The short answer is no — unless you need to divest quickly and an earn-out is the only structure that gets a deal done. Outside of that specific situation, sellers of eCommerce and Amazon FBA businesses should treat an earn-out offer as a signal to renegotiate the deal structure, not as a reasonable way to bridge a valuation gap.
That’s a stronger position than most brokers will state outright, so it’s worth walking through exactly why the data and the mechanics of these deals support it.
What an Earn-Out Actually Is
An earn-out splits the purchase price into two pieces: cash paid at closing, and a contingent amount paid later, tied to the business hitting specific performance targets after the buyer takes over. In a typical structure, a seller might get 60-80% of the agreed valuation at close, with the remaining 20-40% payable over the following 12 to 36 months if the business hits agreed revenue or EBITDA thresholds.
On paper, this looks like a reasonable compromise. It lets a buyer pay less upfront and reduce their risk if the seller’s projections don’t hold up, while giving the seller a shot at full value if the business performs as promised. In practice, for a business under roughly $10M in enterprise value — which covers the large majority of eCommerce and Amazon FBA transactions — it’s a structure that overwhelmingly benefits the buyer, for reasons that have nothing to do with how well the underlying business actually performs.
The Data Doesn't Support Accepting One
This isn’t a matter of broker skepticism. It’s what the deal data actually shows.
The most-cited industry figure on this comes from SRS Acquiom’s 2025 Deal Terms Study: the average earnout payout across all M&A deals is 21 cents on the dollar, meaning 79% of the earnout value promised in letters of intent and purchase agreements never actually gets paid. Roughly 59% of deals with an earnout pay out something, and among those that do pay, sellers typically collect about half of the maximum amount negotiated. 28% of earnouts end up formally contested, and 17% of the ones that do pay only get there after a renegotiation aimed at avoiding litigation.
This isn’t a new pattern, either. An earlier SRS Acquiom study of 720 transactions found that nearly 17% of earnouts ended in a dispute, and about a third of disputed earnouts escalated into formal arbitration or litigation. A survey of M&A professionals found that almost three-quarters believed earnout clauses led to disputes or litigation in the deals they’d worked on.
Put plainly: if you’re negotiating a deal where 30% of your headline sale price is structured as an earn-out, the realistic expected value of that 30% — based on how these deals actually resolve across thousands of transactions — is closer to 6-7% of the total deal, not 30%. Most sellers evaluating an offer don’t run that math. They see the total number on the LOI and treat it as the price, when a meaningful portion of it is closer to a lottery ticket with a low hit rate.
Why Earn-Outs Are Especially Risky in eCommerce
The general M&A data above is bad enough. The mechanics of eCommerce and Amazon FBA acquisitions make it worse, for a few specific reasons.
You lose operational control right when your payout depends on performance. Once the deal closes, the buyer runs the business. They decide the PPC budget, the pricing strategy, which SKUs stay in the catalog, and how much attention the brand gets relative to everything else in the buyer’s portfolio. If the buyer is an aggregator or a strategic acquirer folding your brand into a larger operation, your earn-out metrics are now dependent on decisions made by someone whose incentives may not align with hitting your targets at all — especially if they’ve already decided the acquisition was primarily for the customer list, the supplier relationships, or the Amazon account history rather than the ongoing brand performance.
Ad spend and pricing are easy levers to pull, intentionally or not. A buyer integrating your brand into a larger portfolio may reallocate PPC budget to other products, adjust pricing to fit a broader category strategy, or deprioritize inventory replenishment — any of which can suppress the exact revenue or EBITDA number your earn-out is tied to. Proving that this happened in bad faith, rather than as an ordinary business decision, is expensive and difficult, and it’s the seller who has to prove it.
Amazon-specific integration risk compounds the problem. If your account gets merged into a larger seller account, migrated to a different brand structure, or has its catalog reorganized as part of the buyer’s post-acquisition process, sales velocity and even account health metrics can shift in ways that are hard to disentangle from the buyer’s own operational choices — but that directly affect an earn-out tied to revenue or profit continuity.
Metric definitions get contested after the fact. What counts as revenue, which costs get allocated to your brand versus shared across the buyer’s portfolio, and how add-backs are treated during the earn-out period are all questions that get negotiated once — in the purchase agreement — and then reinterpreted by the buyer’s finance team every quarter after that. Industry data on disputed earnouts shows they typically arise from unclear milestones, changes to accounting treatment, and how the target business gets integrated into the buyer’s operations — exactly the dynamics common to eCommerce roll-ups.
You become an unsecured creditor. Once the deal closes, your earn-out is a contractual promise, not a debt with security behind it. If the buyer’s broader business struggles, gets acquired, or restructures, your earn-out sits behind secured lenders and often behind other obligations in line for repayment. A buyer’s inability to pay is functionally the same outcome for you as a buyer’s unwillingness to pay.
Litigation isn’t a realistic remedy for most deal sizes. For a $2-5M eCommerce transaction, pursuing a disputed earn-out through arbitration or litigation can easily cost six figures in legal fees before you see a dollar back, with no guarantee of collecting even if you win. Most sellers in this size range simply don’t pursue the claim, which is exactly the dynamic that makes an unfavorable earn-out an economically rational structure for a buyer to offer, even one negotiating in good faith.
The One Situation Where It Makes Sense
There is a real exception, and it’s the one built into the thesis of this article: when you need to divest quickly.
This applies to a narrower set of situations than most sellers assume:
- The business is declining and every additional month of ownership erodes value faster than an earn-out risk would
- Personal circumstances — health, a legal situation, a partnership dissolution, or another time-bound event — require a fast exit regardless of price optimization
- The buyer pool for this specific business is thin, and the only credible offer on the table includes an earn-out because the buyer can’t finance the full purchase price in cash
- Waiting for a stronger, all-cash offer carries a real risk that the opportunity to sell at all disappears — for example, in a declining category or one facing a known future headwind
In these situations, an earn-out isn’t a good outcome — it’s an acceptable trade-off in exchange for speed and certainty of exit. If you’re in this position and an earn-out is genuinely the only path to a closed deal, the goal shifts from “should I accept this” to “how do I minimize the risk in the structure I’m accepting”:
- Push for revenue as the metric, not EBITDA. Revenue is harder for a buyer to manipulate after closing than EBITDA, which is why the majority of earnouts in recent deal data use revenue as the primary metric rather than profit.
- Negotiate minimum operating covenants. A contractual floor on ad spend, a requirement that the buyer maintain inventory levels, and restrictions on catalog changes during the earn-out period all limit the buyer’s ability to suppress your metrics through ordinary operating decisions.
- Secure independent audit rights, so you’re not relying solely on the buyer’s own reporting to determine whether targets were met.
- Negotiate an acceleration clause that pays out the full remaining earn-out immediately if the buyer sells the business, merges it into another entity, or otherwise triggers a change of control during the earn-out period.
- Name an independent accounting firm in the purchase agreement as the dispute resolution mechanism, rather than leaving disputes to be litigated from scratch.
- Keep the earn-out period as short as realistically possible. A 12-month earn-out carries meaningfully less integration and manipulation risk than a 36-month one.
None of these protections make an earn-out a good deal. They make a necessary one less bad.
Why Acquisitions Direct Structures Around This
This is the core reason Acquisitions Direct positions a 90-100% cash-at-close structure as the standard for the businesses it represents, rather than treating an earn-out as a normal middle ground in a valuation negotiation. A seller who’s spent years building a profitable brand shouldn’t have a third of their exit value converted into a contingent claim against a buyer’s future decisions and financial health — especially when the deal data shows that claim resolves in the seller’s favor only a small fraction of the time.
When Acquisitions Direct does encounter a situation where a seller genuinely needs a fast exit and an earn-out is the realistic path to getting a deal closed, the priority shifts to negotiating the protective terms above — revenue-based metrics, operating covenants, audit rights, and acceleration provisions — rather than accepting the buyer’s first version of the structure. But that’s a deliberate trade-off made under specific circumstances, not the default way to think about maximizing what you actually collect from selling your business.
If you’re not in a position where speed has to override everything else, the better move is almost always to hold out for a structure where the number on the LOI is close to the number that actually lands in your account.