The formula
Most Amazon FBA businesses are valued as seller's discretionary earnings (SDE) multiplied by a multiple. Larger brands with a management team are often valued on EBITDA instead. Published guides commonly put established FBA businesses at about 2.5x to 4.5x annual SDE, with the multiple set by margins, product diversity, operations and risk.
How to calculate SDE
Start with net profit for the last 12 months. Add back the owner's salary and benefits, personal expenses run through the business, and genuine one-off costs such as a product launch that will not repeat. Do not add back anything a new owner will still have to pay, such as advertising, inventory, storage or a virtual assistant. Our guide to <a href="https://siteappraiser.com/blog/sde-vs-ebitda-for-website-valuation/">SDE vs EBITDA</a> explains which one buyers use at each size.
A worked example
| Item | Annual |
|---|---|
| Net profit | $96,000 |
| Add back: owner salary | $30,000 |
| Add back: one-off product launch | $6,000 |
| SDE | $132,000 |
| Value at 3.0x | $396,000 |
| Value range at 2.5x–4.5x | $330,000 – $594,000 |
Illustrative figures. Inventory on hand is often paid for separately, at cost, on top of the multiple.
What raises the multiple
Registered trademarks and Amazon Brand Registry. Several products rather than one, with no single product above roughly half of revenue. Sales on channels beyond Amazon, such as a Shopify store. Healthy margins after advertising. At least two to three years of steady or growing sales, and reliable suppliers with written terms.
What lowers it
Dependence on one product or one supplier. Rising advertising costs eating into margin. Account health warnings, suspended listings or policy issues. Easily copied commodity products with many competing sellers. Heavy owner involvement in sourcing, listings and customer service.
Where FBA businesses sell
Empire Flippers and Flippa both list Amazon businesses and publish valuation guides; larger brands often go through brokers or are bought by aggregators. Our <a href="https://siteappraiser.com/blog/best-website-brokers/">broker comparison</a> and <a href="https://siteappraiser.com/blog/how-much-is-an-ecommerce-store-worth/">ecommerce store valuation guide</a> cover the options. For a quick range, run your numbers through our <a href="https://siteappraiser.com/tool">free appraisal</a>.
- Value = SDE (or EBITDA for larger brands) × multiple.
- Established FBA businesses commonly sell for about 2.5x–4.5x annual SDE.
- Only add back costs a new owner will not have to pay.
- Brand registry, product diversity and channels beyond Amazon raise the multiple.