E-commerce and retail
Retail and e-commerce businesses are easy to list and hard to sell well. Buyers worry about inventory, platform dependence, margin after advertising and whether the brand has customers or just traffic. We help BC owners present the real unit economics, price inventory into the deal properly and find buyers who understand the model.
How the money works
- Inventory is both the largest asset and the easiest place to hide a problem
- Advertising cost decides whether revenue growth is profit or just volume
- Platform and marketplace dependence can end a business with a policy change
- Physical retail value is tied to the lease and the location as much as the brand
The moves we make
- Value on contribution margin after advertising, returns and fulfilment, not on top-line sales
- Count and value inventory separately and set a clear peg at closing
- Document repeat customer rate, channel mix and supplier terms for the buyer
- Prepare financing that treats inventory realistically, including vendor financing where needed
Unit economics decide the price
A retail or online business with growing revenue and shrinking margin is worth less than a smaller one that makes money on every order. Buyers in BC look at gross margin, advertising cost per order, return rates, fulfilment cost and what is left. They also look at how much of the revenue comes from repeat customers rather than paid acquisition. We rebuild these numbers from the raw data, because platform dashboards and the owner's spreadsheet rarely agree with the financial statements.
Inventory in the deal
Inventory is usually priced separately from the business, at cost, on a count at closing. That sounds simple, and it causes more disputes than any other single term. Slow-moving, obsolete and seasonal stock, goods in transit, consignment and supplier credits all need rules agreed in the letter of intent. We set the inventory peg and the counting method early and reconcile the ledger to the shelves before the buyer's accountant does. Sellers who clear dead stock before listing get cleaner closings.
Platform risk and the brand
Businesses that live on one marketplace, one advertising channel or one supplier carry a risk buyers price heavily. A brand with its own customer list, several channels and supplier agreements that transfer is worth more and is easier to finance. Where the business depends on a platform, we document the account history, policy compliance and the transfer process so the buyer and lender can see the risk clearly. Ali's marketing agencies give us a practical read on which traffic is durable.
Questions from e-commerce and retail owners
How are e-commerce businesses valued?
On normalised earnings after all advertising, fulfilment and returns, with the multiple reflecting repeat customers, channel diversity and transferability. Inventory is priced separately at cost on a closing count.
Can I sell a retail store with a short lease?
Yes, but the lease will limit the price and the buyer's financing. Negotiate an extension or renewal options with your landlord before listing, with your lawyer's help.
Will a bank finance an online business purchase?
Some will, with care. Lenders want documented earnings, a transferable customer base and a buyer with relevant experience. Vendor financing is common in this sector.
Start with a confidential conversation.
Tell Ali where the business is and what you want to happen next. You leave with a straight read on value, timing and the two or three moves that matter, whether or not we work together.