What's Working Across the E-commerce Agencies I Review

I see more e-commerce agency P&Ls than almost anyone I know. I operate three of my own, managing over $100M a year in brand revenue, and I've reviewed 50+ businesses as an active buyer. Deals cross my desk every month. Most die fast. A few get serious.

That vantage point shows you things no single agency owner can see from inside their own shop. Patterns repeat. The agencies creating real value do the same five things, and the ones I pass on fail the same five ways. Some specifics below are anonymized because deals are active, but every number is real.

1. The winners sell outcomes across channels, not hours on one platform

The Amazon-only agencies coming across my desk are flat or declining. The agencies growing are the ones moving their clients into multi-channel builds and charging on results.

This mirrors exactly what I see on the brand side. Single-channel brands trade at 2-3x SDE while multi-channel brands command 3-4.5x, and the same logic compresses an agency's value: a single-service, single-platform agency is a position on that platform's health, not a business. When Amazon squeezes fees or an algorithm shifts, the agency's whole book feels it at once.

The proof this works is in the client outcomes. Our top TikTok Shop client went from zero to $6M ARR in under 12 months. That kind of result is only possible when the agency treats the channel mix as the product, not the hours.

2. Recurring revenue quality beats revenue size

I've looked at agencies with impressive top lines that were worth almost nothing, because the revenue was projects: lumpy, resold every quarter, gone the moment a founder stops hustling.

What I actually price is revenue quality. Retainers with strong retention. Performance components that align the agency with the client's growth. And diversification: the healthy profile I look for is a real client base where no three clients exceed 20% of revenue. When two logos carry the agency, one bad quarter erases the year, and every buyer knows it.

I recently reviewed a business doing roughly $2M in revenue split across a software line and a managed-services line. Same company, very different revenue quality per line, and the valuation conversation treated them as two different assets. That's how buyers think. Your blended top line hides what your revenue is actually worth.

3. The owner is the product (the most expensive pattern)

This kills more agency value than everything else combined. The founder is a brilliant technician: best strategist in the building, owns every key client relationship, touches every deliverable. Revenue is literally their hours.

I check owner involvement on every deal, and anything above 20 hours a week in delivery needs a plan before I'll go further. It's the same test I apply to the brands we manage: if the business can't run without you, you don't own a business. You own your job.

The agencies at the top of the range have the opposite shape: documented SOPs, a real operating team, client relationships spread across account leads. The founder sells and steers. Those agencies transfer. The technician-run ones don't, and no buyer pays a premium for a business that walks out the door with the seller.

4. Systems show up in the books before they show up anywhere else

I can usually tell how an agency actually runs within an hour of opening its financials. Clean books that reconcile, per-client margin visibility, delivery costs that map to services. That's what operational maturity looks like from the outside.

Messy books kill deals fast, and not because buyers are pedantic. If you can't see per-client margin, neither can the owner, which means pricing is guesswork and the profitable clients are subsidizing the unprofitable ones. On the brand side I watched founder-led operations break down around $30K a month in revenue; the agency equivalent is the founder who runs the whole shop from memory. It works until it doesn't, and diligence is exactly where it stops working.

5. Margin structure tells the truth about the model

Healthy agencies in my world run 20-30% EBITDA margins. That's the range where the pricing is honest, the delivery is efficient, and there's room to invest.

Sub-10% margins almost always mean the growth was bought: underpriced retainers to win logos, scope creep nobody billed for, headcount added ahead of process. The revenue is real but the model isn't. And my buy box reflects that: what I look for is $750K-$1.5M in EBITDA at a 20-30% margin with a real team of 5-15+, which I've published openly on my partner page.

One more nuance from a current review: zero EBITDA isn't automatically a pass. The business I mentioned earlier runs at breakeven deliberately, reinvesting everything into product. The question I ask is what earnings would be if that reinvestment were paused. Normalized earnings, revenue quality, and key-person risk tell you whether zero profit is a strategy or a symptom. (I broke down the earnings-metric side of this in SDE vs EBITDA.)

What this means if you own a brand

You're probably not buying an agency. But you hire them, and you should evaluate an agency exactly the way an acquirer does, because the same five patterns predict whether it will still be performing for you in year two:

• Ask who actually delivers the work. If every answer routes through the founder, you're buying their calendar.
• Ask how many clients they serve and whether any client dominates their book. You want to matter, but you don't want to be the business.
• Ask for retention numbers, not logos.
• Ask for results on more than one channel. The agency guiding you into a multi-channel build is protecting your valuation, not just their retainer.

An agency that would pass my diligence is an agency worth hiring. (The full framework I run on acquisitions is in what I look for when acquiring an e-commerce business.)

What this means if you own an agency

Your multiple is already being set by these five factors, whether or not you ever plan to sell. Owner dependency is the biggest discount on the table, and it's also the one you can fix deliberately: document the delivery, build the team, spread the relationships, price for 20-30% margins.

I built my agencies the same way, and I made plenty of these mistakes first. If you're a strong operator thinking about what your agency could be worth inside a larger group, that's a conversation I have every month: here's how I think about partnering.

Either way, the pattern is the one I keep repeating: build the business so it runs without you and gets more valuable every year. The market pays for exactly that, on both sides of the deal table.