Hi,
I've purchased two websites in the past, both very small in their traffic and sales. I felt both times it was a fair price and the bulk of the cost was for their existing inventory. I'm in a position now to get hold of a website of a much larger following with a much larger inventory and the asking price is just as high as a real retail store.
Initial offer is around $100,000 on top of a $13,000 inventory buy out. Gross income roughly around $140k and a net of around $31k for the last two years.
If anyone has any experience with the process of going through the buying of such a vast inventory as well as the high dollar asking price, please share. I should also note that the software currently used to run the site is not part of the package... So to me, what the buyer is getting is a name and inventory. Any thoughts would be much appreciated.
Thanks

I think it's high. That's just me. It's easy to say that you can expect revenue of "xxx" in the next few years, but in the online world, you can never expect anything. I have heard that sales price of a site is supposed to be 3x yearly revenue? I don't buy it.

You have to ask yourself- "how much will it cost me to build a site and get this kind of revenue?". I can promise you it won't cost that. If you think it does, hand me the 100K now, and I can PROMISE you i'll put more than 31k a year in your hands.

Unless this site has an extremely loyal following with absolute proven revenue for the future. I don't see it. 50k-75K, maybe, and that depends on future stability.

Of course, just my opinion.

Ditto Rungreens comments.

I will have to agree with RunGreen.

I look for the following when I am purchasing websites:

• Is there any legal issues ...copy write (this is the big one), etc
• Age of site
• How much traffic
• Has the site been black listed by search engines
• Gross sales verse profit

If a person is looking too sell I have found these sites can be bought cheap. After all if they are trying to sell, more than likely they have not been keeping the site up. I have bought competitors sites fully operational for less than a $1,000. Of course these sites have no inventory. It has been my experience in buying inventory, it is bought for pennies on the dollar.

If you approach someone to buy their site, then this changes all the rules. So in your case, 25K tops. What if the guys is running a mirrored site? You just gave him 25k and he still keeps all customers.

Yup, $100k is way to high.

You need to find out the net profit. If the site only made $10k net profit from the $31k gross sales, then I think you work out a fair offer from there, and it certainly wouldn't be $50K! Also take into consideration what work needs doing on the site before you make an offer.

Just read this in a newsletter that I receive.
FYI
Steve

Here is a link on selling webs I received today
Hope you can view

http://www.practicalecommerce.com/articles...=eCommerceNotes

Dave

Great article. Thank you very much.