How We Would Turn A 3x Multiple E-commerce Store Into A 5x Exit
What A 3x vs 5x E-commerce Multiple Really Means
An e-commerce valuation multiple simply shows how many years of profit a buyer would pay upfront.
If a store made $500,000 in yearly profit, a 3x exit would equal $1.5 million. A 5x exit would equal $2.5 million.
That's a whopping $1 million gap in between there!
Most small e-commerce stores sell between 2x and 4x.
This is the same range you'll find for 99% of the businesses on our ecommerce businesses for sale section.
Likewise, top marketplaces like Empire Flippers and Flippa also publish deal ranges that show this spread.
The e-commerce stores that reach 5x multiple tend to share characteristics like:
Strong repeat sales
Clean books, and
Stable traffic
Now that you’ve got an idea what hitting 5x multiple is like for your e-commerce business, let’s look at proven techniques for hitting this goal.
Sell Your E-Commerce Business Fast
At TrendHijacking, we help you connect with serious investors who are ready to buy e-commerce businesses like yours.
We check all the numbers and present your business in the best light. Our pre-vetted buyers skip the “is this real?” stage, so you can get a better price and close faster.
Submit your business details today and make selling simpler, faster, and more profitable.
Step 1: Lock In Profit First
Profit sets the floor of the exit, so we would start by running a full cost review.
Then, we'd take the following crucial steps:
Cut ads that show low return
Shift our spend into ads with high return
Next, we would review shipping and fees and ask carriers for better rates.
Even better, we'd consider switching to flat rate shipping if it helps cut costs.
We would also test the price and raise prices on top sellers in small steps.
As Bain and Company reports, even a 5% price lift can raise profit by much more when demand stays stable. (Source).
Step 2: Build Repeat Sales
It goes without saying that repeat customers increase predictable revenue and thus the exit value.
Therefore, our next step would be to build simple flows that bring buyers back.
We would take the following steps:
Set up email and SMS campaigns: a welcome flow, a cart recovery flow, and a post-purchase flow
Introduce a loyalty program that rewards repeat purchases and reviews
Track repeat buyer rate each month to measure progress
According to Klaviyo, brands that use email and SMS effectively can generate over 30% of total revenue from repeat buyers. (Source).
Showing a rising repeat rate would make the store more valuable to buyers.
Step 3: Cut Traffic Risk
A store that depends on one traffic source scares buyers.
If you want to fetch a good price for your established e-commerce brand, you want to work on diversifying the traffic channels long before you can even think of listing it.
At Trend Hijacking, one of the crucial steps we take to position our partners’ ecommerce businesses for valuable exits is diversifying where customers come from.
In this case, we would implement the following steps:
Build SEO pages targeting buyer intent using product guides and simple how-to posts
Grow the email and SMS lists to increase owned traffic
Maintain paid ads, but ensure they do not drive more than half of total sales
A 2024 BrightEdge report shows that organic search alone drives over 50% of measurable web traffic for many sites.
Balance paid and owned traffic, and this would make your store safer and more attractive.
Step 4: Fix The Supply Chain
Stockouts hurt sales for e-commerce businesses.
What’s more, a stockout can be a red flag for potential buyers.
With this in mind, we would make sure inventory stays reliable for an online shop targeting a 5x exit.
To accomplish this, we’d undertake the following crucial steps:
Set reorder points and keep at least 60 days of stock for top sellers
Add a second supplier when possible, to reduce dependence on one source
Forecast demand based on the last six months of sales and add a small buffer for safety
Dual sourcing and simple demand planning would reduce risk and make the store more appealing to buyers.
Sell Your E-Commerce Business Fast
At TrendHijacking, we help you connect with serious investors who are ready to buy e-commerce businesses like yours.
We check all the numbers and present your business in the best light. Our pre-vetted buyers skip the “is this real?” stage, so you can get a better price and close faster.
Submit your business details today and make selling simpler, faster, and more profitable.
Step 5: Clean Up The Numbers
We’ve worked with over 490 investors (buyers) and transacted over $41.5M value of acquired businesses at Trend Hijacking.
And here’s one thing we can tell you for a fact:
Buyers value transparent financials when looking at potential businesses to acquire.
What does this tell you?
Before thinking of selling your business, ask yourself if the financials are in order.
(Here’s a 9-point checklist for selling your e-commerce business)
If we were to take a store from 3x to 5x, we would make sure we organize all the financial data into one system, like QuickBooks or Xero.
We would take the following steps:
Separate owner pay and one-time costs from real profit
Generate monthly reports showing revenue, profit, traffic, and repeat buyer metrics
Make sure the numbers clearly reflect sustainable cash flow
This would result in clean financials, which can help raise a multiple of up to one full turn.
Buyers are willing to pay more when they see accurate, easy-to-read records.
Step 6: Add One Clear Growth Lever
A proven growth lever is like a single handle on a machine: pull it the right way, and it moves the whole system.
In other words, a proven growth lever increases perceived upside when it’s time to exit.
To add a proven growth lever, we would focus on one opportunity that could drive measurable growth and show early results.
We would take the following steps to achieve this:
Identify one scalable opportunity, such as a new ad channel, product line, or market
Run small tests to prove early results
Present data that shows the potential revenue and profit lift
For example, adding Amazon as a sales channel could open access to over 60% of US shoppers who start product searches there (Statista 2023).
Showing just one clear lever that works would make the store more attractive and justify a higher multiple.
Step 7: Show The Story
Because buyers respond to clarity, we would also make sure to create a concise story that explains the e-commerce brand, growth plan, and key metrics.
This is as simple as doing the following:
Include charts for profit, traffic mix, and repeat sales
Highlight improvements we would make to reduce risk and increase growth
Package the information so brokers and buyers can quickly understand the opportunity
A clear story helps justify a higher multiple for your e-commerce brand and makes the sale smoother.
Final thoughts
You do not need magic to turn your 3x e-commerce store valuation into a 5x exit.
You just need to take the above steps to help boost your store's profit, bring repeat buyers, diversify traffic, and prepare clean financials.
Overall, these simple steps will help you raise profit and cut risk. And buyers will pay you the higher price.
Sell Your E-commerce Store With Trend Hijacking
If you’re ready to sell your e-commerce business, we can help you exit at the best value possible.
Unlike marketplaces where anyone can list, we screen and validate every business before sharing it with our investor network.
This creates higher trust, smoother negotiations, and better outcomes.
We guide you through the process, showcase your store’s value, and help you reach serious buyers who are ready to pay a fair price for your hard work.
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