Online businesses often appear side by side on the same marketplaces with the same headline figures: asking price, revenue, profit and a multiple. Underneath, a software subscription business, an online shop and a content site are very different things to own. They make money in different ways, they break in different ways, and buyers pay different multiples for them. This guide compares the three so you can judge which listings deserve a closer look, what to verify before you commit and why the prices differ.
The asking price is the price a seller or broker puts on a business when it is listed. It is an opening position, not a valuation, and what it includes varies from listing to listing.
Three models, three kinds of earnings
SaaS
A software as a service business sells access to software, usually by monthly or annual subscription. Revenue repeats without a new sale each month, serving one more customer costs little, and the main costs are people, hosting and winning new customers. What you buy is a customer base that keeps paying, the product and the code behind it.
Ecommerce
An ecommerce business sells physical products online, through its own store, marketplaces or both. Revenue depends on continuing to win orders. Margins are squeezed by product costs, platform fees, shipping, returns and advertising, and the business needs stock and working capital. What you buy is a brand, a product range, supplier relationships, sales channels and usually inventory.
Content
A content business publishes articles, videos, newsletters or free tools and earns from display advertising, affiliate commissions, sponsorship or its own digital products. Running costs can be low, but revenue depends on reaching an audience, and much of that reach usually comes from search engines and social platforms the business does not control. What you buy is the content library, the domain and its reputation, the audience and the monetisation arrangements.
At a glance
| What to compare | SaaS | Ecommerce | Content |
|---|---|---|---|
| Earnings come from | subscriptions that renew | each new order | audience reach turned into advertising and commissions |
| Figures to verify first | MRR, churn and net revenue retention | contribution margin by channel, and stock | traffic by source and revenue by stream |
| Main outside risk | platform, pricing or policy changes by others | marketplace rules and advertising costs | search engine and AI answer changes |
| Cash tied up | little, though annual prepayments leave service still owed | stock and working capital | little |
| Basis in Loupe's valuation tool | ARR, cross-checked on SDE | SDE, or adjusted EBITDA when larger, with stock shown separately | SDE, or adjusted EBITDA when larger |
Working capital is the money tied up in running a business day to day, mainly stock and money owed by customers, less money owed to suppliers. A sale needs to agree how much of it comes with the business.
Monthly recurring revenue (MRR)
Monthly recurring revenue is the subscription revenue a business expects to bill in a normal month. Its monthly movements show where growth comes from and where it leaks away.
Churn is the rate at which a business loses customers or recurring revenue over a period. Customer churn and revenue churn can tell very different stories.
The metrics that matter
SaaS metrics
- Monthly recurring revenue (MRR) and annual recurring revenue (ARR), reconciled to payment processor records rather than dashboard screenshots.
- Monthly revenue churn, with customer churn alongside it, since small customers leaving matters less than large ones.
- Net revenue retention: what a group of existing customers pays a year later, after upgrades, downgrades and cancellations.
- ARR growth over the last 12 months, and where it came from.
- Customer acquisition cost and lifetime value by channel, where the business pays to win customers.
- Cohorts showing how each month's new customers behave over time.
- Annual prepayments. Cash collected for months not yet delivered is deferred revenue, and you will owe that service after completion.
Ecommerce metrics
- Revenue by channel: own store, each marketplace and any wholesale.
- Gross margin after product costs, and contribution margin after fees, shipping, returns and advertising.
- Advertising spend as a share of revenue over time, and what each channel returns.
- Repeat customer revenue share: how much comes from people who have bought before.
- Stock levels, stock turn, ageing stock and inventory at cost.
- Supplier concentration, lead times and payment terms.
- Refund, return and chargeback rates, and marketplace account health scores.
Content metrics
- Traffic by source: organic search, direct, social, email and referrals.
- The 12-month traffic trend, and whether any sharp drops line up with search engine updates.
- Revenue by stream: display advertising, each affiliate programme, sponsorship and products.
- Revenue per thousand visits by stream, and how it has moved.
- Page concentration: the share of traffic and revenue from the top ten pages.
- Email list size, engagement and how subscribers were collected.
- The cost and source of new content, including freelancers and any automated writing.
Customer acquisition cost is the average sales and marketing spend needed to win one new customer over a period. It shows whether growth can be repeated and at what price.
Customer lifetime value estimates the total gross profit a business earns from an average customer over the whole relationship. It is a model built on assumptions, not a record.
Deferred revenue is money customers have already paid for goods or services the business has not yet delivered. It is a liability until the work is done.
Why their multiples differ
Buyers pay more for earnings they believe will last, and less for earnings that could vanish after one change outside the owner's control. Each model sits in a different place on that scale.
SaaS with low churn has revenue that renews without a new sale. That predictability is why established SaaS businesses are often priced on a multiple of ARR rather than profit, and why churn, growth and net revenue retention move the price so much.
Ecommerce earnings depend on continued sales, advertising costs and platform rules, and part of what you pay may be tied up in stock. Businesses with their own customer base and more than one channel usually command more than those relying on a single marketplace.
Content earnings can be efficient and light to run, but they rest on traffic the business does not own. A search algorithm update, a shift towards AI-generated answers in search results or a cut in affiliate commissions can reduce income quickly. Buyers price that in.
Two practical notes. First, some online marketplaces quote multiples of monthly profit rather than annual profit. A multiple of 30 times monthly profit is 2.5 times annual profit, so check which convention a listing uses before comparing it with anything else. In the same way, a multiple of ARR and a multiple of profit are different measures, so a SaaS listing at four times ARR cannot be compared directly with a shop at four times profit. Second, profit figures for online businesses often ignore the owner's time. A site described as passive may still need someone for 20 hours a week, and that person has a cost. The owner dependence guide covers how to test claims like this.
How Loupe's valuation handles the three models
Loupe's valuation tool keeps separate benchmark rows for each group. SaaS with ARR is valued on an ARR multiple and cross-checked against an SDE multiple. Ecommerce is valued on SDE, with inventory at cost shown as an addition rather than blended into the multiple. Content and apps are also valued on SDE, with lower likely multiples than ecommerce of the same size to reflect search traffic risk. Outside SaaS, a business moves to an adjusted EBITDA basis, as any other business would, once adjusted EBITDA reaches USD 500,000 or SDE passes the tool's ceiling (USD 750,000 by default).
Model-specific adjustments then move the multiples:
| Model | Condition | Adjustment |
|---|---|---|
| SaaS | monthly revenue churn under 2% | plus 10% |
| SaaS | monthly revenue churn over 5% | minus 20% |
| SaaS | annual growth of 15% to 40% | plus 5% |
| SaaS | annual growth over 40% | plus 15% |
| SaaS | negative annual growth | minus 15% |
| SaaS | net revenue retention over 110% | plus 5% |
| Content | more than 70% of traffic from search | minus 10% |
| Content | traffic down more than 20% over 12 months | minus 15% |
For SaaS, growth replaces the general revenue trend rule. For ecommerce, the tool asks for the share of revenue from the largest sales channel, and where that overlaps with the general rule on dependence on one platform, channel or supplier, only the larger adjustment counts. All adjustments are added together with the general ones and capped between minus 45% and plus 30%. Results are indicative, not a formal valuation, and the methodology page shows the full calculation.
Risks specific to each model
SaaS risks
- Churn hidden by growth. Strong new sales can mask a leaky customer base, so study cohorts, not just totals.
- Code and security debt. Software built quickly by one founder may be fragile, insecure or built on outdated components. See code quality and security debt.
- Key developer dependence. If the founder wrote the code and is leaving, decide who will fix it next month.
- Third-party dependence. A product built on another company's platform, interface or app store is exposed to that company's pricing and policy changes.
- Data obligations. Customer data must have been collected and stored lawfully, wherever the customers are. See customer data collected without valid consent.
Ecommerce risks
- Account health. Marketplace warnings, suppressed listings or policy strikes can cut revenue overnight. See marketplace account health warnings.
- Rising advertising costs that erode margin while revenue looks steady.
- Supplier concentration, especially a single overseas manufacturer with no written agreement.
- Stock problems: items that are old, seasonal, damaged or valued above what they would sell for.
- Product compliance, including safety testing, labelling and trademark rights in each market you sell to.
- Reviews gathered in ways that breach platform rules or consumer protection law. See fake or incentivised reviews.
Content risks
- Search updates that demote the site or its whole niche. See recent algorithm or policy hits.
- AI answers in search results that satisfy readers without a click.
- Affiliate programme changes: lower commissions, new terms or closure.
- Manipulated traffic or bought links that could bring penalties.
- Thin or mass-produced content that may not keep its rankings.
- Concentration of revenue in a few pages or one advertising network.
Diligence: what to verify and how
The principle is the same for all three: see the data at its source. Screenshots and seller-prepared spreadsheets are a starting point, not evidence.
- Ask for read-only access or a live screen share of analytics, search console, payment processors, marketplace seller accounts, advertising accounts and the store platform. Watch the seller navigate to the figures you care about.
- Reconcile revenue to cash. Match reported revenue to payouts from payment processors and marketplaces, and those payouts to bank statements.
- Rebuild the key metrics yourself. For SaaS, calculate MRR, churn and retention from a raw subscription export. For ecommerce, rebuild contribution margin by channel from order and advertising data. For content, rebuild revenue by stream from affiliate and advertising network statements.
- Check traffic history independently. Third-party traffic estimates are imprecise, but any sharp fall they show should be explained by the seller's own data.
- Review the product. For SaaS, have a developer review the code repository, dependencies, hosting and security practices. For content, sample pages for quality, originality and link practices. For ecommerce, order the products.
- Confirm ownership and transferability. Establish who owns the domain, trademarks, code, content and every account, and whether each platform's terms allow a transfer. Some platforms restrict account transfers, so check before you agree a structure.
- Look at the history. Domain registration records, archived versions of the site and trademark searches can reveal earlier owners, rebrands or disputes.
The online business diligence checklist sets out these steps for each model.
A holdback is part of the purchase price the buyer keeps back at completion and pays later if no valid claims arise. Unlike escrow, the money stays with the buyer.
Handover is part of the deal
Many small online businesses are sold as asset sales, so each asset has to move on its own: domains, code repositories, hosting, payment accounts, supplier relationships, email lists and platform accounts. Plan the order so that revenue does not stop while accounts change hands, and agree a transition period during which the seller answers questions and introduces you to suppliers, developers and affiliate managers. Deals of this kind often use an escrow service to hold the payment until the assets have transferred. For ecommerce, agree how stock will be counted and valued at completion. The working capital and inventory guide explains what the price should include.
In an asset sale you buy selected assets of a business; in a share sale (a stock sale in the US) you buy the company itself, with its full history. The choice shapes risk, tax and what needs consent.
A transition period is the agreed time after completion when the seller stays involved to hand over knowledge, relationships and processes to the new owner.
Escrow is an arrangement in which an independent third party holds money until agreed conditions are met. In a business sale it keeps part of the price available to cover claims after completion.
Choosing between them
The right model depends as much on you as on the listing.
- SaaS suits buyers who can manage a product and a technical team, or who will hire someone who can. When churn is low its earnings are the most predictable of the three, and it usually costs the most for each unit of profit.
- Ecommerce suits buyers comfortable with suppliers, stock, logistics and paid advertising. It needs working capital, and its day-to-day work is more physical than a listing suggests.
- Content suits buyers with editorial or search skills who can live with platform risk. It can be run lean, but income can move sharply for reasons you do not control.
Where Loupe fits
A Loupe dossier checks what an online listing leaves out: domain history, web traffic and search visibility trends, reviews and reputation, social and app store presence and trademarks, alongside company registry checks. Every finding carries its source, the date it was checked and a confidence level. A dossier does not replace access to the seller's analytics and accounts, but it can tell you whether a listing is worth that next step. See what's in a dossier or read the sample dossier.