How Much Is Your Online Store Worth? Behind the Scenes of E-Commerce M&A

In this episode of Rozmowy Logistyków, Piotr Skobało talks with Krzysztof Murzyn, an advisor with nearly 20 years of e-commerce experience, about the behind-the-scenes of mergers and acquisitions (M&A) in this industry. They discuss when and why it's worth selling an online store, and what really determines its value.

THREE REASONS OWNERS SELL THEIR E-COMMERCE BUSINESS

The most common scenario (about half of cases) is economic pressure — the company couldn't withstand rising fixed costs (energy, wages, transport) against insufficient margin, and is posting a loss for the third year running despite tens of millions in revenue. The second scenario is an unexpected offer: someone knocks and asks about a merger or sale, and the owner isn't prepared and doesn't know what metrics to negotiate on. The third, rarest and most favorable: a planned exit, where the owner spent years preparing the company for sale, has processes and documents in order — such a business draws considerably more buyer interest, because it's sold from a position of strength, not necessity.

WHEN THERE'S NO BUYER, DESPITE WANTING TO SELL

A lack of value for a potential buyer is usually the result of competing purely on price (e.g. a children's clothing distributor selling known brands with low customer loyalty and shrinking margin over the last three years) — competitors would rather let such a company "bleed out" and organically absorb its reach than pay for the company itself. A classic rule from the US M&A market: a recession is a good time for buyers and a bad one for sellers — if you had a tough year or made investments that will only pay off in a year or two, it's better to wait to go to market than sell at the bottom of a profit-multiple-based valuation.

WHAT REALLY DETERMINES VALUE: MARGIN, TURNOVER, AND WORKING CAPITAL

Beyond revenue and profit, investors increasingly look at average margin, price and promotion management, and a precise split between fixed and variable costs — the key question is whether a company can assign a real cost (e.g. packing and shipping running to a dozen-odd złoty per parcel) to every operation. Working capital — how much money is "frozen" in stock — is one of the main metrics assessed from a supply chain perspective, especially relevant when interest rates are high, since the cost of frozen capital is quantifiable. More and more entrepreneurs today can answer a question about their inventory turnover cycle (typically 3 months, with 20-30% of "dead stock" sitting for over a year) — a sign of operational maturity that was missing not long ago.

HOW TO PREPARE A COMPANY FOR SALE A YEAR OR TWO EARLY

Concrete actions recommended for entrepreneurs planning an exit: start measuring all operations and costs; calculate the real cost of acquiring a sale (spend on ads, influencers, content marketing relative to new customers) and work to lower it; analyze margin separately for each sales channel (own store, Allegro, Amazon — companies often can't say which channel is most profitable); consider outsourcing instead of further expanding your own team and warehouse, to convert a fixed cost into a variable one before the deal; and build a plan for testing new sales channels and organic reach at the top of the funnel.

THREE WAYS TO VALUE AN ONLINE STORE

Multiple-based valuation (revenue × multiple, profit × multiple, gross margin × multiple) is always a reference point, but rarely the only method. Replacement-cost valuation calculates how much time and money it would take to build the same assets from scratch (technology, content, review base, products) — if rebuilding would take a year and a half and a million złoty plus the risk of failure, buying a ready-made business can be cheaper and more certain. A third method looks at e-commerce as a traffic generator: the value of hundreds of thousands of monthly organic visits can be converted into the equivalent cost of the same traffic bought through Google ads, giving a "portal" valuation independent of sales themselves. In deals with funds, a DCF (discounted cash flow) method also comes into play — a 24-month cash-flow projection, with the payout to owners split into tranches contingent on hitting the forecast.

MARKET EXAMPLES: HOW PREPARATION TRANSLATES INTO VALUATION

eObuwie sold 74% of its shares to the CCC group in 2016 for about 125 million PLN (valuing the whole company at around 160 million), having earlier prepared by building the largest multi-brand product catalog in Poland, a clear international expansion roadmap, its own digital marketing team, and modern, centralized shipping logistics — the remaining 25% stake, held by the founder, grew after 6-7 years to a value of over 500 million PLN. The online drugstore Trini built value through an intensive content plan (guides, reviews, product recommendations), which generated thousands of organic visits and attracted a natural-cosmetics manufacturer. The Fore Swiss brand built value through strong brand positioning, an extensive influencer channel, high margin, and its own supply chain from a factory abroad — which caught the interest of the Morele.net conglomerate as an accelerator for its private-label brands.

TRENDS FOR THE NEXT FEW YEARS: MARKETPLACE-IFICATION AND DIRECT-TO-CONSUMER

Two dominant directions: further marketplace-ification of sales (with room for specialized vertical marketplaces in specific domains, like Decathlon or Black Red White in furniture) and consolidation of the fragmented market of small e-commerce players — companies below 10 million PLN in revenue will find it increasingly hard to compete technologically and operationally with bigger players, forcing them to merge into groups. A third, especially promising trend is the growth of direct-to-consumer sales by manufacturers — acquiring a smaller, specialized e-commerce "pure player" lets a manufacturer instantly gain the team, competencies, and processes needed to launch direct sales, capturing the entire retail margin instead of sharing it with intermediaries.