Inside Our Diligence: The 40-Point Checklist We Run Before Buying a Brand

Diligence isn't suspicion — it's respect for the price. Below is the working checklist we run on every brand we evaluate, organized the way we actually run it. It's interactive: check items off as you assess your own brand (your progress saves in your browser). Founders preparing to sell get as much value from this list as buyers do — every unchecked box is either a discount you'll absorb or a fix you can make first.

How to use this

Sellers: work the list 6–18 months before going to market. Each section maps to a multiple driver from our multiples guide.
Buyers: steal it outright. The order matters — financial truth first, demand quality second, everything else after.

0 / 40 checked

I. Financial truth (10)

Accrual-basis P&L for 36 months, monthly granularity
Bank and processor statements tie to the P&L (3-way match)
Add-back schedule with documentation for every line
Revenue by channel, by month — no blending
Gross margin bridge: landed COGS, shipping, processing fees separated
Inventory aging report; obsolete stock written down
AP/AR aging; no surprise vendor balances
Sales tax nexus review and filing status
True working-capital needs by season
Quality of earnings: revenue recognized at delivery, not cash receipt

II. Demand quality (8)

Repeat purchase rate, cohort-by-cohort (not blended)
Revenue share from returning customers
Channel concentration: no channel >60% without a discount story
CAC trend by channel, 24 months
Email/SMS list size, engagement, and revenue share
Review velocity and rating trend across platforms
Branded vs. generic search demand trend
Discount dependence: % of revenue sold on promotion

III. Product & supply (8)

Supplier concentration; second source identified for hero SKUs
Landed cost trend and tariff exposure
Lead times and MOQ terms in writing
Quality metrics: defect and return rates by SKU
SKU rationalization: top 20% SKUs vs. revenue share
IP: trademarks registered in selling markets
Product liability insurance and claims history
Regulatory/compliance exposure (category-specific)

IV. Operations & tech (7)

Fulfillment costs per order vs. benchmark
3PL contract terms and termination rights
Returns process and reverse-logistics cost
Platform/app stack documented; no fragile custom code
SOPs exist for every weekly process
Ad accounts, domains, and socials owned by the company entity
Data: analytics clean, pixel/event tracking verified

V. People & transition (7)

Org chart with hours/week; owner's actual role documented
Key-person dependence: what breaks if any one person leaves?
Contractor agreements with IP assignment
The owner's post-sale availability in writing
Customer-service tone documented (voice guide)
No undisclosed related-party transactions
Why is the seller really selling? (The answer must hold up.)

A brand that can hand over this list complete has already earned half a turn of multiple. The list is the trust.

What this means for LAMPWORK

This is genuinely our working list — we publish it because diligence goes faster when both sides start from the same map.
Sellers who arrive prepared close faster and at better prices. Send us a data room with this list covered and you'll have a number in days, not weeks.

Checklist reflects standard SMB e-commerce diligence practice adapted to LAMPWORK's underwriting. Not legal or financial advice; your deal counsel should drive confirmatory diligence.

I. Financial truth (10)

II. Demand quality (8)

III. Product & supply (8)

IV. Operations & tech (7)

V. People & transition (7)

Own a brand this applies to?