The success of your business sale will likely come down to just three things during due diligence. On the Ecommerce Exits Podcast, Chris Yates, whose whole business is performing ecommerce due diligence, framed this as passing three core tests. If you can’t get these right, it doesn’t matter how good your top-line revenue looks.
The first and most important test is your financial health. This is where most deals fall apart. As Tyler Jefcoat explains on The eCommerceFuel Podcast, you need to have pristine, accrual-based accounting records ready for deep inspection. This isn’t just about having a P&L statement; it’s about being able to prove every number on it, justifying every add-back, and building a case for your seller’s discretionary earnings (SDE) or EBITDA. A buyer will bring in their own accountants to look for weaknesses. If your books are messy or you can't confidently explain the numbers, buyers lose trust instantly and assume you’re hiding something.
The second test is the defensibility of your operations. Can this business run successfully without you? Bill D'Alessandro points out in "Demystifying the Due Diligence Process" that a buyer is acquiring a system, not just a product. They will verify your supply chain, checking for dependencies on a single factory or personal relationship. They’ll review your contracts and look for secured intellectual property like trademarks. Without documented standard operating procedures (SOPs), a stable supply chain, and protected IP, a buyer sees a ton of risk. They might see a business that’s one crisis away from collapsing.
Finally, the third test is the verifiability of all your claims. Everything you’ve asserted in your listing and initial conversations must be backed up with hard evidence. This is the essence of preparing an ecommerce business for sale. As John Di Giacomo discusses on the EcomCrew Ecommerce Podcast, this gets deep into the legal weeds. Did you handle sales tax correctly? Are your customer data practices compliant? Do you have formal agreements with all contractors and suppliers? A buyer isn’t going to take your word for it. They expect a data room filled with organized documentation that proves the business is legally and operationally sound. Passing this test shows you’re a professional operator and gives the buyer the confidence to close the deal.