How much is my ecommerce business worth?

Online retail is valued differently from most of the businesses we see. The asset is not premises or plant — it is a demand engine: traffic, conversion, margin and repeat purchase. Buyers know that engine can be fragile, so an ecommerce valuation is largely an exercise in working out how much of the current profit will still be there in two years' time under someone else's ownership.

The short answer

UK ecommerce businesses broadly price as follows:

Under £150k earnings — 2x-3.5x seller's discretionary earnings; the buyer is largely buying a job.
£150k-£500k earnings — 3x-4.5x SDE or EBITDA, depending on how much of the operation runs without the founder.
£500k-£2m EBITDA — 4x-6x EBITDA, with a genuine brand, team and diversified acquisition.
Subscription or high repeat-rate brands — 6x+, because the revenue is predictable rather than re-bought each month.
Amazon FBA only — typically 2.5x-4x, discounted for platform concentration.

Saleable stock is normally added at cost on top of these figures, not included within them.

What moves the multiple

Traffic concentration. The first question a serious buyer asks is where the customers come from. A business with a balanced mix of organic search, email, direct and paid sits at the top of its range. One where 80% of revenue arrives through a single paid channel or a single marketplace is priced for the day that channel changes its rules. This is now the largest single differentiator in ecommerce pricing, and AI-driven search shifting organic traffic patterns has made buyers more, not less, sensitive to it.

Repeat rate and LTV to CAC. A brand where 40% of revenue comes from returning customers is a fundamentally different asset from one buying every sale afresh. Buyers want cohort data, not a lifetime-value figure calculated once in a spreadsheet.

Contribution margin after everything. Gross margin before fulfilment and advertising is not a useful number in ecommerce. What matters is what is left after cost of goods, shipping, packaging, payment fees, returns and the advertising required to generate the order. Many stores with healthy-looking gross margins have thin contribution once those are loaded in.

Supplier and product risk. Sole-source suppliers, exclusive distribution that can be terminated on short notice, long lead times from a single overseas manufacturer, and SKUs vulnerable to being copied all reduce the multiple. Own-brand products with registered IP and defensible positioning increase it.

Inventory quality. Stock is cash. Ageing analysis showing slow-moving lines, and any pattern of writing off obsolete SKUs, comes directly off the price. Working capital tied up in six months of stock also changes the completion mechanics even where it does not change the multiple.

Operational transferability. Third-party logistics, documented supplier relationships, an in-house or retained marketing function, and clean platform and ad account ownership all raise the figure. A founder who personally negotiates with the factory, runs the ad account and answers the support inbox lowers it.

Adjustments we make to the accounts

Ecommerce accounts need careful normalising. Owner remuneration is often nominal, with the real reward taken in dividends. Advertising spend is frequently cut in the year before a sale, which inflates profit and depresses the growth a buyer can expect — buyers reverse that, so it is better to present it honestly. Founder-funded stock purchases, personal use of the company's payment accounts, capitalised versus expensed website development and one-off platform migration costs all need separating out before an earnings figure is credible.

Getting ready for a sale

The three things that reliably add value in the twelve months before a sale are reducing dependence on any single acquisition channel, building repeat purchase deliberately rather than hoping for it, and taking yourself out of daily operations so the business demonstrably runs without you. All three take time, which is why an independent valuation a year ahead of going to market is generally worth far more than one obtained the week an offer arrives.

Common questions

What multiple do ecommerce businesses sell for in the UK?

Small owner-run stores typically sell for 2x-3.5x seller's discretionary earnings. Established brands with over roughly £500,000 of EBITDA, a team in place and diversified traffic reach 4x-6x EBITDA, and strong subscription or repeat-purchase brands go higher. Amazon-only FBA businesses generally price lower for the same earnings because the platform dependency is a real risk a buyer is inheriting.

Is an ecommerce business valued on revenue or profit?

Profit, in almost every UK SME case. Revenue multiples apply mainly to high-growth venture-funded businesses where losses are deliberate. For an owner-managed store the valuation runs off seller's discretionary earnings or normalised EBITDA, after adjusting for owner salary, personal costs and any advertising spend that was suppressed to flatter the last set of accounts.

How does Amazon or platform dependency affect value?

It reduces the multiple, often by a full turn or more. A business where a single marketplace or a single paid channel drives most of the revenue carries concentration risk the buyer cannot control: account suspension, algorithm changes or rising ad costs can remove the earnings overnight. Owned channels — an email list with real engagement, organic search traffic, repeat direct customers — are what raise the multiple.

What metrics do ecommerce buyers actually diligence?

Contribution margin after fulfilment and advertising, repeat purchase rate and customer lifetime value against acquisition cost, traffic mix by channel with 24 months of analytics, SKU-level profitability, inventory ageing and days of stock, supplier concentration and terms, and refund and chargeback rates. Verified platform data — Shopify, Amazon Seller Central, ad accounts — is expected alongside the statutory accounts.

Is stock included in the sale price?

Usually not in the headline figure. UK ecommerce deals are commonly structured as the business value plus saleable stock at cost on completion. Obsolete or slow-moving inventory is excluded or heavily discounted, which is why stock ageing analysis matters before you go to market.

The Business Valuers provides independent, fixed-fee valuations for UK SMEs, including ecommerce and direct-to-consumer brands. Ranges above are indicative market observations, not a valuation of any specific business.