How much the business/website worth and for how much it's possible to sell?

11 replies
Hello guys,

I have tried to search the answers on many sites, sources, forums and so on and almost all the answers are different, one say you can get 10x your net revenue, some say 20x your net revenue.

What do you think guys, or maybe you have experience selling the business/websites, how much is the website worth if it makes let's say $5k per month or $10k per month from selling digital marketing items, basically SEO services, freelancing services. And the net revenue is for 2-3 years.

What about e-commerce websites selling physical products? Does such websites/business are worth more? Or let's say amazon affiliate websites?

What are the best places to sell such websites/businesses? I know the only flippa, not sure if it's a good place.
#business or website #sell #worth
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  • Profile picture of the author Chris-
    Maybe contact a bunch of business brokers (easy to find on Google), and see what advice they have?

    And have a look in FaceBook and LinkedIn Groups on business, entrepreneurship, start-ups, etc. . . . some of those have some spam, but there are genuine posts as well, and plenty of people with money to invest looking for a business to buy (I often see posts from people wanting to buy a business), and online businesses being ideal right now

    Chris
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  • Profile picture of the author writeaway
    Assuming the business' figures can be INDEPENDENTLY VERIFIED, valuation depends on a series of factors

    First, it depends on how much repeat orders or long-term contracts it has

    It also depends on how big of a % of its business is from ONE OFF orders

    Finally, it depends on how CLOSELY connected the business is to the PERSON who started it / ie., one man band that scaled up but customers still see the founder as THE business.

    Service sites don't usually sell for a large MULTIPLE unless it's well organized to address the issues above

    It's not unusual to see 6 figure service businesses crash to ground once it's sold since many of the clients end up voting with their feet

    Passive income sites with ORGANIC traffic, on the other hand, are worth the money ... if their traffic is durable
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    • Profile picture of the author DABK
      Like Writeaway said, it depends on what you are selling.

      If you are selling a baby care business that rents the building it operates, you are selling the contracts, systems, website and reputation. And all can be verified.

      From personal experience, that can be sold for the net income over the previous 3 years.

      When you are selling a website, unless you sell contracts and systems and reputation, you sell whatever the perceived value if building a similar site is, for a small site, it could be a few hundred dollars.

      If you have a written down system for maintainig the site and the income stream (.i.e., marketing) but no contracts, you are selling less value. Seems about a third. So, about 2 years worth of net income.

      But, then, it depends where you are selling it.

      There are markets and markets; in some markets, they are willing to buy a dollar for 95 cents, in others for 87 or 91.

      Finally, value is in the eye of the beholder. If you can convince someone to give you 45 times the net income the site made last month, who cares that everyone else says the site is worth the net income it made last month?

      Value is also dependent on why you sell. If you want it to be sold by the end of the week, you will sell for less than what you think full value is.

      So, what are you selling?
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  • Profile picture of the author dave_hermansen
    One of our services is that we broker eCommerce website sales for both sellers and buyers and I can give some basic parameters ...

    Generally speaking, a website sells for somewhere between 12 months and 36 months of profit. What affects those numbers the most are the number of years a website has been operating and whether the numbers are progressing upward year over year or declining year over year.

    Another factor is whether or not the business is "evergreen", selling products or services that people have been using for many years and will continue to use for decades to come. That type of website is worth substantially more than one that is selling a "latest fad" type of product or service.

    Another factor is how easy a business is to run. Does it take 50 hours per week of your time or does it only take 5-10 hours? People will pay more for a business that takes less time to manage. Time really is money, but in this case, less time means more money!

    There are plenty of companies that buy and sell websites as their business model. It is what I used to do to make money. I would find a website that could be improved a lot and offer to buy it from the owner for a reasonable price, knowing that the site was really worth at least three times that much once I made the tweaks it really needed. So, a website that is making decent sales despite being poorly made or poorly marketed is worth a lot more to a potential buyer than one that is running perfectly. It doesn't mean you will get any more for that website necessarily; it does mean that you might have more interested buyers which MAY drive the price higher.

    Finally, a huge factor that can sometimes get you higher multiples like 48-60 months worth of profit is whether or not you are selling your own exclusive brand (obviously this usually only applies to selling physical products unless your service has some exclusive software that other companies do not offer). The harder it is to replicate your business model, the more money you are going to get for it.

    I hope this helps!
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  • Profile picture of the author agmccall
    Years ago I had a ecommerce site that sold golf clubs and a rather large golf equipment site wanted to buy our little site. A broker contacted us several times, we probably should have sold. Anyway we asked the broker what would they pay. The broker told us at the time, we should get between 5 and 10 years of sales. Not sure if that is what it is now.

    al
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  • Profile picture of the author depotgang
    List it and its specifics on Flippa...it will give a good idea of what it's worth. Probably more than you think and less then you want.LOL
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  • Profile picture of the author cheese1688
    Thank you guys for so many informative and useful info/answers!

    My business is selling digital stuff, not physical, so do you think it's harder to sell such business instead of ecommerce website where psychical items are sold?
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  • Profile picture of the author Medon
    No fixed price but certainly the revenue it generates and the niche are some of the things that must be considered when pricing a website.
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  • Profile picture of the author joaquin112
    A website is worth whatever someone is willing to pay for it. My suggestion is to aim high, and keep working on it. If your business is good, someone will eventually buy it, even if you're asking for a higher multiple than what most people recommend.
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  • Profile picture of the author Luke Dennison
    You can sometimes sell a website and get up to 10X - 15X the monthly revenue of the site. This happens only very rarely when you can prove that the income has been steady for 2+ years.

    Usually you only get about 5X revenue. Check out Flippa listings to get an idea of what people are willing to pay for different types of websites.
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