How to Maximize Multiples when Selling Websites?

Discussion in 'Site Flipping' started by dennis_797, Feb 18, 2017.

  1. dennis_797

    dennis_797 Registered Member

    Jun 25, 2012
    Likes Received:
    Hi there,

    I'm looking for advice on selling a website. I recently sold one on Flippa for approximately 40x the monthly markup, generating just shy of $10,000. This was way more than I was expecting and it has raised a few questions about flipping websites. Two questions spring to mind in particular, if anyone with experience is willing to help.

    1) The main websites I'm aware of are Flippa and Empire Flippers. Are these the best? I always associate Flippa with lower-end websites, while Empire Flippers deals with the more expensive, established businesses. Is this correct? Is there a "top" monthly profit you'd recommend selling on Flippa before graduating to a broker like Empire Flippers?

    2) Do sites generating higher profits earn smaller multiples? At around the $100-200 per month, I can imagine 40x being not too unrealistic, as lots of people have $5,000-10,000 to invest. At, say, $1,000/month, I imagine the buyer pool shrinks significantly as far fewer people have $40,000 to invest in a website. Plus, the people willing to do so are more aware of multiples and the buying process, thus wouldn't pay the inflated 40x multiples.

    With this (second question in particular) in mind, is there much point growing a website out to its maximum potential?

    My concern is that I could sell a $250/month site for about $10,000 and 40x multiple. If I grew it to, say, $500/month and the multiple fell to 20x, the price would again be $10,000. In other words, no incentive to grow the website, as the selling price stays constant as multiples fall.

    I'm sure you'd always make more from a website that earns more money and this example is quite extreme. But if multiples falls there is still probably a "peak" level to sell at to maximize multiples. Does anyone know approximately where this peak level would be?

    Thanks everyone!