How should a buyer assess key-person and agency dependence in ecommerce?

Answer: A board should assume key-person risk exists when one individual holds critical marketplace knowledge, credentials, agency relationships or exception-handling expertise that is not documented elsewhere. The test is practical: if that person left tomorrow, could the company continue trading, access every account, reconcile performance and make routine decisions without material disruption? The answer does not need to be perfect, but material dependencies should be explicit. Buyers will discount a business whose ecommerce operating system resides primarily in one person’s head.

Why this matters

Key-person dependency reduces resilience today and transferability at exit. Marketplace operations are especially vulnerable because informal knowledge accumulates quickly.

What the board should examine

  • Credential ownership
  • Documented procedures
  • Backup decision-makers
  • Agency and platform relationships
  • Data access and reporting
  • Exception handling knowledge

What good looks like

Critical access is company-controlled, procedures are documented, responsibilities have backups, and no single departure would materially interrupt revenue or prevent management from understanding performance.

Related questions

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