Sector guide · E-commerce & retail
The deal killers when you sell an online business
These five issues stall or sink more e-commerce sales than everything else combined. All of them are fixable, but only with time, which is exactly.
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These five issues stall or sink more e-commerce sales than everything else combined. All of them are fixable, but only with time, which is exactly why the preparation window exists.
01You are the brandThe big oneOwner dependence
If the store's identity is built on your face, your voice and your personal socials, the buyer is left wondering what they actually own the day you leave. Start migrating the audience to the brand's own channels, put other faces into the content, and build the brand a personality that is not yours. This takes 12 months minimum to do convincingly, so start early.
02Revenue that cannot be verified at sourceVerification
Numbers that do not reconcile to platform reports, undocumented side income or creative accounting collapse buyer trust instantly, and trust does not rebuild inside a due diligence period. In this sector every claim is checkable, so only make checkable claims.
03One supplier holding the keysConcentration
A single factory, no written agreement, and a relationship that lives in your WeChat history is a handover risk buyers price hard. Formalise supply terms, document specifications and tooling ownership, and qualify a second source for hero products even if you never use it. The option alone changes the risk conversation.
04Stale or bloated stockWorking capital
Because stock is typically paid for at settlement on top of the business price, a warehouse of slow movers becomes a negotiation problem: the buyer refuses to fund it and the write down lands on you at the worst possible moment. Run down aged lines over the year before sale and go to market holding clean, current inventory.
05Selling into a declineTrend
Buyers buy the future, and the trend line is the first thing they open. A business sliding backwards attracts opportunists, not premiums. If revenue is falling, I will tell you to spend six months stabilising and sell the recovery story rather than list into the decline hoping nobody notices. They will notice.
The GST free going concern conditions, and what each one requires at settlement
| Condition | What it requires from you, and where it fails in an online sale |
|---|---|
| The sale is for payment | There must be consideration for the supply. A transfer for no payment, or a restructure dressed as a sale, does not meet the condition. Where part of the price is deferred or contingent, have your accountant confirm the treatment before you sign rather than after the first instalment. |
| The purchaser is registered or required to be registered for GST | Verify it, do not assume it. GST registration is required when the business has a GST turnover of $75,000 or more, and registration must occur within 21 days of that requirement arising. A buyer using a newly incorporated acquisition vehicle may not be registered on the day you exchange. Make registration a condition and get the ABN and GST registration confirmed in writing before settlement. |
| The purchaser and seller have agreed in writing that the sale is of a going concern | The agreement must be in writing and it must be in place at the time of supply. This is a clause in the contract of sale, not a conversation or an invoice notation after the fact. The ATO expects evidence of the written going concern agreement as part of its supporting information for a going concern sale. |
| The sale includes everything necessary for the continued operation of the business | This is where online businesses fail. A marketplace seller account that cannot be assigned without platform consent, a payment gateway the buyer has to reopen under new onboarding, and a customer database that cannot lawfully be handed over are all gaps in what is being supplied. Identify each one and address it in the contract before you rely on GST free treatment. |
| The business is carried on by you until the day of sale | Keep trading. Keep the storefront live, keep fulfilling orders, keep paying suppliers, keep the marketing running. Winding down through a long settlement period puts the condition at risk. The ATO expects evidence of whether the seller operated the business until the sale date. |
Conditions are from the ATO page on selling a going concern, current as at August 2026. The governing ruling is GSTR 2002/5. I have not been able to verify the section number of the GST Act commonly cited for these conditions from an ATO page, so the ruling is cited here instead of a section number. Confirm the statutory reference with your accountant.
What the ATO expects to see, and why it doubles as your preparation checklist
The ATO publishes the supporting information it expects for a going concern sale, and it is the closest thing to a published verification standard for a business sale. Assembling it early gives you a data room that answers a buyer’s questions and a tax file that answers the ATO’s.
The list covers details of the business, the structure, and whether it is part of a larger enterprise. Details of the arrangement under which the business is being sold, including each element, the parties, their relationship and the transfer method. Copies of relevant documents such as heads of agreement and contracts. Details of the seller or sellers and each supplying entity. Details of the purchaser or purchasers, including whether they are registered or required to be registered for GST.
It then asks for documentation of the assets transferring, and the list is instructive for an online business. Premises, plant and equipment, licences, goodwill, restrictive covenants, intellectual property and franchises. Employee skills, technical know-how, trading stock, work in progress and customer lists. Advertising materials, fixed assets, suppliers and contract rights. It also asks for what is excluded and why, whether the seller operated the business until the sale date, the purchase price and how it was calculated, and evidence of the written going concern agreement.
Note that customer lists appear on the ATO’s list of assets to be documented, while the OAIC restricts what customer information you may hand a prospective purchaser. Those two positions are not in conflict, but they do have to be reconciled in the drafting. Describe the customer list as a transferring asset in the contract and the going concern documentation, and control the timing and form of the actual data transfer separately, so that identified personal information moves at completion under a lawful basis rather than during diligence.
Record keeping makes all of this possible. A business must keep records of sales, including the sale of your business and assets, along with payments to employees and payments to other businesses. Those records must be kept for five years from when they were prepared or obtained, or when the transactions were completed, whichever is later. Those records can still be requested if the business is subject to a review or audit after you have exited.
GST on imported stock, and the reconciliation that has to work before a buyer relies on your numbers
Where you import stock, a buyer needs to establish how GST was accounted for, because two different mechanisms produce two different margin and input tax credit profiles. Low value imported goods are goods with a customs value of A$1,000 or less, where the customs value is the price the goods are sold for, minus freight and insurance from the place of export. Since 1 July 2018, merchants, electronic distribution platform operators and redeliverers selling or redelivering low value goods into Australia must charge GST. For consignments over A$1,000, GST, customs duty and clearance charges are charged to the importer at the border.
The problem in a sale is mixing. A business that has been treated as an electronic distribution platform by a marketplace for some sales, and has accounted as a merchant for others, and has imported some consignments above the threshold as an importer, will not reconcile cleanly on a first pass. That is not evidence of anything wrong. It is evidence that the explanation has to be written down before diligence, not improvised during it.
Build the chain once and keep it current. For each period, tie storefront or platform reported gross sales to payment gateway settlement reports net of fees, chargebacks and refunds, then to bank deposits, then to the G1 and 1A figures on lodged activity statements, then to the income tax return. Attach a note for each known divergence. Marketplace fees netted before settlement. Gateway settlement timing across period ends. Refunds and chargebacks recognised in a different period from the original sale. GST collected by a marketplace as an electronic distribution platform rather than by you. Gift card or store credit balances that are cash received but revenue not yet earned. A buyer who can follow that chain in an afternoon will negotiate on price. A buyer who cannot will negotiate on risk.
The 12 to 24 month preparation window
The owners who get the best outcomes almost never decide to sell on a Monday and list on a Friday. They start one to two years out and work a sequence. Here is the one I take clients through.
Know where you stand
Start hereGet a confidential market appraisal so you know what the business is likely worth today and, more importantly, which specific levers would lift that figure for your business. This costs you nothing and commits you to nothing.
Clean the engine room
12 to 24 months outSeparate the financials completely, build the normalised earnings schedule, document every recurring process, formalise supplier terms, register outstanding IP, move critical accounts into the trading entity and start working down aged stock. Unglamorous work that converts directly into sale price and shortens due diligence.
Build the premium
6 to 18 months outLift repeat purchase rates, grow the email and SMS programme toward that 20 to 30 per cent revenue share, diversify traffic away from any single channel, and step yourself out of daily operations. This is the phase where a business moves from saleable to genuinely contested by multiple buyers.
Go to market from strength
Going to marketWith clean numbers, transferable systems and a rising trend line, the business is presented confidentially to qualified buyers, approached directly rather than listed, and several of them at once. Two acquirers who both want the brand and the database will pay more than one acquirer with nobody bidding against them.
Don't wait until you think you're ready
None of that sequence is a prerequisite for going to market. Plenty of owners are closer to sale ready than they realise, and some businesses can go to market today. A store with a strong brand, a loyal database, registered IP, exclusive supply rights or a dominant position in its niche can attract strategic buyers right now, because those buyers are purchasing what they cannot easily build, not just your earnings.
Others can fast track: if your financials are already clean and your operation already runs without you, the two year plan collapses into months.
Ask what it is worth
Free, in writing, and nobody finds out you asked. Tell me the trade and the suburb and I will do the rest.
Nobody finds out you are selling. This goes to me only, into my own database in Sydney. I will not contact your accountant, your landlord, your bank or your staff, ever, unless you ask me to.
If you would rather not put anything in writing yet, ring 0431 124 128. Prefer to pick a time yourself? Book a time in my diary.
Find out what your online business is worth
Thirty minutes, on the phone or in person, at a time that suits you including evenings. You will get a straight read on where the business sits today and what would move the number. It costs nothing, there is no obligation, and nobody finds out you asked.