Australia guides

How to value an ecommerce business in Australia

An Australian ecommerce business is valued the same way as any other trading business: as a multiple of normalised owner earnings — PEBITDA or SDE for an owner-run store, EBITDA for a larger managed one — not as a multiple of turnover. Whether stock on hand sits inside that price or is counted and paid for separately at settlement is a term of the contract, so check which one an asking price assumes. What differs online is what sets the multiple: where the traffic comes from, how concentrated the suppliers and sales channels are, and whether the domain licence, brand and customer data can actually be transferred to the buyer.

By the bizflip team · Published 30 August 2026 · Facts checked 30 August 2026 · Sources listed below

An online store is valued on the same arithmetic as a café or a plumbing business: normalised earnings multiplied by a multiple. business.gov.au sets out five common ways to put a value on a business — current market values, return on investment, business asset value, the cost of starting the business from scratch, and future profit — and for an open-market sale, an earnings multiple is the one buyers default to. What ecommerce changes is not the formula. It is which risks the buyer prices, and which assets they are actually buying.

Work out the earnings figure first

In Australia the owner-earnings measure is usually labelled PEBITDA — proprietor's earnings before interest, tax, depreciation and amortisation, meaning profit with the working owner's salary and owner-specific benefits added back. SDE, seller's discretionary earnings, is borrowed from American practice, circulates widely for online businesses, and covers close to the same ground. Either suits a smaller owner-run store, because it shows what a buyer working in the business would take home. EBITDA, with a real management wage left in the costs, is used for larger operations where the owner is not packing orders. Whichever applies, the figure has to be normalised: reported profit adjusted for one-off and personal items before anyone multiplies it.

Ecommerce normalisation has its own traps. An owner doing their own photography, copywriting, ad buying and customer service is contributing labour a buyer must pay someone to replace, and that cost belongs in the earnings figure. Ad spend cut back in the months before a sale lifts reported profit while draining the traffic that produced it — buyers reconstruct that, so sellers may as well do it first. One-off costs come out: a platform migration, a rebrand, a bulk stock buy-in.

Stock needs its own line. A contract can bundle stock on hand into the price, or count it at settlement and pay for it on top — which is why an asking price and a settlement figure can differ, and why the first question to ask of any asking price is which arrangement it assumes.

What sets the multiple online

A multiple is a risk judgement: how confident the buyer is that today's earnings will still be there next year without the seller. Online, most of that judgement lands on a handful of questions.

• Traffic source. Earnings built on organic search, repeat customers or an owned email list are treated very differently to earnings built on one paid channel that can reprice overnight.
• Concentration. One supplier, one hero product, or one marketplace account carrying most of the revenue is the kind of risk a buyer tests first — an otherwise good store gets marked down for it.
• Owner dependence. If the founder is the brand voice, the buyer, the ad manager and the complaints desk, the buyer is pricing a job as much as a business.
• Margin durability. Freight, returns and customer-acquisition costs move; a margin that only worked at one freight rate is fragile.
• Consumer-law exposure. Consumer guarantees apply to online sales the same as in-store, and they apply to overseas-based sellers supplying Australian consumers too — a category with high failure or return rates carries an obligation the buyer inherits.

Online, the transferable-assets question is the hard one

A café's value sits in a lease, a fit-out and a location, and those move through the sale contract. An online store's value sits in registrations, licences and accounts held in a particular name — each with its own transfer path and its own way of quietly failing.

• The domain. A .au domain name is licensed, not owned, and auDA states plainly that buying a business does not mean the domain name licence automatically transfers to the new owner. The incoming holder must be eligible in their own right, including the Australian Presence requirement, which a business buyer most commonly meets with a valid ABN or ACN. Where the licence transfers as part of a contract such as a business sale, it must be transferred within 28 days of entering that contract unless the agreement specifies otherwise. And a licence that is subject to a complaint to the Licence Review Panel, under internal review, or under the auDA Dispute Resolution Policy cannot be transferred at all.
• The business name. An ASIC business name is not handed over directly. The current holder starts the transfer and receives a transfer number from ASIC, the buyer registers the name using it, and ASIC cancels the old registration within 28 days. The number is valid for four months and 28 days from the transfer application; after that the name becomes available for others to register.
• The brand. Registering a business name does not give exclusive rights to use it — for exclusive rights you need a trade mark. Transferring one is an assignment: a contract between the current owner (the assignor) and the new owner (the assignee), then evidence carrying a clear statement of the agreement and both parties' signatures goes to IP Australia so the change is recorded on the trade marks register.
• Platform and payment accounts. Store, marketplace and payment-processor accounts run on each provider's own terms. Whether an account transfers or has to be rebuilt in the buyer's name is a due-diligence question, not a settlement-day one.

The customer list has rules attached

The customer database can be among the most valuable assets in an ecommerce sale, and it is the one the Privacy Act has something to say about. Most small businesses sit outside that Act — it generally does not cover a business with an annual turnover of $3 million or less — but a business that trades in personal information is covered regardless of turnover, and the OAIC's position is that a business selling assets, including the personal information held in its customer database, is trading in personal information. A sale of the whole business is the different case: where the transaction is a change of ownership or a sale of shares and the personal information is kept within the business, that is not trading in personal information.

During due diligence, the OAIC's guidance is that a vendor should avoid giving a prospective purchaser the names and other identifiers of its customers. That is workable: repeat-purchase rates, cohort behaviour, average order value, channel mix and list engagement answer the buyer's real question without handing over the list.

Verify the numbers the way a buyer will

The advantage of selling online is that almost everything is machine-checkable. Store admin reports, payment-processor payouts, ad account spend and analytics can be reconciled against the BAS and tax returns for complete Australian financial years — 1 July to 30 June — and a serious buyer will do exactly that. A common gap sits between platform gross sales and reported GST turnover; it usually has an innocent explanation — refunds, marketplace fees netted off, multiple processors — that is far easier to give before an offer than after one. GST registration is required once GST turnover — gross business income minus the GST included in sales, with some further exclusions — reaches $75,000 or more, and there are 21 days to register once it does, so a store trading above that threshold without it is a due-diligence problem as well as a tax one.

Structure changes the number

Whether the deal is an asset sale or a share sale changes both the tax outcome and what the buyer receives. A sale can be GST-free as a supply of a going concern only where the conditions in the GST law, explained in the ATO's public ruling on the sale of a going concern (GSTR 2002/5), are met: the sale is for payment (what the law calls consideration), the buyer is registered or required to be registered for GST, both parties have agreed in writing that the supply is of a going concern, and the seller supplies all of the things necessary for the continued operation of the enterprise and carries the enterprise on until the day of the supply. For an online business, "all of the things necessary" is a live question — the domain licence, platform accounts, supplier arrangements and customer data all have to be on that list.

If there are staff — a warehouse, a customer-service team — the Fair Work Act's transfer-of-business rules can apply, but only where the buyer takes them on. A transfer of business happens when an employee starts with the new employer within three months of ending their job with the old one, doing the same or nearly the same work, and there is a connection between the two employers — selling the business's assets to the buyer is such a connection. Where that happens, the new employer has to recognise the employee's service with the old employer for most entitlements, including sick and carer's leave, requests for flexible working arrangements, and parental leave. Five are treated differently: redundancy, annual leave, long service leave, unfair dismissal and notice of termination. A buyer that is not an associated entity of the seller — the ordinary case in a trade sale — can choose not to recognise service for redundancy or annual leave, and the seller then pays redundancy on termination and pays out the untaken accumulated leave. Those are seller-side cash costs, so price them before going to market rather than discovering them at settlement. The old employer also has to give the new employer the employment records of any transferring employee.

Getting to an actual number

None of this produces a price. It tells you which numbers to fix, which risks a buyer will price, and which assets must be provably transferable before anyone pays for them. For a figure you would rely on in a negotiation, a bank application or a legal process, have an accountant, a business adviser or a business broker normalise your earnings and apply a multiple to your circumstances. Sector multiple ranges are set out in the valuation guides, and what comparable online businesses are listed for is a useful sanity check — though asking prices are not sale prices.

Sources

Every load-bearing claim in this guide, and where it comes from:

• Lists five common ways to value a business — "current market values", "return on investment", "business asset value", "cost of starting a business from scratch" and "future profit of a business" — and recommends "getting professional advice on how to value your business through your accountant, a business adviser or a business broker". — business.gov.au (Australian Government)
• "When a consumer shops online, all the usual consumer rights apply." An overseas-based business providing goods or services directly to Australian consumers "must follow all the usual consumer laws that apply to selling products and services, including the basic rights known as consumer guarantees". — Australian Competition and Consumer Commission
• "Buying a business does not mean the domain name licence is automatically transferred to the new owner." Both parties must be eligible to hold the licence at the date of transfer; where it transfers under a contract such as the sale of a business, "you must transfer the licence within 28 days of entering the contract or agreement, unless the agreement specifies otherwise"; and a licence cannot be transferred to another person while it is subject to a complaint to the Licence Review Panel, under internal review, or under the auDA Dispute Resolution Policy (auDRP). — auDA (.au Domain Administration)
• The Australian Presence requirement means a .au domain name represents a person or organisation with a genuine connection to Australia; "the most common ways to meet the Australian Presence requirement are by holding a valid ABN or Australian Company Number (ACN), or being an Australian citizen or permanent resident", and it is validated "when a .au domain name is created, renewed or transferred to a new registrant". — auDA (.au Domain Administration)
• "The current business name owner must start the business name transfer. We will send them a transfer number." The new owner registers the name using that number; once the transfer is submitted ASIC "will cancel their registration within 28 days"; and "the transfer number is valid for 4 months and 28 days from the date of the transfer application. After that, the business name will be available to others." — Australian Securities and Investments Commission
• "Registering a business name doesn't mean you have exclusive rights to use it. If you want exclusive rights to your business name, you need a trade mark." — business.gov.au (Australian Government)
• Assigning a trade mark requires "a contract agreement between the current owner (the 'assignor') and the proposed owner (the 'assignee')", with supporting evidence including "a clear statement about the agreement and transfer" and "a signature from both parties", after which the assignment is recorded in the trade marks register. — IP Australia
• "A business which sells assets, including personal information held in their customer database, is 'trading in personal information'"; "the Privacy Act covers any organisation trading in personal information"; and "when providing information about its customer base, a vendor should avoid providing a prospective purchaser with the names and other identifiers of its customers". — Office of the Australian Information Commissioner
• "The sale of a whole business is not trading in personal information. The Privacy Act doesn't apply if the sale involves a change of ownership or sale of shares of the business, but the personal information they hold is kept within the business." — Office of the Australian Information Commissioner
• "A small business is one with an annual turnover of $3 million or less"; small businesses are generally not covered by the Privacy Act, but a business that trades in personal information is covered regardless of turnover. — Office of the Australian Information Commissioner
• You must register for GST "when your business or enterprise has a GST turnover (gross income from all businesses minus GST) of $75,000 or more (the GST threshold)", and "once you are required to register for GST, you need to do so within 21 days". GST turnover is total business income minus GST included in sales, input-taxed sales and sales not connected with Australia. — Australian Taxation Office
• GSTR 2002/5 quotes section 38-325 of the GST Act: the supply of a going concern is GST-free if "the supply is for consideration", "the recipient is registered or required to be registered" and "the supplier and the recipient have agreed in writing that the supply is of a going concern"; and a supply of a going concern is a supply under an arrangement under which "the supplier supplies to the recipient all of the things that are necessary for the continued operation of an enterprise" and "the supplier carries on, or will carry on, the enterprise until the day of the supply". — Australian Taxation Office (ATO Legal Database, GSTR 2002/5)
• "A transfer of business is when all of the following happen: an employee begins working for the new employer within 3 months of ending their job with a previous employer; the employee's duties are the same or nearly the same as they were for the previous employer; there is a connection between the previous and new employers" — including where "the old employer sells some or all of the businesses assets to the new employer". — Fair Work Ombudsman
• On a transfer of business the new employer "has to recognise an employee's service with the old employer when working out most of their entitlements", including sick and carer's leave, requests for flexible working arrangements and parental leave, but "there are some entitlements that the new employer might not have to recognise. These include: redundancy, annual leave, long service leave, unfair dismissal, notice of termination." A new employer that isn't an associated entity can choose not to recognise service for redundancy — "the old employer will then need to pay redundancy to the employee upon termination" — and can decide not to recognise service for annual leave, in which case "the old employer has to pay out the employee's untaken accumulated annual leave". — Fair Work Ombudsman
• "Where there has been a transfer of business, the old employer has to give the new employer records of any transferring employee." — Fair Work Ombudsman
• "APES 225 applies to all members who provide an estimate of value for a business, business ownership interest, security, intangible asset, or other asset or liability to either a client or an employer", and it defines valuation engagements, limited scope valuation engagements and calculation engagements. — Accounting Professional & Ethical Standards Board (APESB)
• "In Australia the financial year runs from 1 July to 30 June." — business.gov.au (Australian Government)

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