Ecommerce clears 2.42x SDE across 4,584 deals

A seller with a Shopify brand doing $600,000 of revenue and $150,000 of profit usually arrives with a number already decided. One source says ecommerce trades around 4x profit. Another says 3x to 6x EBITDA. A third quotes 28x. So the business is worth somewhere between $450,000 and $4 million, and the number that stuck is whichever one was read last.

Those ranges are not so much wrong as unusable. They are quoted in different units, on different earnings definitions, from different size bands, and mostly without a sample size or any statement of whether the underlying deals closed. Almost every disagreement about what an online business is worth turns out to be a disagreement about arithmetic conventions, not about value. I price private companies for a living, more than a thousand of them. Here is what the largest ecommerce transaction sample I have cleared at, why the published figures disagree, and the single conversion that reconciles most of them.

The deepest cell in the index is also the cheapest

Start with cleared prices. In my Felpel Private Company Index, built on 7,601 small-business transactions carrying a usable EV/SDE multiple, ecommerce and consumer is by a wide margin the deepest cell: 4,584 deals, about 60 percent of the entire sample. Its median is 2.42 times seller's discretionary earnings, with the middle half of the cell falling between 1.83x and 3.17x.

That is the lowest median of the six sectors in the index with a defensible sample. Retail and hospitality clears 3.37x across 479 deals, manufacturing 3.36x across 66, healthcare services 3.35x across 139, professional and B2B services 3.09x across 452, and micro and online SaaS 2.86x across 523. The all-deal median is 2.67x. Ecommerce sits a quarter of a turn below the index as a whole and nearly a full turn below the sectors that require a lease, a licence or a van.

That ordering surprises people, because ecommerce is the category with the best story attached to it. It is asset-light, it scales without headcount, and it was the growth engine of the 2020 boom. Buyers price none of that. What they price is how much of the earnings survives the owner leaving, and an online storefront resting on one founder's media buying, one platform's algorithm and one supplier's pricing is a fragile thing to own. The premium cells in the index are the ones where revenue is contractual, regulated or geographically captive.

The bottom quartile is the figure worth sitting with. A quarter of those 4,584 transactions, roughly 1,146 businesses, cleared at or below 1.83 times SDE. That is beneath the floor of essentially every published rule of thumb for the category.

Everyone publishing ecommerce multiples sells listings

Now compare that with what a seller actually finds. Flippa's published guidance puts ecommerce profit multiples between 3.49x and 4.8x, peaking in late 2022 and stabilising at 3.98x in late 2024, with revenue multiples reaching 4.09x in early 2023 before normalising to 2.83x. Its general valuation guidance lists SDE at 2.5x to 4x.

Take that last range seriously for a moment. The index median for ecommerce, 2.42x, sits below the bottom of it. So does the entire bottom quartile of a 4,584-deal sample.

That disagreement deserves explaining rather than dismissing, and part of the explanation is structural. Flippa's ecommerce multiples page states no sample size, does not say whether the figures are completed sales or listings, and does not define the earnings basis. Its Digital M&A Insights Report for the first half of 2026 reports registered buyers, search terms and time-to-close, but discloses neither total transaction volume nor sale-to-asking-price ratios. I am not alleging bad faith. I am pointing at an incentive. Every organisation publishing ecommerce multiples at scale earns its money from listings, and a listings business has no reason to publish the number that tells sellers their asking price is too high.

That is the entire reason this cell exists in my index. I have no listing to sell.

The units are doing most of the work

Here is the reconciliation, and it is far simpler than the disagreement makes it look. The online-business marketplaces quote multiples of monthly earnings. Brokers and valuation professionals quote multiples of annual earnings. The two conventions differ by a factor of twelve, and almost nobody states which one they are using.

Empire Flippers' State of the Industry Report covering 2025 gives the cleanest illustration. Across 161 businesses sold, the average listing multiple was 28.69 times monthly earnings and the average sale multiple was 23.93 times monthly earnings. A 28.69x multiple sounds like a different universe from 2.42x. Divide by twelve and it stops being one: the average ask becomes 2.39x annual and the average clear becomes 1.99x annual.

Set those beside the index. My median for ecommerce is 2.42x annual SDE. Empire Flippers' average ask, converted, is 2.39x. Two independently assembled datasets, drawn from different populations, landing within four hundredths of a turn of each other once the units match. Their average clear, at 1.99x annual, falls between my p25 of 1.83x and my median.

Two caveats, because they matter and a careful reader will find them anyway. One figure is a median and the other an average, which are different statistics on a visibly skewed distribution. And the earnings definitions are close but not identical: the marketplaces work from seller-reported net profit, the index from seller's discretionary earnings. This convergence is a sanity check, not a proof. It is still close enough to say that Empire Flippers and I are describing the same market, and that 4x profit is not describing it.

So before arguing about whether an online business is worth 2.4x or 4x, settle three questions: monthly or annual, which earnings line, and asked or cleared. In my experience most ecommerce valuation disputes dissolve at the first one.

Size moves the multiple more than the category does

The size effect inside ecommerce is real and large. Empire Flippers broke its 2025 cohort out by deal size: 129 sales under $300,000 averaged 22.42 times monthly earnings, 26 sales between $300,000 and $1 million averaged 26.69x, and 11 sales above $1 million averaged 35.09x. In annual terms that is 1.87x, 2.22x and 2.92x. A business four times the size of another sells for more than half a turn more per dollar of earnings.

Notice where that spread lands. From 1.87x to 2.92x sits almost exactly inside my interquartile range for the cell, 1.83x to 3.17x. Much of the dispersion that sellers attribute to niche, brand or quality is size.

My index shows the same gradient on an EV/EBITDA basis, climbing from 2.9x below $5 million of enterprise value to 6.4x between $5 million and $50 million and 12.3x above $50 million. That is a basis change as well as a size change, since EBITDA removes owner compensation and reads higher than SDE on the same company, so the steepness there is partly definitional and I would not lean on it. The ecommerce size gradient, measured in one unit on one earnings definition by one marketplace, is the cleaner evidence.

The practical consequence for a seller is unglamorous. The most reliable way to raise your multiple is to be bigger when you sell.

The comparables from the aggregator years are gone

A good deal of the 4x to 6x folklore in this category is a memory of 2021, a market that contained a specific buyer who is no longer in it.

Between 2020 and 2022, dozens of Amazon aggregators raised billions of dollars to roll up FBA brands. Thrasio, the largest, raised $3.4 billion, acquired more than 200 brands and carried a peak valuation above $10 billion. In February 2024 it filed for Chapter 11 protection, shedding roughly $495 million of debt and taking up to $90 million of fresh capital, and emerged about three months later under a new chief executive. The arbitrage underwriting the entire category was buying brands at a single-digit multiple and carrying them inside an entity valued at a much higher one. When rates rose and the public comparables compressed, the arbitrage closed and that bid left the market.

This matters for pricing because a seller quoting a 2021 comparable is quoting a price that a buyer who no longer exists once paid. Empire Flippers' own average listing multiple fell 11.4 percent year over year into 2025. The buyer for a sub-$1 million online business today is an individual operator or a small sponsor, financing it with their own money and a lender who sizes debt off earnings. They pay for what it earns.

The ask is not the clear

Two independent datasets agree that asking prices in this category run high.

In my index, active listings ask a median 3.26 times SDE while verified-sold transactions clear at 2.58 times, across a paired sample of 2,820 verified-sold deals. Stated one way the ask carries roughly a 26 percent premium over the clear; stated the other way the clearing price sits roughly 21 percent below the ask. Both readings come from the same two numbers, and it is worth saying which arithmetic you mean, because anyone serious will do the division themselves.

Empire Flippers' 2025 figures point the same way from a different sample: 28.69x asked against 23.93x cleared, a gap of about 17 percent, over an average 101.8 days on market.

Neither is a within-deal discount. Both compare a population of listings against a population of sales, which is not the same as saying the average business sold 17 percent below its own asking price. But the direction is consistent across two datasets that share no underlying data, and the instruction that follows is identical: build your comparable set from cleared prices. Listings are what is freely available precisely because the organisations publishing them are paid to list.

One further number from the same report deserves a seller's attention. Empire Flippers received 8,540 seller submissions in 2025, passed 843 through initial vetting and listed 490. The filtering is severe well before price is ever discussed.

How I price an online business

Fix the units before anything else. Write down whether the multiple is monthly or annual and which earnings line it sits on. Net profit, SDE and adjusted EBITDA are three different denominators on the same company, and the gap between them is usually larger than the gap being argued about.

Start from a cell and a sample size, never a point estimate. For ecommerce that is 2.42x with a middle half of 1.83x to 3.17x across 4,584 deals. A range with an n attached is an argument. A single number is a slogan.

Underwrite concentration, because concentration is what the discount is for. One platform supplying the traffic, one supplier setting the landed cost, one SKU carrying the margin, one ad account nobody else can run. Each is a reason the earnings do not transfer, and transfer is the only thing a buyer is actually purchasing.

Separate the operator's wage from the return on capital. A great deal of what gets presented as profit in a small online business is payment for a job. Jobs do not sell at asset multiples, and a buyer who intends to hire out the work will reprice the earnings before applying any multiple at all.

Anchor on cleared prices and state the basis out loud. The seller who says "2.4 times annual SDE, cleared, from a sample of 4,584" is having a different conversation from the seller who says "the market pays 4x". Only one of those numbers can be checked, and the checkable one is what survives diligence.

Ecommerce is the most measured cell in small-business M&A and one of the least accurately quoted. The measurement is not the hard part. The hard part is that the people with the deepest data have the least reason to publish the part sellers most need to hear.

Common questions

What multiple does an ecommerce business sell for?

In the Felpel Private Company Index, the ecommerce and consumer cell of 4,584 transactions cleared a median of 2.42 times seller's discretionary earnings, with the middle half between 1.83x and 3.17x. That is the lowest median of the six sectors with a defensible sample, below retail and hospitality at 3.37x, manufacturing at 3.36x, healthcare services at 3.35x, professional and B2B services at 3.09x and micro and online SaaS at 2.86x, against an all-deal median of 2.67x across 7,601 transactions. Ecommerce is the deepest cell in the index and the cheapest.

Why do marketplaces quote ecommerce multiples of 20x or 30x?

Because they are quoting multiples of monthly earnings rather than annual earnings, and the two conventions differ by a factor of twelve. Empire Flippers reported that across 161 businesses sold in 2025 the average listing multiple was 28.69 times monthly earnings and the average sale multiple was 23.93 times monthly. Divided by twelve those are 2.39 times and 1.99 times annual earnings. Business brokers and valuation professionals quote annual multiples, so a 28.69x marketplace figure and a 2.42x broker figure can describe almost the same price. Always establish whether a multiple is monthly or annual before comparing it with anything.

Is an ecommerce business worth 4x profit?

Rarely at small scale. Flippa's published guidance puts ecommerce profit multiples between 3.49x and 4.8x, stabilising at 3.98x in late 2024, and lists a general SDE range of 2.5x to 4x. The Felpel Private Company Index median for ecommerce, 2.42x SDE, sits below the bottom of that SDE range, and so does the entire bottom quartile of the 4,584-deal cell. Flippa's ecommerce multiples page does not state a sample size, an earnings basis, or whether the figures are completed sales or listings, which is worth weighing when the numbers disagree.

Do ecommerce businesses sell for their asking price?

Typically below it, and two independent datasets agree on the direction. In the Felpel Private Company Index, active listings ask a median 3.26 times SDE while verified-sold transactions clear at 2.58 times across a paired sample of 2,820 deals, so the ask carries roughly a 26 percent premium over the clear, or equivalently the clear sits about 21 percent below the ask. Empire Flippers reported 28.69 times monthly asked against 23.93 times cleared in 2025, a gap of about 17 percent, over an average 101.8 days on market. Both are population comparisons rather than within-deal discounts, but both say to build a comp set from cleared prices.

What raises the multiple on an online business?

Size first, then transferability. Empire Flippers' 2025 cohort averaged 22.42 times monthly earnings on 129 sales under $300,000, 26.69 times on 26 sales between $300,000 and $1 million, and 35.09 times on 11 sales above $1 million, which is 1.87x, 2.22x and 2.92x in annual terms. That spread sits almost exactly inside the index's interquartile range for the cell, so much of the dispersion attributed to niche or quality is size. After size, buyers pay for what survives the owner leaving: diversified traffic and supplier relationships, no single platform or customer carrying the business, documented operations, and earnings that do not depend on the founder's media buying.

Related reading

• Micro-SaaS sells for 2.86x SDE, not 4x ARR.
• Is a business worth 3x profit? The honest answer is a range.
• What is SDE, and which add-backs actually survive.
• What acquirers really pay for.

Go deeper

If you are buying or selling an online business and want the number underwritten rather than asserted, I give an independent, defensible range with the reasoning attached.

Tomasz Felpel is an investor, founder, and advisor in private markets and healthcare, based in New York. He is a three-time founder of Value Alpha, an AI-powered private-markets valuation platform, Sonnerie VC, an early-stage healthcare venture firm, and Pond. Previously he led corporate development and M&A at Fortune 500 scale, pricing more than 1,000 private companies. Columbia Business School EMBA. Read the full story.