Opinions on how to Price this online business - $24K /Month Profit

I am thinking about selling off all of my online businesses and there is one that I can not determine a value on and it is an eBay Power Seller Business.

I have been thinking about either buying a mainstream business that would take to much of my time to juggle them both so I was thinking of either selling it or hiring someone to run this for me.

There are no scams or tricks in this, it is a viable and established business with nothing hidden, no threat to the business or industry currently or in the future that I know of.

There is no rocket science involved, it is a dropshipped product, listed on eBay, and anyone knowing the supplier, product and how to list an auction on eBay can do the same thing.

The product(s) are not time sensitive products, they are real products and not information or get rich quick schemes and these numbers are based on my opinion of the 10 best selling products out of about 500 products like it.

I would love to claim that I am a genius, but that is not the case.

If someone was more energetic than I , they certainly could easily double these numbers.

I simply can not find a comparison to properly deterine its worth.

Here are some numbers:

$72,000 Average Per Month in Revenue
$24,000 Average Per Month in Net Profit
Ebay Feedback Rating of 100% Postive and 892 Feedbacks as of this morning.

Averages are based on the last 6 months, but has been in business for 9 months.

It is an Ebay Power Seller Business, with no store, but it is a Canadian Incorporated Business that owns the eBay Account so it is transferrable.

Product will NOT be revealed in this thread or in any PM's for obvious reasons

I currently Use DropShippers for simplicity , but profits can be increased if the products were purchased Wholesale and shipped.

I work on this for 2-3 hours per day, 7 days per week.

I have all emails sent to my Blackberry so that I can answer questions and see my sales come in on the fly.

Does anyone have an opinion on a value or know of a way to properly determine the value of this or if it is even saleable?

 

$480.000 I would say (revenue - profit) x 10

 

Thanks for your interest, but it is not currently for sale as I stated in my OP.

I am trying to figure out a value to determine whether I should sell or hire someone to run it for me as I make my transittion into an offline business.

 

Thanks for your input, I have never seen that formula used before.

But I am a newbie at selling online businesses.

 

I don't think that formula makes any sense because with that more profit = less value.

 

Would holding out for a year garner a higher fair market value or would the difference in price from 6 months established profit to 12 months be not worth the wait?

 

The value of your business is to early to be determined. The standard formula for business valuation is 3x the sales for the business. Usually this is determined over a period of at least one full year of operation, two years preferably. There could be any number of reasons you're having the sales you currently have. Cardinal rule of business is: 'current value/earnings is not indicative of future success.' Just ask the automotive industry. You say you net $24k per month working on it 2-3hrs. I don't know any prudent business owner who would walk away from $300k per year for part time work! . The fact that you have these types of numbers (average $72k/moth) in only 9 months of business denotes that you are one of the greatest businessmen in the history of the world, and you would be wise enough to know not to sell. Good luck with your business.

 

It's not a formula indeed, just an idea, usually sites are sell x 24 of proffit or 10/12 revenue.

 

I'm sure you meant 'revenue - cost'

 

Totally agree. There is no way anyone would pay more than 3x the sales for this type of business and involving the amounts you mentioned.

 

If you have a solid year of 72k/mo rev 24k/mo profit, then you have consistent revenue. However I still think there would be plenty of interest if you can prove what you earned for one month. You would need to have potential buyers sign something saying they can't take your business though. I'm guessing you could sell something like this for $200k+, however I don't think DigitalPoint is a good place to sell it. Try DNForum.com

 

First, thank you everyone for your input.

For those who have been Messaging me, wanting to run this ... I already have a person in mind to run this if I choose to go that way.

 

I still don't understand why you would be selling this? You're pretty much free rollin' in life... can't be that greedy can you? Get your family and friends involved...

 

Its a question that noone can answer without a lot more info. The simple answer is that its worth whatever someone wants to pay for it. The big problem i think you have is that a dropshipping operation is very easily duplicated as soon as someone finds out the product. So in effect if i look around and find your niche i could be earning the same as you in a short while. The product your selling might get more competative and your sales might be half in a few months. etc etc

As Ebay is such a competative site and with tools like pulse etc im surprised you can make that profit without everyone else jumping on the bandwagon.

For me this wouldnt be worth 10x or even 5x value but the next guy might disagree. Good luck

 

Greedy?

Where in the heck did that come from and what in anything that I have said or that you feel that I may have implied that lead you to believe that?

 

Shafty,

Thank you ... you seem to get it!

That is exactly why I can not determine a price.

Anyone with a very basic knowledge of the internet can do this and copy what I am doing.

And truth be known there are people doing it already ... I am one of them I would love to claim originality of this idea but it was a *borrowed* Idea that has had me puzzled why everyone is not doing it.

In all fairness to myself though, I have a Dropshipping deal with a company not known for dropshipping and I doubt many know this, because the company does not like to do it and does not advertise that they do, so 99% of the people feel that they would have to have the equivilent amount of monthly revenue in inventory.

You can not search on the web and find a dropshipper for the products that I sell ... at least not for the prices I can sell them for.

Doba and those type of Businesses have one or two of the products, but offer them to eBay sellers at 20% more than I sell them for on eBay.

Anyway ... Your way of thinking is the same as mine in that anyone could copy this very easily if they knew my suppliers and knew a few very minor ebay and supplier tricks.

If I could get 6-10 times revenue, I would just incorporate about 10 businesses all doing the same thing with different products in each one and then sell them in 6 months to a year and then retire.

But realistically, I do not believe that I can expect a selling price that high.

And the bigger issue is how do you trust anyone, even a family member to keep your secrets if you have someone run it for you.

Yes, you can have a confidentiality agreement all you want, but they are easy to work around and hard to prove a violation against anyone that has a clue on how to work around it.

In an ideal world, I would replicate the comapny 5 - 10 fold, incorporating different products in each business and hire help to run each.

But hire someone that sees that they can put the $300K - $500K per year in their own pocket and watch how fast they find a way around the confidentialty and competition agreements.

These are the same issues that make this business a hard sell and most likely decrease its value.

Any prudent business person that might buy this business
must realize the simplicity of replicating it, and without full disclosure on a business that might possible be worth mid $XXX,XXX no one in their right mind would buy it.

No one spends that kind of money without fully understanding what they are buying first.

 

Hello, thanks for taking the time to read my message.

Selling dreams to dreamers.


Kind regards,
-chrisjones

 

If it was a website..It would be worth about $600,000 or more as it would only take a few years to start turning a profit....But being its an ebay business I would say at most it would be worth a third of that...all it takes is a few bad feed backs to drop those sales..This is just my opinion...I may be wrong..

 

one more thing why would you come on a forum to get an appraisal ...Something that big one would think you would seek an appraisal from a professional firm...by asking for an appraisal on a forum kinda makes it suspect

 

i am interested send more info .... i will bid.