What's an eCommerce Business Worth? | Bharat Kanodia | Ep. 21

Episode 21 Blog: https://www.veristrat.com/blog-valuation/whats-an-ecommerce-company-worth/

Can you tell the difference between virtual and reality?  Do you feel like Neo from the Matrix sometimes, where you cant tell the difference between reality and augmented reality?  

The world of online retail is based on this very prefix.  Let's see what an eCommerce business is worth...

There are approx. 3 million eCommerce companies operating 20 million sites globally.  The eCommerce sector is poised to hit over $1 trillion in revenue by 2022.

There are three trends affecting this rapidly evolving business - 

1. Influencers
2. Personalization
3. Artificial Intelligence

Rule of Thumb

Companies with revenue under $5M, are sold at 2-4x on SDE. Seller’s Discretionary Earnings. The range depends on - the quality of earnings, the stability of traffic, and efficiency of operations.

How to Maximize Value?

1. Focus on customer experience
2. Partnerships
3. Reduce owner involvement

Communication is at the heart of eCommerce and community building. The key to virtual reality or any kind of online experience is closely replicate the in-person experience at a touch of a button, anytime, anywhere. How close is your business to that?

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I am starting this channel to educate people on valuations and how to use them to their advantage.

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- Bharat Kanodia, ASA
Bharat has valued over 2000 businesses, real estate, industrial, and financial assets including governmental infrastructure, public and private companies, and various unique real estate assets. He has signed off on over 4,500 valuations with $2.6 trillion in assets globally. Bharat lives in the San Francisco Bay area with his family and enjoys sailing, golfing, skiing, and horseback riding.

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