Ecommerce Business Due Diligence Checklist

Where to start

Reconcile orders, refunds, payouts and the P&L for matching dates. Rebuild the margin after fulfilment, advertising and owner work; inspect inventory, supplier concentration and the ownership of the store, domain and acquisition assets. Then test downside profit before negotiating the price.

1. Separate sales, gross margin and net profit

Gross sales, net sales, processor payouts and bank receipts measure different things. Match currency and periods, then explain refunds, discounts, fees, taxes, payout timing and reserves. Shopify profit reports depend on recorded product costs; a gross-margin figure alone does not prove complete operating profit.

Ask for: Order and refund exports, payment settlement reports, monthly P&L, product cost records and supplier invoices for matching dates.

Decision gate: Explain each difference rather than averaging conflicting figures. Do not treat an unmatched payout total as proof that revenue was overstated.

2. Find costs that would follow the buyer

Check landed product costs, shipping, fulfilment, processing, chargebacks, customer support, subscriptions and owner replacement work. Free supplier freight, temporary discounts or unpaid founder effort may not continue. Keep inventory purchases and cost of goods sold distinct so cash movement is not confused with expense recognition.

Ask for: The expense ledger and bills, a description of cost treatment, supplier freight terms and a record of weekly operating tasks.

Decision gate: Reconstruct a buyer profit scenario only from explicitly entered assumptions. A missing line is unknown, not zero; check whether it is included elsewhere first.

3. Test ad returns and ownership separately

Platform ROAS divides that platform’s attributed purchase revenue by its spend. Blended marketing efficiency divides total revenue by ad spend. They are not interchangeable, and platforms can both claim the same order. Profitable historical campaigns may also depend on an agency-owned account, pixel, audience or creative library.

Ask for: Per-platform spend, attributed revenue, purchases, attribution window and matching date ranges; account, tracking, audience and creative ownership; agency agreements and restriction history.

Decision gate: Reconcile attribution and obtain a workable access/transfer path. Do not assume an ad account’s past performance can be recreated immediately in a new account.

4. Work out what inventory you actually receive

Confirm whether the price includes inventory and how the saleable stock is valued. Inspect quantities, ageing, defects, slow sellers, ownership and commitments already placed with suppliers. A profitable store can still require significant cash for the next purchase order before sale proceeds arrive.

Ask for: A dated stock report, landed costs, independent quantity checks where appropriate, purchase orders, lead times and a working-capital forecast.

Decision gate: Separate purchase price, included stock and additional working capital. Resolve whether inventory is counted twice or whether unavailable stock supports the sales forecast.

5. Map suppliers, products and channels

One supplier, hero product or channel can carry most of a store’s economics. Identify concentration by the correct basis: units, purchasing, revenue, orders or traffic. Review supplier terms and whether the relationship follows the company, brand or current owner personally.

Ask for: Revenue by product/channel, supplier purchasing shares, supply terms, alternative lead times, quality history and any exclusivity or minimum-order commitments.

Decision gate: Test a disruption scenario and its cash consequences. A potential replacement supplier is not an established replacement until cost, quality and availability are checked.

6. Make ownership and closing conditions explicit

Shopify has a store ownership transfer process, but the domain, payment setup and third-party arrangements require separate attention. Check brand and creative rights, customer-data handling, agency assets, apps and outstanding obligations. Document what transfers, what needs approval and what must be rebuilt.

Ask for: A dated asset schedule, named account owners, written inclusion and transfer steps, required provider approvals and a buyer handover test.

Decision gate: Use qualified legal and financial help for the acquisition documents and material obligations. Make unresolved essential ownership or continuity issues conditions of proceeding.

Use the numbers

Worked example: ad efficiency is not a profit margin

Illustrative monthly figures: $20,000 net revenue, $5,000 ad spend, $7,000 goods, $2,000 fulfilment and $1,000 other operating costs.

Blended revenue/ad-spend ratio: 20,000 ÷ 5,000 = 4.0×. Profit before any omitted costs: 20,000 − 5,000 − 7,000 − 2,000 − 1,000 = 5,000, a 25% margin. That 4.0× is not platform ROAS and does not establish customer acquisition cost.

Bring the checks into your actual deal

The free preview screens supplied economics and major risk flags. A complete report adds prioritized seller questions and your private evidence workspace. Record replies, reconcile source data and update the report when facts change. Deal Preflight does not independently authenticate seller records.

Common buyer questions

Does Shopify gross profit prove the seller’s net profit?

No. Understand which product costs were recorded and reconcile the rest of the operating expenses. A gross-profit report and a complete P&L answer different questions.

Are inventory and report prices the same currency?

Business figures should be analyzed in the listing’s currency. Deal Preflight charges report credits in SGD. Keep currency labels visible when comparing the acquisition price, inventory and report purchase.

Can Deal Preflight import my seller’s spreadsheet?

The analyzer supports Excel, CSV and TSV financial histories with worksheet and column review. The workspace can reconcile selected evidence columns to the saved claim. Uploaded values remain subject to your source inspection and period checks.

Sources and further reading

Provider sources reviewed 13 September 2026. Workflows and account rules can change; check the linked source for the seller’s circumstances. This buyer-side due-diligence checklist is not professional financial, legal, tax, technical, or investment advice.