Client Overview
Our client was a successful multi-channel e-commerce seller operating on Amazon (US & CA), Shopify, and Walmart. After years of consistent growth, he decided to sell the business to a well-known e-commerce aggregator.
However, what was expected to be a smooth transaction quickly hit roadblocks during due diligence.
The Challenge
When the business aggregator began reviewing the financials, they couldn’t get a reliable picture of how each marketplace was performing. This uncertainty created hesitation and prolonged the process. The key issues we discovered were:
- No Marketplace Segmentation
All sales from Amazon US, Amazon CA, Shopify, and Walmart were combined into a single “Sales” ledger, making performance comparisons impossible.
- Bundled Expense Categories
On Amazon, multiple fee types — referral fees, fulfillment fees, storage fees, and other charges — were lumped into one single ledger, “Amazon Fees.” This masked the true cost structure for each channel.
- Erratic COGS Reporting
Cost of Goods Sold fluctuated wildly — in some months representing 80% of sales, in others just 10%. These inconsistencies made profitability analysis unreliable.
Impact:
Because of these reporting gaps, the aggregator struggled to assess profitability, growth potential, and marketplace-specific performance. As a result, the sale process slowed down significantly, and the seller risked losing the buyer’s interest or accepting a lower valuation.
Our Solution
When the client reached out to Prosperlytics Consultants, our team knew the key was to rebuild financial clarity from the ground up — and do it fast.
Here’s how we approached it:
- Detailed Financial Diagnostic
Within days, we reviewed two years of historical data and pinpointed the specific weaknesses in the existing financial reports.
- Marketplace & Country-Level Segregation
We restructured sales reporting to show separate ledgers for each marketplace and country (e.g., Amazon US, Amazon CA, Shopify US, Walmart US). This gave the buyer instant visibility into which channels were high-performing.
- Expense Categorization Overhaul
Amazon expenses were broken down into detailed categories — referral fees, fulfillment fees, storage costs, advertising expenses, etc. — enabling a true understanding of gross margins.
- Accurate COGS Linking
We tied monthly COGS directly to the net units sold in that same period, removing inconsistencies and giving an accurate reflection of product profitability.
- Due Diligence-Ready Reports
We prepared clean, reconciled, and fully categorized financial statements covering the last two years, along with supporting schedules that answered the buyer’s potential questions before they were even asked.
The Results
- Due Diligence Queries Resolved in Record Time
The majority of buyer queries were answered within 24 hours, keeping momentum high.
- Business Sale Closed in Under a Month
From the time we delivered the revised statements, the due diligence process to the final deal closure took less than 30 days.
- Valuation Boost Achieved
With clear insights into profitability by marketplace, the buyer had the confidence to offer a higher valuation. The seller also decided to phase out underperforming channels before closing, further strengthening the deal terms.
Conclusion
This project demonstrated how accurate, transparent, and structured financial reporting can make or break a business sale. By transforming unclear, bundled numbers into actionable, marketplace-specific insights — and doing it in record time — Prosperlytics Consultants enabled our client to secure a fast, profitable, and smooth exit.