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E-Commerce Business Valuation Formula:

How To Value: This is a general small business valuation formula or pricing method for established E-commerce businesses based on a percentage of annual gross revenues that can be used to help determine an approximate value and asking price to list and market a business for sale.

E-Commerce (retail): Approximately 50% of annual gross sales + inventory

Broker Comments: Even though at the end of the day e-commerce businesses are retail businesses, they tend to support appreciably higher valuations and asking prices than the average brick and mortar retail store because of a number of attractive advantages they can offer. This includes higher profit margins, much lower overhead, (most small ones are home based and have no employees), easy to relocate, the world is their market, and the fact that web based businesses can generally offer the owner a very attractive lifestyle and more freedom.  

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