New Study Reveals Valuation Multiplier Formula for Online Sellers
Quartile, the ecommerce cross-channel advertising platform, recently conducted research to understand the key variables of business valuation on an exit strategy for online brands and sellers. The study is the first to uncover what makes a business more attractive to these buyers and what the top aggregators are paying attention to. The research discovered an […]
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Quartile, the ecommerce cross-channel advertising platform, recently conducted research to understand the key variables of business valuation on an exit strategy for online brands and sellers. The study is the first to uncover what makes a business more attractive to these buyers and what the top aggregators are paying attention to.
The research discovered an astonishing result: brand valuation can be 130 per cent increased when sellers are diversifying their sales channels. Based on the research, 93 per cent of Amazon Sellers also selling on their website – as opposed to marketplaces only – received a significant valuation multiplier boost.
But is there a formula to achieve this success – and how can someone replicate it in their company? Quartile’s research shows that selling on a marketplace is insufficient to increase brand valuation. Over 20 per cent of total online sales must come from a direct-to-consumer website, which must count for over $1 million in sales.
The reason behind this is simpler than expected but also game-changing. A brand with its own website has a valuable asset in its hands: customer data. That means a deeper understanding and knowledge of client behaviour and preferences; better audience segmentation for new campaigns; and more effective, low-cost strategies like email marketing. It also shows that they are not just selling products, they are, in fact, building a brand.
By getting to know customers and building a closer relationships, a company will be more successful when launching new collections and products. A brand will also gather more constructive feedback and suggestions for improvement. This can also help when targeting new customers by building lookalike audiences.
“It’s a flywheel effect: the more data you gather from customers, the better your marketing accuracy, the greater your reach, the more customers you get and the more data you gather from customers again,” said Quartile CEO Daniel Knijnik.
The study highlights the importance of long- and short-term strategies for profitability and brand building. As the economy and market conditions present challenges for e-commerce, channel diversification becomes a must-have strategy.
