How would you value this type of project?

[animalstyle]

I understand the average valuation of a site is normally in the neighborhood of 20-30x the monthly profit.

I assume the most common sale would be something where the buyer would continue to use the same or similar monetization methods as the seller. I.e. You sell a site generating affiliate rev on Amazon to a media company that continues using Amazon. Pretty straight forward.

Let's say you have a site that sends customers to a specific brand and you work a deal with that brand at 5% commission. Obviously their margins are much larger. If conversations about a buyout started, how would the site value be calculated? Based off the 5% commission, their margins, something in the middle?

 

[andreint]

The same principles apply.

It's not about how much you think they make from your referrals, it's how much revenue is your site generating on its own. So, if you net (5%), let's say, $10k per month on average, I'd ask for a 30x multiple and settle at 27-8 range. Ask for $300k, settle for $270-280k if they start negotiating you down.

 

[Ryuzaki]

I agree. Nobody cares about potentials and possibilities at this level. It's all about profit. You might get some wiggle room in the acceptable multiples range based on some "what ifs" but not much. I may be willing to pay the top multiple if I see stability and a chance for growth, but I'm not going outside of that range and I'm not going to base it on anything but actual, real-deal profit.