1 to $3 per subscriber if the list is active and generating revenue.
9. How does traffic diversity affect my price?
A store getting 80% of traffic from one source is risky. A store with organic, email, direct, and paid traffic is resilient. Buyers pay premiums for resilience.
10. What’s a good LTV:CAC ratio?
3:1 or better. That means for every $1 you spend acquiring a customer, they generate $3 in lifetime value. Below 2:1, your business model is fragile and buyers will discount heavily.
Timing & Process Questions
11. When is the best time to sell?
When your revenue is growing, your LTV is improving, and your operations are documented. That’s when buyers pay top dollar. Declining businesses sell at discounts.
12. How long does due diligence take?
Typically 2-4 weeks after an offer is accepted. Buyers verify your financials, traffic data, and operations. Clean books speed this up dramatically.
13. Can I sell without a broker?
Yes, especially if your business is under $500K. You can list on marketplaces like Flippa or Empire Flippers, or reach out to buyers directly. For larger deals, a broker is usually worth the commission.
Risk & Red Flags
14. What scares buyers away?
- Single-product dependence: One ASIN or one SKU generating most revenue.
- Platform risk: Amazon FBA accounts with policy violations.
- Owner-centric operations: No team, no SOPs.
- Declining traffic: SEO rankings slipping or ad costs rising.
- Unverifiable claims: If you can’t prove your numbers, buyers walk.
15. How do I prepare for a sale?
Start 90 days before you list. Clean your books, document your processes, diversify your traffic, and boost your LTV. Every improvement you make directly increases your sale price.
Get a Realistic Number Today