Price expectations if selling domain/website generating High £xx,xxx profits

[philiporchardphiliporchard is verified member.]

If you think you can double, treble, quadruple the income, based on what you've done with other websites, then buying at 3x annual profits might be a bargain for you...

 

[Retired_Member38]

If you think you can double, treble, quadruple the income, based on what you've done with other websites, then buying at 3x annual profits might be a bargain for you...

I think most websites that are advertised to be sold, you'd be lucky to get your money back never mind see a profit on it. Not all of them, but most.

Look through Flippa etc at the absolute crap being offered. Often when you dig a bit deeper you see all the conveniently undisclosed things - huge traffic drops tied in to Google update dates, private link networks, masses of paid links yet no accounting for them under the site running costs, massive spam, various nepotistic linking purposes with no mention of whether they stay in place, etc etc.

Its usually just someone trying to get off a sinking ship.

 

[mif]

Its only my opinion, but I think websites are far more volatile than any bricks and mortar business.

I agree completely. I was playing Devil's Advocate a bit. I too have seen seismic changes caused by technology shifts.

But, well, I dunno. If its a fly-by-night 'I'm gonna scrape wikipedia content', buy in loads of backlinks and facebook posts, make it look good and punt it to the first newbie that comes down the pike... That's one thing.

But a site built up over many years, with a white-hat reputation, staff, offices, verifiable income streams, ... That's another thing.

www.buyyourrolexhere.at .vs., say, confused.com

I wouldn't give you tuppence for the first. What is the second worth?

 

[Retired_Member38]

The second could be worth a far far higher multiple than a brick and mortar corner shop as there is infinitely more potential for growth.

But when you're looking at things bought or sold on acorn, domain lore, Flippa, etc you're realistically looking at the bottom of the barrel. "real" businesses that happen to consist of a website as its main outlet, would be sold via business brokers etc. Not Flippa.

 

[mart1n19]

Thanks for the comments guys, I know there is mixed opinions on this.

I Suppose at the end of the day, I guess it will come down to opinion. The reason I was asking, is that I know there are many occasions where the domain itself can be worth more than the site is currently earning.


E.G say you owned sex.co.uk & it wasn't fully developed or monetised & was earning a moderate £10,000 a year in adverts/commission whatever.

Does that instantly mean the business is worth £10/£12k based on a strict 12-14 months earnings plan? Not a chance.


I guess it'll come down to who the buyer is: Are they someone who thinks they can develop the domain & turn it into something generating good money, and increasing the overall business value?
or are they someone who simply looks at the past earnings & believes its the best it can earn going ahead?

In Regards to our Roulette.co.uk site, I was inviting offers in the low £xxx,xxx region based on both.

£44,500 net profit in 2014
£75,765 net profit in 2013

Whilst yes we have done work on the site, its not been anything like working 50hours a week in a shop to achieve this income.. far, far from it.


Also bearing in mind our commission rates are an average 35% meaning that casinos have actually generated £192,424 in customer losses in 2013/14, so it could also be useful to someone else, rather than an affiliate.

 

[philiporchardphiliporchard is verified member.]

There is plenty of value in the domain name itself too.

 

[bonusmedia]

It's a valuable domain, and roulette isn't going away any time soon.

It would be a much more attractive proposition if those annual numbers were flipped around. Much harder to find a buyer for a declining business, especially when it is relying on old accounts for income and not bringing in new customers.

The big problem for me is the lack of current rankings/traffic/conversions, which means any buyer has to hope they can turn it round and get it ranking again - often difficult when a site has been squished by Google. This makes the revenue history almost irrelevant - without achieving a great ranking again revenue is only going to dwindle away to nothing.

It's not just a case of facing a risk that it will be hit - that could be weighed up and quantified - it's already happened.

Perhaps someone can rebuild the site and the rankings - but if they know how, why not just spend a few quid on 'rouletteguide.co.uk' or similar?

It really comes down to the value of the domain - which is still high but lower than your expectation IMHO. It would have been different when EMDs were a bigger ranking factor.

If it was doing well and growing it would be a very different story - but then you might not be looking to sell

 

[mart1n19]

Thanks for all the comments, agree with some points for sure. The income on our site has been less than last year, but there has been virtually nothing done with the site for a number of months which is a massive factor. One of our partners left the business & i work with property development, so it's just been sitting dormant.

Guess this is the part in which everyone is different.
For me anyway, If it (or any similar business) had generated over £75,000 net profit this year aswell, then we would be foolish to even consider low £1xx,xxx offers IMO, I'd be personally looking for double that.

Maybe that's just me, but if you look at property for example. Most would agree a 10/15% yearly ROI is fantastic!

That would be like the following: You put an investment aside of £120k buying a flat, rent it out for £10,000 a month & boom! Paid for in 12months time. Haha

Before anyone highlights. I know it's something different, but what I'm trying to say is anything where you recoup 100% within 12 months is brilliant return IMO .. Call me crazy if I'm wrong. Better than your 3% in an isa!

I'm sure the dragons on the den would just snap them all up!

Anyway, guess the post could go on forever really, there is no right or wrong answer. i suppose it's just everyone has different opinions, it's made interesting reading to hear everyone's comments tho!

Cheers for all the input folks!

 

[Retired_Member38]

I invested a fair chunk of my affiliate earnings into property investments also, so I can see both sides of this. imo they are so far apart that they are impossible to compare.

You can go visit your £120,000 apartment, take a walk around the area, and realise there isn't anywhere else in the area that anyone can build. Competition isn't going to change. Demand is likely to be pretty stable also. More importantly, you can take out an insurance policy on the property. Bought with cash, there is basically zero risk. If it sits empty, then unfortunate but fine. If it burns down, unfortunate but insured.

Spend 6 figures on a domain name and you're in for a roller coaster ride. I've spent 6 figures on online projects and lost the lot before. I've also multiplied my money massively on winning ones. Perhaps people coming from a regular saving background would see property as risky... I see it as it completely safe coming from where I'm coming from :lol:

For me anyway, If it (or any similar business) had generated over £75,000 net profit this year aswell, then we would be foolish to even consider low £1xx,xxx offers IMO, I'd be personally looking for double that.

I've not looked at your back links so this paragraph isn't talking about Roulette, just a hypothetical gambling site in general. But if you've done anything massively spammy then £75k net profit may not even justify a £120,000 offer. I see many, many websites offered for sale where there looks like very little to no chance that it holds on without getting whacked by Google for the 1.5 years that you'd be asking for there to even break even. And if you factor in running costs and your own time, you're looking at in reality 2 years or more for the break even point.

My point on page 1 about trying to sell up the food chain would hopefully apply if you did want to sell though... try and sell it to the end user who's buying your leads. 24 months revenue for you is a good multiple, but its only 12 months for them and they may feel thats acceptable. But then you have the declining sales issue too... its impossible for any of us to say without seeing more info there but you're really going to need a great explanation for that. Otherwise it looks like you're trying to get off a sinking ship.

If its dropped then stabilised then thats fine... but you'd only realistically be able to value it on the current levels, not so much what its done in the past.

 

[mart1n19]

Would agree on many points Monkey, it's totally different like I mentioned

"Generally" speaking people aren't going to lose money on property, it's much less risky than a business. Although nothing is a safe investment unless it's sitting in the bank (upto the maximum figure ) we seen that in 2008 when house values dropped massively leaving millions with negative equity.

But yes, we are looking out to end users now, or just keeping the business hence the reason it's been removed from acorn. Personally I'm happy to keep it & get an income than a quick fire sale. It's always worth exploring each marketplace.

Cheers again & all the best

 

[mif]

...The reason I was asking, is that I know there are many occasions where the domain itself can be worth more than the site is currently earning.

E.G say you owned sex.co.uk & it wasn't fully developed or monetised & was earning a moderate £10,000 a year in adverts/commission whatever.

Does that instantly mean the business is worth £10/£12k based on a strict 12-14 months earnings plan? Not a chance.

I too am seeking the answer to this question. This thread seems to have focused a lot on whether its 3 x or 1 x or whether a Panda slapped us.

I'll posit a thought I have been trying to get people to agree with for years: How much value would you place on owning 1 Harley St, London. Currently rented out to some cosmetic surgeon perhaps, rental income xx,xxx pa. Would you sell that property for xx,xxx ?!

 

[bonusmedia]

I too am seeking the answer to this question. This thread seems to have focused a lot on whether its 3 x or 1 x or whether a Panda slapped us.

I'll posit a thought I have been trying to get people to agree with for years: How much value would you place on owning 1 Harley St, London. Currently rented out to some cosmetic surgeon perhaps, rental income xx,xxx pa. Would you sell that property for xx,xxx ?!

Domains and property are completely different worlds - but they are both worth what someone is willing to pay for them.

If no-one is willing to pay your price, eventually you have to conclude your valuation is too high.

 

[acceleratoraccelerator is verified member.]

I too am seeking the answer to this question. This thread seems to have focused a lot on whether its 3 x or 1 x or whether a Panda slapped us.

A domain is worth what someone is prepared to pay for it, it's as simple as that. The question is, have you brought your domain to the attention of enough potential buyers, and asked them what they will offer?

Rgds

 

[mif]

Domains and property are completely different worlds ...

Domains and residential property are different worlds.

Domains and *Commercial* property are similar worlds.

 

[lazaruslazarus is verified member.]

I'm selling £10 notes for £9....

What was your website address again ??

 

[MurrayMurray is verified member.]

If you think you can double, treble, quadruple the income, based on what you've done with other websites, then buying at 3x annual profits might be a bargain for you...

But does your expertise mean they should be able to ask you for more?

I don't think it should