Answers
How do you check paid ad dependence before buying an ecommerce store?
Short answer: Ask for 12 months of ad spend and ad-attributed sales by channel, next to total sales from the store's own records. Work out what share of sales and profit would be left if ads stopped, and whether returns on ad spend are steady or falling. A big share from one ad channel, falling returns, or ad spend cut just before listing are reasons to restate profit and pay less.
Why does ad dependence matter?
A store that gets most of its sales from paid ads is renting its customers. If ad costs rise, an ad account is restricted, or the new owner runs the ads less well, sales can fall fast. You can still buy such a store, but the price should reflect how much of the profit depends on ads working as they do today.
What numbers should you ask for?
- Twelve months of ad spend by channel, straight from the ad accounts, shared live or by export.
- Total sales by month from the store's own platform, so you can compare them with what the ad accounts claim.
- Sales by source: paid ads, organic search, email, returning customers and direct.
- Return on ad spend by month (sales from ads divided by ad spend), and the cost to win a new customer.
How do you read them?
- Work out the share that depends on ads. If 70% of sales come from ads, ask what the business earns if ad spend falls by half.
- Look at the trend, not the average. Returns on ad spend that fall month by month mean each sale is getting more expensive.
- Check the months before listing. A cut in ad spend just before the sale can make profit look higher while sales are about to fall. Compare the last three months with the year; see how to read the profit and loss statement.
- Check who owns the ad accounts and whether they can transfer, since some ad history and audiences do not move with the store.
What are the red flags?
- One ad channel driving most sales, with little email, search or repeat business.
- Ad spend cut sharply in the last few months, with profit rising at the same time.
- Ad dashboards that claim more sales than the store recorded, which usually means double-counted attribution.
- Ad account warnings or restrictions that the seller did not mention.
What does a composite check look like?
This is a composite example, not a real deal. A store lists $5,000 a month in profit, asking $120,000. Ad spend averaged $8,000 a month over the year but was cut to $4,000 for the last three months, and the store's own records show sales starting to slip. The buyer models ad spend back at $8,000 a month with sales at their yearly level, restates profit at about $3,600 a month, and offers about $85,000, with part of the price tied to sales holding for six months after closing.
Run the listing through the free red-flag checker first, then work through the ecommerce due diligence checklist.
Frequently asked questions
What share of sales from ads is too much?
There is no fixed line. Our checker flags any single channel above 60% of traffic as a prompt to check. The more sales depend on ads, the more of the price should depend on them continuing to work.
Should I trust the return on ad spend shown in the ad dashboard?
Not on its own. Ad platforms often claim credit for the same sale. Compare their totals with sales in the store's own records.
Do ad accounts transfer when you buy a store?
It depends on the platform and how the account is set up. Check each platform's own rules and plan for some lost history or audiences.
Sources
- FirstPass Memo, red-flag checker rules, our own rules, published as /rules.json
- FirstPass Memo, seller question bank, October 2026 (general checklist), our own questions
- FirstPass Memo, free buyer calculators, our own calculators; the formulas are on each page
Related
- Free red-flag checker
- Ecommerce due diligence checklist
- How to verify Shopify store revenue
- How to value a Shopify store
- How to read the seller's profit and loss statement
- Red flags when buying an FBA business
- Red flag: one channel over 60% of traffic
- Red flag: last month's profit below average
- Glossary of listing terms
- More questions buyers ask
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Composite examples are invented and labelled. Figures from other sites are quoted with a link and the date we read them; FirstPass figures are asking prices and seller-stated profit, not sale prices. Informational screening only, not investment, legal or tax advice.