Table Of Contents
Step 1: Request and Analyze Financial Statements
The first step in revenue verification is obtaining detailed financial records from the seller.
Sellers should be able to provide you with:
Profit and Loss (P&L) statements (at least 24-36 months, if available)
Balance sheets
Bank statements
Tax returns (if applicable)
Once you have this list of documents, then it becomes easy to analyze the store in question's financials.
We advise you to focus on the following KEY info:
Revenue Consistency: Look for steady growth patterns rather than erratic spikes. If you notice a sudden increase in sales right before the listing, it could be a RED FLAG! The seller could be boosting numbers to attract buyers.
Return and Refund Rates: High revenue might be misleading if a large percentage comes from refunded transactions. Ask for return rate data and check if refunds are deducted properly in the revenue calculations.
Seasonality & Trends: Some e-commerce stores earn only during specific seasons (e.g., Christmas-related products). Such a store could be the wrong investment for you if you’re looking for consistent revenue (which is what 99.9999% of buyers want). Make sure you don’t fall for such a trap and pay a premium price based on peak-season revenue figures.
Profit Margins: Profit margins simply refer to a percentage that indicates how much the business is making per every dollar of the sales. If the profit margins are razor-thin, then you should be careful not to trust the revenue report. Take a closer look at the gross and net profit margins to ensure the business is sustainable.
Once you’ve examined the KEY financials, the next step is to cross-verify revenue data using other sources…
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Step 2: Cross-Check Payment Processor Reports
Most e-commerce businesses process payments through the following common platforms:
Shopify Payments
PayPal
Stripe
Amazon Pay
Authorize.net
These platforms provide direct transaction reports that are difficult to manipulate. Ask the seller to provide you with: Raw transaction history exports (CSV files are ideal), Monthly payout reports, and Chargeback and refund records
Once you’ve got these reports, you can proceed to verify revenue as follows:
Match reported sales to actual deposits in bank statements. If you notice a large discrepancy, don’t hesitate to ask the seller for clarification.
Look for canceled orders, chargebacks, or failed transactions that may have been included in revenue but never actually resulted in cash received.
Identify any bulk orders or personal purchases that may have been used to inflate revenue figures. If a single account placed multiple high-ticket orders, that could be another RED FLAG!
A legitimate seller should have no problem sharing this data with you. If they hesitate or provide incomplete records, consider it a RED FLAG.
Step 3: Verify Sales Data in E-commerce Platform Reports
After verifying with payment processors, you now want to check direct sales reports from the e-commerce platform (e.g., Shopify, WooCommerce, Amazon FBA, or BigCommerce).
Here’s what you need in this case:
Dashboard screenshots showing gross sales, refunds, and net revenue
Sales reports segmented by month, product, and traffic source
Breakdown of organic vs. paid traffic sales
Look for the following in these e-commerce reports:
Revenue Attribution: Compare sales channels to understand where revenue is actually coming from (e.g., direct website sales vs. Amazon marketplace vs. social media).
Traffic Correlation: If revenue increases suddenly, verify whether it aligns with organic growth or just a surge in ad spend.
Customer Concentration: If a handful of large orders make up most of the revenue, the business could be at risk if those customers don’t return.
Cross-referencing e-commerce platform reports with payment processor data and bank statements will help you spot inconsistencies.
Step 4: Analyze Traffic and Marketing Spend
A business’s revenue is only as sustainable as its customer acquisition strategy.
If most sales come from paid traffic, then the cost of acquiring customers is a critical factor in evaluating revenue.
Request the seller for access to the following:
Google Analytics (or GA4) to verify traffic sources
Meta (Facebook) Ads, Google Ads, or TikTok Ads manager reports
Email marketing data from Klaviyo, Mailchimp, or another CRM
And pay attention to the following:
Organic vs. Paid Sales: If most of the store’s revenue comes from paid ads, check ad spend trends to see if profits are shrinking due to rising costs.
Traffic Spikes vs. Sustained Growth: A one-time influencer promotion or viral post might create temporary revenue surges that don’t reflect normal operations.
Returning Customer Rate: High revenue might seem impressive, but if customers rarely return, future revenue could be unstable.
If revenue is highly dependent on paid ads, then you’ll need to closely analyze CAC (Customer Acquisition Cost) vs. AOV (Average Order Value).
A high CAC with a low AOV means the business is running on thin margins.
Step 5: Conduct Supplier and Inventory Verification (If Applicable)
If the e-commerce business you’re eyeing sells physical products, check whether revenue matches actual inventory orders and supplier invoices.
Here are simple steps on how to go about it:
Ask for supplier invoices and match them against the reported revenue.
Look for inconsistencies (e.g., reporting high sales but ordering very little stock)
Verify dropshipping relationships by contacting suppliers directly (if permitted)
Some sellers inflate revenue by selling phantom stock — meaning they count sales but never actually fulfill the orders.
We Help You Buy / Build, Manage and Scale E-commerce Brands for an EXIT
E-commerce Simplified for Busy Individuals – We handle the buying, building, and scaling, so you can focus on what matters.
Growth-Focused Strategies – From sourcing to marketing, we drive growth and prepare you for a profitable exit.
Expertly Managed Exits – We build a high-value brand designed for a Lucrative exit.
Step 6: Speak with the Seller and Ask Direct Questions
Numbers tell part of the story. Holding a conversation with the seller can reveal critical insights.
Ask them important questions like:
What caused sudden increases or declines in sales?
How has the business been acquiring customers?
Has revenue been boosted by heavy discounting?
What percentage of customers return for repeat purchases?
A legitimate seller will be open and transparent. If you sense defensiveness or vague responses in any of your questions, please dig deeper.
BEWARE of Fake Screenshots: Fraudulent Sellers
As we mentioned at the beginning of this article, fake screenshots are one of the most widespread scams you’ll find on marketplaces like Flippa, Empire Flippers, and so on.
But don’t get it wrong;
There are still “clean” sellers who use screenshots to verify their revenue claims.
Nevertheless, we strongly advise you to handle screenshots with a grain of salt as most of them could be fake.
For instance, you can easily change details (numbers) on a screenshot with a photo-editing tool like Photoshop.
With just basic editing skills, you can manipulate the screenshot in a way that it’s not easily noticeable.
Another way fraudulent sellers may manipulate the screenshots is through editing a page’s HTML—again, anyone can do this on Chrome!
Once they alter the page, they then take a screenshot and use it to lure unsuspecting buyers.
That being said, we advise NOT relying on the screenshots too much when verifying the claims.
A much better way would be to ask the sellers to grant you access to the dashboard to verify the revenue.
But that’s almost impossible in most cases, right?
Another way to go about it is by asking the sellers to record a video showing them on the dashboard.
You should see them scroll and click through different pages. Videos are usually NOT easy to manipulate.
Alternatively, get into a video call with the seller and request them to share their screen so you can see the dashboard “live.”
Final Thoughts
Verifying revenue for an e-commerce store on sale is a crucial step that can help save you from costly mistakes.
A business might look profitable on the surface, but without proper revenue verification, you could end up overpaying for an unsustainable or misleading income stream.
Be sure to check financial statements, payment processors, platform sales data, traffic sources, and supplier invoices. This will help you separate fact from fiction and make an informed acquisition decision.
Always remember: trust the data, not just the seller’s words.
Don’t want to deal with the long and complex revenue verification process? We’ve got you covered.
Our team of experts can take care of the due diligence for you, ensuring you get the best possible deal.
After the acquisition, we’ll help you scale your store, using proven strategies to boost its value by 2-10x, so you can exit at a higher profit.
Ready to get started? Check out our Acquisition Services and let’s make it happen.
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