Should I Use EBITDA or SDE for My Ecommerce Store?

Written by Christopher Krassnig - Founder - Kairos Exchange and ZenoX Media. Last reviewed 4 September 2026.

Use SDE while one owner runs the store, and EBITDA once a paid team runs it. Salary is where the two split. SDE adds the owner's pay back, plus personal spending and genuine one-offs. EBITDA keeps a manager's pay in. Run the same store through the 2.2x to 3.2x band Kairos applies to verified SDE, once on each base, and the two answers differ by the owner's salary.

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What Does Each Measure Count?

Both measures read the same accounts and split on a single question, whether running the store is a cost or the owner's take. SDE, seller's discretionary earnings, starts at operating profit before interest, tax, and depreciation. It then adds your salary back, together with personal spending and genuine one-offs that ran through the business. The result is what the store and the job pay together, which is what an owner-operator is actually acquiring. Kairos prices verified stores at 2.2x to 3.2x annual SDE, on ranges published by Empire Flippers and FE International. That base is the one this end of the market quotes. EBITDA, earnings before interest, taxes, depreciation, and amortization, leaves management pay in the numbers. It answers what the store earns once a market wage goes to whoever runs it. That is the question an acquirer asks when a team stays and the founder steps out.

What Actually Drives the Switch from SDE to EBITDA?

The convention you will hear is that smaller deals price on SDE and larger ones on EBITDA. It holds up often enough to be useful. The two published ranges cited on this page, from Empire Flippers and FE International, set no cutoff where the second measure becomes mandatory. Treat the convention as a starting point and nothing more. Management is what drives the switch. Revenue only correlates with it. A buyer who plans to replace the owner prices on SDE and wants every add-back defended. The buyer of an operation that already runs on a team asks what the business earns without the founder. That question is EBITDA with a wage in it. Kairos draws its own working line at EUR 500,000. That line sets how deep the paid review goes, not which measure a sale should use. Below the figure, paid due diligence runs as an accountant-led review. At or above it, the deal gets an M&A analysis, the deeper work a larger sale calls for.

How Does One Store Land on Two Prices?

Take an illustrative store, with the assumptions stated so the sums stay clean. Operating profit before interest, tax, and depreciation is EUR 120,000. There is no debt and nothing left to amortize. The owner pays themselves EUR 50,000. SDE adds the salary back, so the SDE base is EUR 170,000. EBITDA leaves the pay in, because whoever runs the store draws a wage the business must cover. The owner's EUR 50,000 stands in for a manager's, so the EBITDA base is EUR 120,000. The same band is used on both bases only to show what changing the base does. No EBITDA-specific multiple is sourced on this page. Applied to the SDE base, that band gives EUR 374,000 to EUR 544,000. Applied to the EBITDA base, the same SDE band gives EUR 264,000 to EUR 384,000, which is arithmetic and not a price Kairos quotes on EBITDA. Buyers who actually price on EBITDA work from bands tied to larger-company markets. The spread is EUR 110,000 at the low end and EUR 160,000 at the top. All of it traces to the salary line that sits inside one base and outside the other.

Which Number Should You Quote as a Seller?

Name the base every time you state a multiple, because a multiple means nothing until you say what it multiplies. The two bases differ by the cost of replacing you. A figure quoted on SDE never compares straight across with one quoted on EBITDA. When the buyer is an individual who plans to run the store, lead with SDE and the published yardstick Kairos applies to verified stores. A verified listing carries its add-back schedule already reconciled against connected store data, so the SDE base a buyer argues with is the one verification produced. Disclose every add-back line by line so nothing reads as a trick. When the counterparty is a larger acquirer with a team, expect the conversation on EBITDA. Have your manager-replacement cost ready as a stated figure before they ask for it. In the example above, the stand-in wage was the owner's own EUR 50,000 pay. Yours should be what a competent hire would really cost you, because that is the first line an EBITDA buyer rebuilds. Both bases can be honest, because they price different things. If two offers disagree, ask which base each was built on before you compare them.

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