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What is my retail shop worth? How retail businesses are valued in Australia.

By Michael White, director of AUS Brokers and a licensed business agent in Victoria. · Updated 24 September 2026

This guide covers general retail: gift, homewares, clothing, pet supplies, hobby, garden, bike and similar shops. Specialised retail, such as pharmacies, newsagencies, post offices and liquor stores, has its own licences, agreements and ways of valuing, but the basics below still apply.

Start with maintainable earnings

Start from net profit before tax and add back one working owner's wage and super, depreciation, interest, private expenses and genuine one-off costs. Deduct a market wage for anyone else who works in the shop for little or no pay, such as a partner or family member covering Saturdays. Add-backs explained.

Two retail-specific checks:

• Stock adjustments. If stock was written down, or a big stock-take adjustment went through one year, ask your accountant whether it distorts that year's profit. Buyers will look at the gross margin year by year.
• Personal use of stock. Stock taken for personal or family use should be accounted for, or it quietly lowers the reported margin.

Stock at value: the part retail sellers most often get wrong

Retail prices are usually quoted as "$X plus stock at value". The price covers the goodwill, fit-out and equipment. The stock is counted at settlement and paid for on top.

• Stock is usually valued at cost (what you paid for it, excluding GST), not at retail price.
• Damaged, obsolete, out-of-season or very slow-moving stock is usually excluded or discounted, so buyers only pay for stock they can actually sell.
• The contract should say how the stock will be counted and valued, and who does the count. Contracts often set an estimated stock figure, and sometimes a maximum the buyer has to pay for.
• Never include stock in the multiple as well as adding it on top. That counts it twice.

Clearing old stock before you sell helps twice. You turn it into cash, and the buyer sees a tidy, saleable range instead of a back room of dead stock.

What moves a retail shop's price

The lease: shopping centre or strip

For many shops, the location is the business, so the lease matters a great deal.

• Shopping centre leases bring foot traffic, but usually higher rent and outgoings, stricter trading hours, and marketing levies. Centre landlords often have requirements when a lease is assigned, such as refreshing the shop fit-out. Check for any relocation or redevelopment clauses too.
• Strip shops usually have lower rent and more flexibility, but they depend more on parking, visibility and the health of the strip.
• In both cases, buyers check the time left including options, rent against sales, and whether the landlord will consent to the lease being assigned.

Gross margin

Buyers look closely at the gross margin (sales less the cost of the goods sold) and whether it's steady. A falling margin can mean heavier discounting, rising supplier prices, or online competition, and buyers will want to know which.

Online competition and your own online sales

Buyers will ask how exposed the shop is to online retailers. A shop with a loyal local customer base, specialist knowledge, services (repairs, fittings, advice) or products that are hard to buy online is easier to sell. If you sell online too, show those sales separately, and include the website, domain, social media accounts and customer lists in the sale.

Suppliers and brands

Exclusive supply arrangements or local distribution rights for good brands can add a lot of value, but only if they'll transfer to the buyer. Check the supplier agreements, and talk to key suppliers early if their approval is needed.

Seasonality and trend

Many shops earn much of their profit in a few months, such as Christmas, summer or back to school. Show monthly sales so a buyer can see the pattern, and show two to three years so they can see the trend.

A worked example

All figures are illustrative, made up for this example, and are not industry data.

An independent pet supplies shop in a suburban strip is run by one owner full-time. The owner's adult son works most Saturdays without pay. Net profit before tax was $58,000.

If buyers were paying, say, 1.3 to 1.8 times PEBITDA for a shop like this (illustrative), it would be worth about $160,000 to $220,000, plus stock at value.

The owner's stock system shows $100,000 of stock at cost. But $15,000 of it is old or slow-moving lines, so the buyer will likely pay for about $85,000 of saleable stock, counted at settlement. Clearing those lines before the sale would turn them into cash instead.

What retail buyers will ask for

• Two to three years of profit and loss statements, plus the current year to date
• Monthly sales and gross margin, and point-of-sale reports
• A current stock report at cost, with ageing if your system has it
• The lease, including any centre rules, marketing levies and relocation clauses
• Key supplier agreements and any exclusive or distribution rights
• The staff roster with roles and hours (no names needed at first)
• Online sales, and the website, domain and social accounts included in the sale

Selling it yourself? How to sell your business yourself in Australia.

Frequently asked questions

General information only, not financial, tax or legal advice. Figures in the worked example are illustrative.