We’ve talked a lot about valuation metrics that determine the value of your FBA business when the time comes to sell it. But looking at metrics like Inventory to SDE ratio or whether Advertising as a % of sales is trending up and down, is quite dull and boring. Instead, let’s talk about things that matter to
I’m going to break down the 27 factors that matter most to an FBA business valuation. Ultimately, this is the price someone would be prepared to pay for your business if you decide to sell and move on to something bigger.
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.
You’ve probably heard some people claim that no online platform can ever accurately value a business. Heck, I’ve said it myself (and then debunked it 2 years later). So what’s it all about and CAN an online valuation tool really be accurate and useful?
If you’ve given selling your FBA business any thought, you probably know that most of the value of an online business comes from how much money it makes. For the most part, this is correct, but there are also many other things that directly influence the value of an Amazon business, some of which are surprisingly quick and easy to take advantage of.