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How to calculate the value of my online business?

Discussion in 'General Business' started by chilikos, Dec 18, 2024 at 9:39 AM.

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  1. #1
    Hi guys,

    Looking to sell my online e-commerce business and I don't know how to calculate its value?
    Profitability for 2 years? For 3 years? (net profit ~ $3000/month).
    Flippa calculated the price around $90000.

    Can anyone please tell me what would be a reasonable price to ask?

    Appreciate any feedback from you guys!
     
    Last edited: Dec 18, 2024 at 9:57 AM
    chilikos, Dec 18, 2024 at 9:39 AM IP
  2. CarlosFedcjen

    CarlosFedcjen Peon

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    #2
    Flippa's valuation seems reasonable since most e-commerce businesses are valued at 24-36x their monthly net profit. With $3000/month, $90K is on the higher end, likely factoring in growth potential or stability. To make your price more attractive, you could provide detailed performance metrics and trends for the past 2-3 years. Have you considered consulting a broker for a more tailored valuation?
     
    CarlosFedcjen, Dec 18, 2024 at 11:14 AM IP
  3. chilikos

    chilikos Greenhorn

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    #3
    Not yet.
    I'm new to this and this is my first experience in selling.
     
    chilikos, Dec 18, 2024 at 1:26 PM IP
  4. sarahk

    sarahk iTamer Staff

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    #4
    I'd be adding in
    • how much time is spent working in the business
    • any specialist skills or education needed
    • what are the prospects for the market - is the business about to be made obsolete or is the market growing overall?
     
    sarahk, Dec 18, 2024 at 4:02 PM IP
  5. chilikos

    chilikos Greenhorn

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    #5
    how much time is spent working in the business
    - maybe half an hour a day/two days to respond to requests from potential buyers that come through the contact form

    any specialist skills or education needed
    - absolutely not

    what are the prospects for the market - is the business about to be made obsolete or is the market growing overall?
    - I think there is good potential for growth since there are not many competitors and this niche will always be relevant
     
    Last edited: Dec 18, 2024 at 9:46 PM
    chilikos, Dec 18, 2024 at 9:39 PM IP
  6. sarahk

    sarahk iTamer Staff

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    #6
    This is an interesting one, if the buyer puts more time in it, can they increase the value of the business. Adding value is something many/most business buyers will be looking for
    This devalues the business as there's a lower barrier to entry, but increases the number of people who might buy it
    This needs to be one of your key selling points and will increase the sale price. Just remember that once upon a time Kodak thought that too.
     
    sarahk, Dec 19, 2024 at 1:32 PM IP
  7. GreenHost.Cloud

    GreenHost.Cloud Active Member

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    #7
    While Flippa's estimate of $90,000 is a good starting point, consider factors like growth potential and market demand, which could influence the final price. Getting a professional appraisal might also help you find a reasonable asking price that reflects your hard work.
     
    GreenHost.Cloud, Dec 22, 2024 at 2:01 AM IP
  8. chilikos

    chilikos Greenhorn

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    #8
    Thank you for your advice!

    It remains to find a buyer who has such a budget.
     
    chilikos, Dec 22, 2024 at 3:08 AM IP