Seller’s Discretionary Earnings, Discretionary Cashflow, Seller’s Discretionary Income – call it what you will, this is the most important figure when it comes to the valuation and sale of any business. If you don’t know your SDE, you have no way of knowing how much your business is worth, period.
Everyone knows how extremely important it is to have a healthy profit margin. We’ve even covered it right here just a little while ago. But what’s a good margin? 15%? 25%? 50%? The answer, as you may guess, is it depends.
You don’t have to be in the eCommerce game for long to hear terms like margin, gross margin and profit margin thrown around. And for a good reason – gross margin is perhaps the most important metric of any ecommerce business.