Ecommerce Due Diligence Checklist: What Buyers Verify Before Closing

An ecommerce due diligence checklist is the list of everything a buyer will verify between the signed letter of intent and closing: revenue tied to platform payouts, ad spend and acquisition costs, customer retention, inventory, suppliers, trademarks, account health and sales tax. Sellers who work through the same list first close faster and give up less in renegotiation.

This guide is for people who run Shopify or DTC brands, FBA businesses and multichannel stores. It shows what buyers check in each area, which documents prove it, the red flags that reopen price talks, and how to run your own sell-side review before a buyer ever opens the data room.

Key Takeaways

• Buyers rebuild your revenue from Shopify, Amazon and payment processor payout reports, then match it to bank deposits. A P&L that does not reconcile is the most common reason a price drops late in a deal.
• Ecommerce diligence goes beyond a general business review: ad accounts, customer cohorts, inventory aging, platform account health and multistate sales tax all get their own workstream.
• Most small and mid-sized online deals spend roughly 30 to 90 days in diligence after the LOI. Missing documents, not buyer suspicion, cause most delays.
• A quality of earnings report is common once a lender or institutional buyer is involved. A seller-side version can surface problems while you still control the timing.
• Every issue you disclose early is a negotiating point. Every issue a buyer finds on their own becomes a reason to cut price or add a holdback.

What Due Diligence Means When You Sell an Online Store

In any acquisition, due diligence is the buyer’s investigation into whether the business is what the seller described. With a traditional company, that means tax returns, leases, equipment and employees. With an online store, most of the evidence lives in software: the Shopify admin, Amazon Seller Central, Stripe or PayPal, Google Analytics, Meta and Google Ads, the email platform and the 3PL portal.

That is good news for prepared sellers. Data held by a platform is hard to dispute, so a buyer who can see it directly tends to trust it. It is bad news for owners whose bookkeeping drifted away from those platforms, because the gap shows up within the first week. Experienced ecommerce business brokers spend much of their pre-market time closing exactly that gap.

Diligence usually begins once you sign a letter of intent and grant the buyer an exclusivity period. From that point, the buyer and their accountants, lawyers and lenders work through a request list. Your job is to answer it quickly, completely and consistently. To see where diligence sits in the full sale timeline, read how to sell an ecommerce business, which walks through every phase from first valuation to wire.

The Ecommerce Due Diligence Checklist: 10 Areas Buyers Verify

The table below is the core of this guide. Use it as a working due diligence checklist: for each row, gather the evidence in the third column before you go to market, and fix or document anything in the last column.

Ten rows seem manageable, but each one hides a dozen document requests. The sections below explain how buyers work through the areas that cause the most trouble in online deals.

Financial Diligence: Making Your Numbers Match the Platforms

Revenue reconciliation

Expect the buyer’s accountant to rebuild your revenue from source data rather than reading your P&L. On a Shopify store, that means payout reports and order exports. On Amazon, it means settlement reports and the date range transaction view. For multichannel brands, it means doing the same for every marketplace and processor, then tying the total to bank deposits month by month.

Small differences are normal. Refund timing, chargebacks, currency conversion and payout schedules all create noise. What buyers will not accept is a persistent gap with no explanation. Prepare a reconciliation worksheet yourself, with a short note for any month that does not tie.

Add-backs and recast earnings

Most online stores sell on a multiple of seller’s discretionary earnings (SDE) or adjusted EBITDA, so every add-back you claim is worth several times its face value. Buyers test each one: is it truly one-time or personal, and is there an invoice? A one-off agency rebuild usually survives. A “one-time” product launch that happens every spring usually does not.

The pillar post on how to value an ecommerce business explains how earnings, add-backs and multiples fit together, and why a lower add-back you can prove is often worth more than a higher one you cannot.

Margins, fees and the hidden costs

Buyers look at gross margin by SKU, not only in total. They want landed cost (product, freight, duties and inbound shipping), plus platform fees, payment fees, fulfillment, storage and returns. Amazon sellers should expect questions about FBA fee changes and long-term storage charges. DTC brands should expect questions about free shipping thresholds and return rates.

Do You Need a Quality of Earnings Report?

A quality of earnings report is an independent accounting review of how much sustainable profit a business really produces. It is narrower than an audit: instead of certifying financial statements, it tests revenue, normalizes earnings, reviews add-backs and examines working capital. Lenders, private equity firms and larger strategic buyers often require one before closing.

For smaller deals, the buyer may do a lighter version themselves. For larger or more complex ones, a QoE firm hired by the buyer will run it. Some sellers commission their own sell-side review before going to market. It costs time and money up front, but it lets you find and fix problems on your schedule rather than learning about them from the buyer’s report during exclusivity.

Whether a sell-side QoE makes sense depends on your deal size, how clean your books are and who is likely to buy. A broker who has seen how lenders and institutional buyers react to your type of business can usually tell you quickly.

Operational Diligence: Ads, Customers, Inventory and Suppliers

Ad accounts and acquisition costs

Paid media is usually the largest controllable expense in a DTC brand, so buyers study it closely. They compare spend to revenue month by month, look at return on ad spend by channel and estimate a blended customer acquisition cost. They also check whether you cut spending in the months before listing, which flatters trailing profit but often shrinks revenue soon after.

Give read-only access rather than screenshots. Buyers trust what they can filter themselves.

Customer cohorts and retention

Two stores with the same revenue can be worth very different amounts if one keeps its customers and the other buys new ones every month. Buyers ask for cohort tables showing how many customers from each month came back to order again, plus lifetime value, subscription churn and the share of revenue from repeat buyers. If a single wholesale customer or marketplace account produces a large share of sales, expect them to ask what happens if it leaves.

Inventory counts and aging

Inventory is often handled separately from the purchase price, so buyers verify it carefully. They will want a count by location (your warehouse, a 3PL, Amazon fulfillment centers, goods in transit), a valuation at landed cost and an aging report. Slow-moving or obsolete stock is usually excluded or discounted, and the final count often happens close to the closing date.

Suppliers, 3PLs and team

Buyers want to know who makes your products and whether that relationship will survive a change of owner. Written supplier terms, even a simple agreement covering pricing, minimums and lead times, carry more weight than a long email thread. The same applies to 3PL contracts, freelancers and agencies. Documented standard operating procedures show that the business does not live in your head.

Platform-Specific Checks for Shopify, Amazon and Multichannel Stores

The checklist above applies to every online store, but each sales channel adds its own items. The table below summarizes what buyers typically add for each model.

Amazon describes its Account Health Rating as a score from 0 to 1,000, with 200 or above shown as healthy. Buyers usually ask for screenshots of the current rating and the history of any policy warnings, and many will want to see the dashboard live on a screen share. Owners of Amazon FBA brands should settle open policy issues before they list.

For Shopify sellers, the mechanics of handing over the store, domain and apps come after diligence, but buyers check early whether anything blocks a clean transfer. Our article on selling a Shopify store covers the ownership transfer rules in detail.

Legal, IP and Sales Tax: The Items That Delay Closings

Legal diligence in an ecommerce deal is usually lighter than in a company with real estate or a large workforce, but three items cause more delays than everything else combined.

1. Trademarks and brand assets. Buyers confirm that the trademarks, domains, social handles and product designs belong to the business and can be assigned. In the US, trademark assignments are recorded with the USPTO after closing. A mark filed in the founder’s personal name, or by a former agency, needs to be sorted out first.
2. Contractor IP. Product photos, packaging designs, website code and copy are often created by freelancers. Without a written assignment of rights, the buyer may not be able to prove the business owns them.
3. Sales tax exposure. Since the Supreme Court’s 2018 decision in South Dakota v. Wayfair, states can require remote sellers to collect sales tax once they pass an economic nexus threshold, commonly $100,000 in annual sales into the state. Marketplaces usually collect tax on their own orders, but your direct-to-consumer sales are your responsibility. Buyers look for states where you crossed a threshold without registering, because that liability can follow the business.

None of this requires you to become a tax lawyer. It does mean you should have a sales tax advisor review your nexus position before going to market, so any exposure is quantified and disclosed rather than discovered. This section is educational only and is not legal or tax advice; consult a CPA or tax attorney about your situation.

Sell-Side Due Diligence: Run the Checklist Before the Buyer Does

Sell-side due diligence simply means reviewing your own business the way a buyer will, before the buyer starts. It is the most useful thing on any selling a business checklist, because it turns surprises into disclosures. Work through these steps two to six months before you plan to list:

1. Reconcile 24 to 36 months of revenue from every platform to bank deposits, and write down the reason for any month that does not tie.
2. Build an add-back schedule with an invoice or receipt for each item, and remove anything you cannot defend.
3. Export cohort, repeat purchase and subscription reports, and note any one-off spikes from promotions or viral moments.
4. Count inventory by location, age it, and set aside stock you would not want to pay full price for yourself.
5. Collect supplier, 3PL, agency and contractor agreements, and put informal arrangements in writing.
6. Confirm that trademarks, domains, social accounts and marketplace accounts are registered to the business.
7. Ask a sales tax advisor to review where you have nexus and whether you are registered there.
8. Gather screenshots of platform account health, policy notices and any disputes, with a short explanation of each.

If you already know a weakness exists, a declining channel or a supplier you are about to replace, put it in writing early. Buyers are more forgiving of a risk they were told about than one they found. A business with clean answers to this list also supports a stronger price, so it is worth running your numbers through our business valuation calculator after the clean-up to see where you stand.

How to Organize the Data Room

A virtual data room is a secure shared folder where buyers review documents. The structure matters less than consistency: buyers should find each item where they expect it, with file names that say what the file is and what period it covers. A simple layout that works for most online stores:

• Financials: monthly P&Ls, balance sheets, tax returns, bank statements, add-back schedule, reconciliation worksheet
• Platforms: payout and settlement reports, account health records, app and tool list
• Marketing: ad account summaries, analytics exports, email and SMS reports
• Customers: cohort and retention reports, subscription data, top customer list for wholesale accounts
• Inventory and operations: inventory and aging reports, supplier and 3PL agreements, SOPs
• Legal: entity documents, trademark and domain records, contractor agreements, sales tax filings

For the entity, contract and tax records that sit beside these ecommerce folders, see our list of the documents needed to sell a business.

Red Flags That Cost Sellers Money in Diligence

Most failed or repriced ecommerce deals trace back to a short list of problems. Watch for these in your own business:

• Revenue or profit that cannot be traced to platform reports and bank deposits
• A sales dip during diligence, often caused by an owner who is distracted by the sale
• Ad spend cut before listing, making trailing profit look better than the business can sustain
• Undisclosed platform warnings, suspended listings or a falling account health score
• Key assets, such as trademarks or seller accounts, held outside the business
• Uncollected sales tax in states where the store crossed nexus thresholds

When buyers find one of these, they rarely walk away immediately. They usually lower the price, shift part of it into an earnout, or ask for a seller holdback that sits in escrow until the risk passes.

When to Talk to a Broker

If your store produces meaningful profit and you are planning an exit within the next year or two, speak with an advisor before cleaning up the books on your own. A broker who works on online deals every week knows which questions buyers and lenders ask for your model, which add-backs survive, and which disclosures belong in the offering memorandum rather than in week three of diligence.

When you decide to sell your ecommerce business, DealPipe is 100% performance-based. There is no upfront fee or retainer, you owe a success fee only after a closing, and we set out its structure for your specific deal in a free and confidential consultation.

Your Next Step

Start with the 10-row checklist above and mark each area green, yellow or red. Then get a free valuation from a DealPipe advisor to see what a buyer is likely to pay once the yellow and red items are fixed, and which of them are worth fixing before you list.