_co_uk 2 Ecommerce Web Sites - Valuation/Advice

[roydovaston]

I'm sure this question has been raised on the odd occasion but i'd like some input as to the model that people use to value ecommerce businesses.

I'm considering the sale of my business which is a Ltd company with 2 web sites actively trading. One of the web sites has been trading since March 2009 selling wedding products and the other since July 2011 selling personalised gifts for all occasions. I'm sure one or two people may even know the web sites as i've been a member here for some time. At this time though i'd rather not make a direct reference to them in this post.

I'd also be interested in where other sellers have been successful in selling their businesses? Obviously a good start would be this very category on Acorns but are there other platforms that come highly recommended?

I've never sold an established web site before and didn't want to go down the route of offering a detailed overview of my business to just anyone who fancies a nose!!

Any help would be very much appreciated.

Thanks

Roy

 

[donton]

I own an ecommerce business and when we've been approached about potential site purchases in the past we've usually settled at a figure around average monthly profit * 10.

There are some exceptions to the rule dependent on a manner of different factors including traffic sources etc. Other things like inventory also effect selling price.

Ultimately you'll only ever get what someone is willing to pay. I'm always on the lookout to pick up cheap ecommerce businesses to add to my portfolio - it suits some people to take rock bottom prices and cash in fast. Others are happier to play the waiting game and get top dollar instead.

I've only ever dealt with people that approached me directly so I can't really offer any advice on where to list unfortunately.

Best of luck with your sales!

 

[roydovaston]

Thanks for your reply Donton. We've been trading for 2-3 years so we have a decent history to go by.

I think you're right, it's only worth what someone is willing to pay but I've got to have a figure in mind based on something to get to an asking price.

 

[donton]

I would go for average monthly profit of the previous 12 months. But that's just me.

There's no right or wrong answer I guess. I've seen majorly profitable, short term sites go for less than 5 * monthly revenue.

Then again, I've seen old, established sites go for 15 even 20 * monthly profit.

I hope this helps.

 

[namdas]

Another thing to consider is the time it takes to run a site - if you are dropshipping (or employing staff to pick and pack) and the site more or less runs itself you probably don't need to edit your profit figures much, but if you are fulfilling orders yourself you need to count your own time as a cost before you can come up with a profit multiple.

 

[roydovaston]

We'd already planned to use net profit to give us a rough idea. This supersedes the necessity of calculating our time as we'd have already taken a wage.

 

[stender]

Impossible to value without a full picture. Is stock included or is it drops hip/affiliate? Site ranking? Pr? Custom built or off the shelf? Traffic figures/sources? Domain name value? Logo designed?
There may be intrinsic value?

Sites used to sell for anywhere between 12 and 24 months revenue but people are a bit less willing to pay that now as a google reindex can wipe you out overnight. As I said too hard to say.

 

[roydovaston]

Hi Stender,

I agree a lack of information to provide an exact valuation is difficult, at this point just looking for what models people are using as a guideline. I'm actually putting the package up for sale today so any interested parties please get in touch. We're looking for a quick sale and will add a separate thread shortly

Thanks

Roy

 

[stender]

Please pm details roy If its not affiliate

 

[roydovaston]

PM sent - this is not an affiliate business.