E536: The 10 Types of Add Backs You Need To Know When Selling Your Ecommerce Business

February 5, 2024Last Updated: February 5, 2024

0 1 minute read

When selling an ecommerce business, its important for owners to be compensated for the stressful one-time events that was experienced in the last 12 months when going to sell.

These are called “Add Backs”, but what are they exactly?

I've invited Chris Duty, an advisor from Quiet Light Brokerage, to talk about the various types of Add Backs that you need to know about, why they matter, and how it can significantly impact the valuation of a business to potential buyers.

Here's some timestamps for your convenience:

0:00 – Introduction
0:31 – Ad Spot
2:46 – Background of Today's Subject
4:50 – What is an Add Back?
7:16 – Accrual Accounting
11:04 – Owner Salaries
13:20 – Value of Working Less
16:13 – Payroll Taxes / Income Taxes
17:53 – Trademarks, Copyrights, Patents and Other Legal Fees
19:44 – Change in Service Provider Costs
20:26 – Employee Removal Costs
22:21 – How Mike Views Add Backs
27:33 – Cash Back / Points Credit Cards
30:26 – What if you use a regular credit card?
31:51 – Masterminds & Ecommerce Courses
32:27 – Lowered COGS
37:46 – Negative Add Backs
39:51 – Price Changes
43:33 – Conclusion

We hope today’s episode was useful to you. If you want to get in touch with Chris you can find him at Linkedin or you can check out the company at QuietLight.com. If you want to check out Chris' previous episode, click here.

If you have any questions or any topics you’d like us to discuss on the podcast, you can now email us directly at support@ecomcrew.com! Also, we would really appreciate it if you would leave us a review on iTunes.

Thanks for listening!