PART 1: Ultimate Guide of 150 Questions to Consider Asking When Buying an E-Commerce Business

PART 1: Ultimate Guide of 150 Questions to Consider Asking When Buying an E-Commerce Business

Buying your first business or your tenth is not something you should rush into. We highly encourage all business buyers to ask as many questions as possible until they feel comfortable with the business they are purchasing. Due to the nature of some companies, there are some things you may not be able to fully capture and understand by asking, but this guide will help you learn most of the major areas of a business.

While there are 68 questions here, we suggest choosing only the questions most relevant to the business you are speaking with. Upon discussions, you may have further questions relating to the answer which will vary depending on the complexity of the company.

Table of Contents

Business Context
Business Sale
Business Performance

    Business Context


    1. How did you start your business?
    2. When was the business established?
    3. How did you get the inspiration to start your business?
    4. How did you get your first customer?
    5. Positioning
    6. Who are your major competitors?
    7. How is your business service or products differentiated from your competitors?
    8. Among your direct competitors, who has the largest market share?


    1. Do you have a management team, and what are their roles and experience?
    2. How long as your management team been working together?
    3. Would your management team be interested in continuing to work post-sale?
    4. Are you the founder of the business? If not, who are the other founders and why did they leave?
    5. If there are multiple founders, how is the co-founder relationships and have there been any major disputes?


    1. Please provide an overview of the major shareholders (if any) and their ownership.
    2. If you are not the original owner of the business, how did you take possession of the business?
    3. Are there multiple classes of stock and how do these classes differ?
    4. Does your corporation have any by-laws which require a certain per cent of shareholders to agree to a sale of the business?


    1. How large is your team and how has the size of the team evolved throughout the business?
    2. How does your team work? Are they in a single office, multiple locations or remote?
    3. How is your team compensated? Are they all on a fixed salary, or are any of them receiving commission/performance payments or equity?


    1. What legal structure is your company formed as and in what country?
    2. Does the company have any pending litigation?
    3. What have been the legal disputes for the past 12 months and resolution of them if they are solved?
    4. Do you have any trademarks, patents, copyrights or intellectual property? Please provide links to any applicable protections, when they were registered, where they are registered, and when they expire.
    5. What is the feasibility of registering legal protections in countries the business does not currently have them in?
    6. Have you used your legal protections of any above and what has been the outcome?
    7. What are the recurring costs of maintaining the previously mentioned legal protections?

    Business Sale


    1. How would you describe the current state of your business sale?
      1. Exploring what is possible
      2. Actively speaking to multiple parties
      3. In the final stages of speaking to a potential acquirer
      4. Other
    2. Why has the business decided to sell?
    3. What is your desired time frame to sell the business?
    4. If the business is unable to find an acquirer at a desired price, would the business continue to operate?
    5. Are you open to selling a portion of equity for cash instead of the entire business?
    6. What degree of support and assistance can you provide to the new owner and for how long?


    1. Is the entire business being sold, or purely a portion of the assets of the business (whether physical or digital assets)?
    2. If only certain assets are being sold, please specify which ones and why only certain assets have chosen to be sold.
    3. Are any trademarks, patents, copyrights or intellectual property included in the sale?
    4. Please list any active agreements you have. Are all supplier relationships, vendor agreements, wholesale contracts and other agreements included in the sale?
    5. What agreements would a new owner have to renegotiate?

    Business Performance


    1. What currencies does your business accept orders in?
    2. If you only accept orders in a single currency, does this currency match with the local currency of your top or major markets?
    3. Do you use any other currencies to pay suppliers, employees or other costs?
    4. How do market currency fluctuations affect your business performance?
    5. What accounting principles does your business use?
    6. Can you provide a copy of your most recent P/L statements?
    7. If P/L statements are not at least 3 months recent: When would you be able to provide an up to date copy of P/L statements?
    8. Can the business fund itself with cash purely from operations or does it require a line of credit or other funding sources to manage cash flows?
    9. If a new owner was to avoid having credit facilities, what amount of cash injection would be required?
    10. Does the current management have a strong grasp of the financials of the business?


    1. What are your sales channels and what is the breakdown of revenue for each?
    2. Are there any sales channels you previously pursued? Why have you withdrawn from them and would you suggest a new owner attempt them again?
    3. What is the distribution of revenue by products? Is there a single product which comprises most of your sales or is it evenly distributed?
    4. Is your business prone to any seasonal fluctuations and how have you tried to manage these?
    5. Have you been in a position where you have had to deal with high demand by either rejecting sales or increasing prices due to supply or operation constraints?
    6. What impact on your operating line would a 5, 10, or 15% increase or decrease in the selling price of products have?
    7. Has there been any volatility (aside from seasonality) in the business revenue and what is the explanation for them?


    1. What are your top 5 expenses?
    2. Have you tried negotiating greater discounts or volume pricing for your top 5 expenses?
    3. Would any of your significant vendors be open to discounts if you were able to pre-payment expenses?
    4. What expenses would be able to be cut with minor negative business impact? Why have these expenses not been reduced already?
    5. What expenses cannot reduced without having a significant impact on your business performance?
    6. What expenses have risen or fallen in the past 12 months? Do you expect this trend to continue?
    7. What expenses could a new owner avoid by utilizing the existing operations of another e-commerce company they already operate?
    8. Who is your payment processor(s) and what are the payment processing fees? If they differ by channel, please provide a breakdown. E.g. online store vs Point of sale.
    9. Have you been successful in trying to negotiate lower payment processing fees?
    10. What is the payout time of your payment processors?

    Looking for more questions? We'll be covering business expenses, marketing, product details, fulfilment & operations, production and suppliers, technology and future expansion opportunities in Part 2. Subscribe to the blog's email newsletter to be the first to receive notification of the post.

    We'd love to hear any questions you have found valuable, please share in the comments section, and we may add them and your store to the post.