Selling a consumer brand usually runs in seven stages. You prepare the books, choose an adviser or sell direct, send a short teaser, collect offers, sign a letter of intent with one buyer, go through due diligence, then close. It often takes six to twelve months from first prep to money in the bank, though no timeline is guaranteed. Most price cuts happen in due diligence.
Meet Marcus. He runs a made-up travel mug brand.
On a Tuesday in March, a larger housewares company calls.
They want to buy. They name a price with six zeros in it.
Marcus signs their letter that week. He tells his wife they did it.
In June the buyer’s accountants finish their check.
The price is now lower. Nothing broke. They just looked closely.
If you are thinking about selling, this is the part to learn before the call comes.
To sell a consumer brand, you prepare the books, find buyers, agree terms in a letter of intent, survive due diligence, and close.
This post walks through each stage, who buys, a typical timeline and the mistakes that cut the price.
The seven stages at a glance
| Stage | What happens | Typical length |
|---|---|---|
| 1. Prep | Clean the books, document add-backs, fix obvious problems | 1 to 6 months |
| 2. Adviser or direct | Choose who runs the sale | 2 to 4 weeks |
| 3. Teaser and outreach | Short anonymous summary goes to possible buyers | 2 to 6 weeks |
| 4. Offers | Buyers ask questions and send early offers | 3 to 8 weeks |
| 5. Letter of intent | You pick one buyer and agree the main terms | 1 to 3 weeks |
| 6. Due diligence | The buyer checks everything | 1 to 3 months |
| 7. Close | Final contracts, money moves, handover starts | 2 to 6 weeks |
These ranges are typical, not guaranteed. Small, clean brands can move faster. Brands with messy books, many products or a slow buyer can take much longer. Add it up and six to twelve months is a common span from first prep to close.
Stage 1: prep
Prep is where you decide the price you will end up with, even though nobody has made an offer yet.
A buyer will check your earnings line by line later. Every gap you fix now is one they cannot use against you. The main jobs are:
- A monthly P&L that ties to cash. P&L means profit and loss statement. Revenue should match bank deposits and marketplace payouts.
- Add-backs with proof. Add-backs are costs a new owner would not pay, such as a one-off lawsuit or your own salary. Each needs a receipt and a reason.
- Product costs for every item. Each unit sold needs a landed cost, the full cost to get it to your warehouse.
- Customer and channel numbers. Repeat buying, sales by channel, margin by product.
Our brand sale readiness checklist lists every item and what a red flag looks like.
The SBA also suggests putting a value on the business before you market it. It lists three common ways: by expected income, by recent sales of similar firms, and by assets minus debts (SBA guide to selling a business).
Also decide what you want. A clean exit? Staying on to run it? Cash now, or more later if it grows? That answer shapes which buyers fit.
Stage 2: adviser or direct
You can hire an adviser, often called a broker or an M&A adviser, or sell directly to a buyer you already know.
| With an adviser | Selling direct | |
|---|---|---|
| Cost | A fee, often a share of the sale price | No adviser fee |
| Buyers reached | Many, often at once | Usually one or a few |
| Price pressure | Competing offers push terms up | Little competition |
| Your time | They run the process and paperwork | You do it all |
| Good fit | First sale, larger brand, many possible buyers | A buyer already called, smaller deal |
Fees and terms vary a lot, so compare a few. Ask each adviser what deals like yours they closed recently. Ask how they would value your brand, and why. Our guide to how consumer brands are valued explains what goes into that answer.
Stage 3: teaser and outreach
A teaser is a one or two page summary that does not name the brand. It shows the category, revenue range, earnings, growth and channel mix. It goes to buyers who might fit.
Buyers who are interested sign an NDA, a non-disclosure agreement that promises to keep your details private. Then they get the full summary, often called a CIM or information memo. It holds your financials, products, customers and plans.
Keep the numbers in the memo the same as the numbers in your books. Any gap between the two will be found later.
Stage 4: offers
Buyers ask questions, look at your data and send early offers. These are often called indications of interest. They give a price range and a rough structure.
Do not judge offers on headline price alone. Look at:
- Cash at close. How much you get on the day.
- Earnout. Part of the price paid later, only if the brand hits set targets.
- Seller note. Part of the price you lend to the buyer, paid back over time.
- Working capital and stock. Whether stock is included or paid for on top.
- Your role after. How long you must stay, and on what terms.
Here is where a bigger number can cost you.
Below is a made-up example of two offers for the same brand. Every number in this post is illustrative, for a made-up brand.
| Illustrative | Offer A | Offer B |
|---|---|---|
| Headline price | $3,000,000 | $2,600,000 |
| Cash at close | $1,800,000 | $2,400,000 |
| Earnout, if targets are hit | $1,200,000 | $200,000 |
| Owner must stay | 24 months | 6 months |
Offer A looks bigger. But much of it depends on targets after you lose control of the brand. Offer B pays more on the day. Which is better depends on how sure you are of the targets and what you want next.
Stage 5: letter of intent
You pick one buyer and sign a letter of intent, or LOI. It sets the price, the structure and the main terms.
Most of an LOI is not binding. But it usually has an exclusivity clause, a promise not to talk to other buyers for a set time. That is the point where your leverage drops. Get the important terms into the LOI now, while you still have other offers. This is the step Marcus rushed.
Stage 6: due diligence
Due diligence is the careful check a buyer makes before buying a business. It usually means going through financial records and other key papers (Cornell LII). For a brand, it covers your books, taxes, contracts, stock, suppliers, customers, listings and legal risks.
Now the hard part. This is where most price cuts happen. The buyer finds a gap and asks for a lower price, a bigger earnout or a special promise in the contract.
A common example. The seller showed revenue from the orders report. The buyer rebuilds it from Amazon settlements, the statements of what Amazon actually paid. Amazon makes these on its own schedule, and sellers cannot request them (Amazon developer docs). After refunds, fees and reimbursements, earnings come out lower. See the settlement report vs the orders report for why they differ.
You will set up a data room, a shared folder that holds every document the buyer asks for. Answer fast and keep the business running well. A weak month during due diligence can reopen the price.
The SBA suggests the sales agreement spell out how the business runs before close. It should also say how much access the buyer gets to your information (SBA guide to selling a business). Settle that early, so the checking does not swallow your week.
Stage 7: close
Lawyers turn the LOI into a purchase agreement. The SBA says this agreement can cover a sale of the assets or of the company’s stock, and a lawyer should review it (SBA guide to selling a business). It lists what you promise is true about the business, and what happens if it is not. Money moves, often with part held back for a period to cover claims.
Taxes depend on that structure. The IRS usually treats a business sale as a sale of each asset on its own. Selling your inventory, the goods on your shelves, for example, counts as ordinary income or loss (IRS, Sale of a business). When goodwill is part of the deal, buyer and seller both file a form showing how the price splits across assets (IRS, Form 8594). Ask your accountant about this before the LOI, not after.
Then the handover. Accounts, listings, supplier contacts, ad accounts and logins move to the new owner. Plan this early. Some marketplace account moves take time and paperwork.
Who buys consumer brands
| Buyer | Who they are | What they want | Often means for you |
|---|---|---|---|
| Strategic | A larger company in your space | Your products, customers or shelf space | Can pay more if you fit, slower to decide |
| Private equity | Firms investing others’ money | Growth they can build on, then sell | Want a team, clean books, often an earnout |
| Aggregators | Companies that buy many small brands | Steady earnings, often Amazon-heavy | Fast process, set formula, tight checks |
| Individuals | Buyers who want to run a brand | A business they can manage alone | Smaller deals, may use loans |
None is always best. A strategic buyer might pay most for a brand that fills a gap in its range. An individual might be the only fit for a small brand the owner runs alone. Individuals often borrow to buy. The SBA’s main loan program, the 7(a) loan, lists changes of ownership as one allowed use (SBA 7(a) loans).
Mistakes that cut the price
Most of these are small on their own. Together they add up fast.
Books that do not tie to cash. If revenue does not match deposits and payouts, the buyer trusts less of your earnings.
Add-backs without proof. Buyers strike any add-back that looks like a normal running cost.
Letting the business slide. Owners get busy with the sale and stop running ads or ordering stock. One bad month can lower the price.
Stock problems. Running out during due diligence hurts sales. Too much old stock is cash the buyer does not want to pay for.
Surprises. A pending dispute, a supplier with no contract, a listing that was suspended last year. Tell the buyer early. Found late, each looks worse.
One person holds it all. If only you know the suppliers and logins, the buyer prices that risk.
Signing the LOI too fast. Once you are exclusive, you lose leverage. Settle the big terms first.
What to do this month
- Close last month’s books and check revenue against deposits and payouts.
- Start an add-back list with receipts.
- Write down who you would want to buy the brand, and why.
- Talk to two or three advisers, even if you may sell direct.
- Open a folder and start your data room now.
Wrap-up
A sale is mostly won in prep and mostly lost in due diligence. Clean, traceable numbers make every other stage easier.
Synthesis is not an adviser or a broker and does not run sales. It is ontology software and an AI harness. It connects stores, ads, email and books, and checks numbers against their source, such as Amazon sales against settlements. That helps you answer a buyer’s questions from numbers that already tie out.
This post is general information, not legal, tax or financial advice. Talk to a lawyer, an accountant and, if you use one, an adviser before you sign anything.
Questions people ask
How long does it take to sell an ecommerce brand?
It often takes six to twelve months from first prep to close. Prep can take a few months on its own. The search for a buyer and due diligence each take weeks to months. Messy books, a slow buyer or a bad quarter can make it much longer.
Do I need a broker or adviser to sell my brand?
Not always. An adviser runs the process, finds buyers and pushes for better terms, for a fee. Selling direct saves the fee but you do all the work, often with one buyer and no competition. Many owners talk to a few advisers before deciding.
Who buys consumer brands?
Four main groups. Strategic buyers are larger companies in your space. Private equity firms buy with investor money and plan to sell later. Aggregators buy many small brands, often Amazon-heavy ones. Individuals buy smaller brands to run themselves.
What is a letter of intent when selling a business?
It is a short document where one buyer states the price, the structure and the main terms. It is mostly not binding, but it usually stops you talking to other buyers for a set time. Due diligence starts after it is signed.
What lowers the price of a brand in a sale?
Earnings the buyer cannot check, add-backs without proof, a weak recent quarter, stock problems, heavy reliance on one channel or on the owner, and surprises found in due diligence. Each can cut the price or move part of it to later payments.
What is an earnout?
An earnout is part of the price paid later, only if the brand hits set targets after the sale. Buyers use it when they doubt the numbers or the growth. It shifts risk to the seller, so read the targets and who controls them closely.