E-commerce exits in 2025-26 split into two distinct markets. Amazon FBA aggregators (Thrasio, Perch, Heyday, and the post-bubble survivors) buy mature FBA businesses at multiples of Seller's Discretionary Earnings (SDE). DTC brand acquisitions by strategic buyers, private equity, or larger brands buy at multiples of EBITDA. The differences in valuation methodology, due diligence depth, and deal structure are substantial. Preparing for the right buyer pool is the difference between a 4x SDE deal and an 8x EBITDA deal on the same underlying business.
This pillar covers the e-commerce exit and valuation issues. Each section links to a detailed companion piece.
SDE vs EBITDA
The two main valuation metrics:
For an Amazon FBA business with £600k of net profit, owner-paying-themselves £80k salary, and £20k of non-recurring expenses: SDE = £700k. Multiple range from aggregators in 2025-26: 3-5x SDE = £2.1m to £3.5m. EBITDA at the same level (without owner salary addback): £600k. Multiple from strategic buyers: 5-7x = £3m to £4.2m. The structural difference matters.
Quality of Earnings (QoE) report
For deals above £1m, buyers commission a QoE report from a specialist firm (RSM, BDO, smaller boutique firms specialising in e-commerce). The QoE:
- 1Verifies that reported EBITDA is supported by underlying records.
- 2Identifies non-recurring items, accounting policy choices, and discretionary expenses.
- 3Tests revenue recognition and cost matching.
- 4Quantifies adjustments and proposes "Quality of Earnings adjusted EBITDA".
- 5Often produces a final figure 10-30% lower than seller-reported EBITDA.
Net working capital at exit
Most e-commerce sale agreements include a NWC adjustment: the buyer expects a target level of net working capital (typically inventory + receivables - payables) at completion. Above target: seller receives bonus consideration. Below target: seller takes a deduction.
- Inventory levels: targets are usually based on 60-90 days of sales coverage.
- AR levels: typically minimal in e-commerce (most sales are cash-at-sale).
- AP levels: depends on supplier payment terms; longer terms = higher AP = lower NWC.
- Optimising the position 6-12 months before sale: build inventory cleanly, manage AP terms, ensure no unusual items at completion.
BADR for e-commerce DTC sales
Business Asset Disposal Relief gives 14% CGT (rising over phased changes) on the first £1m of qualifying gains. Conditions: 5%+ shareholding, 2-year holding period, trading company throughout. For most owner-managed e-commerce brands, BADR applies on disposal up to the £1m cap. Above the cap, standard CGT rates apply. Family Investment Companies or trusts can multiply the £1m cap across family members where structured early enough.
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All guides on this site are reviewed for technical accuracy by qualified accountants in our network before publication.