how much is a drop shipping site worth? (to sell)

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So i have some drop shipping sites i am currently running/scaling they are currently making around 5-7k $ P/M net profit, i want to scale them to around 15-20k Net per month and then sell them which brings me to the question "how much could i sell them for?" and how do you make an evaluation for such sites?
#drop #sell #shipping #site #worth
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  • Profile picture of the author Peter Adamson
    A drop shipping site is much closer to a brick-and-mortar business than some other types of Internet marketing businesses, which is a good thing IMHO. Many web site valuations are quite low due to the perceived volatility of online businesses, sometimes just a few months' turnover.

    As a rule of thumb, businesses tend to sell for 3x annual turnover if they are reasonably profitable. Alternatively they go for 5x to 8x annual earnings before interest and tax (EBIT).

    The valuation will depend on the perceived stability of your company. If your month-to-month sales depend on cutting-edge latest SEO methods, then that is a bad thing because if your SEO tanks so does your business.

    On the other hand if your turnover depends on 1,000 resellers who bring in orders month after month with little or no maintenance that is a good thing.

    If you do it right $20K net profit per month could well be worth over $1 million in a trade sale. First talk to your accountant who will know a) a lot about your business and what it is worth and b) potential buyers. If your account can't line you up with a buyer talk to a M&A broker. Don't give them an exclusive. Fees can be high but there is a reason. Make sure they are well recommended.
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  • Profile picture of the author agmccall
    I had a ecommerce site and had a broker contact us on behalf of a large player in our niche. It was the golf niche. when asked what would be offered I was told 5 years of sales. so that is a start

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  • Profile picture of the author ChrisBa
    Originally Posted by smurfboii View Post

    So i have some drop shipping sites i am currently running/scaling they are currently making around 5-7k $ P/M net profit, i want to scale them to around 15-20k Net per month and then sell them which brings me to the question "how much could i sell them for?" and how do you make an evaluation for such sites?
    What's the age of the site and how long has it been this profitable?
    Those are questions that will help determine the worth.

    5 years of sales seems high but possible. In the end it's only worth what someone is willing to pay.
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