What is an Affiliate program making $20,000 a month NET worth?
 

What is an affiliate program with 4 sites making $20,000 a month NET worth?

I have a friend who is contemplating selling his program, and is trying to decide if it is worth seling outright, or better to just keep it and let the monthly $20k just roll in. He is very private and keeps a very low profile and does not post on the boards, so I am doing this as a favor and will send him the thread to see the responses.

He would be selling his entire network, which includes 4 sites, all the content in the sites, the affiliate program, his affiliate list.

80 to 100K
But it depends on a lot of things.

Like what?

You need to know what the percentage of rebills vs. new joins are in that $20K/mo. figure.

I'd value the content at 20-30% of original cost. Sad but true.

As an example if it was 20% new joins & 80% rebills I would value the company at Net monthly income x 5 in addition to the un-depreciated value in tangible assets, 50% of program license costs and 20-30% of all content licenses.

That being said I have never bought or sold a program, but that's similar to how the non-porn sector would work for a privately held company.

There should be a math equation you could use to work the rebills vs. new joins ratios to figure out a multiple to value the program by but you'd have to consider the age of the program as well.

If he wants to sell it to a publicly-traded company just take the figure from the previous equation and multiply it by 10x-30x :thumbsup

There was an old thread about this. The concensus was 3 to 5 times monthly earnings. I don't know if the search function has been fixed, but the thread is in the archives.

Bottomline, it's whatever the market will bear.

At 5 months net he would have people beating down the door.
me being one of them.

icq 166708909

Personally, I'd give your friend 12 months net if certain provisions are met.

It's worth keeping.

Generally for a fast sale to someone in the biz anywhere from 4 to 6 months.

If you can catch an investment group or someone who's not to sharp you might be able to grab 12 to 24 months.

6 months? That would not be worth selling to him. I mean how could you realistically sell it for 4 to 6 months when you can just keep it another 6 months and make the same amount?

I would think that 12 months would be more fair?

I think it's worth a Ferarri 360...

keep the 20k/month. Nice asset if he isn't doing much of the work anyways. Or if that work doesn't take him that long.

yeah, would not sell unless he gets 12 months minimum!! even then, would need to be desperate for money.

thanks
tony

Send me an ICQ with the price if you are interested in selling.

Selling businesses that are throwing off cash requires a different type of evaluation, and nowhere near 12 months.

You always have to leave something on the table for the buyer and if you are selling something that is showing net profits of $20K/month you are more likely than not motivated to sell or else you would just keep it.

3-6 months is a fair valuation.

Nope. Not fair at all to the buyer.

I would do the evaluation differently.

When buying a program you pay for the content, the sites/domains/designs, and the daily traffic brought in by affiliates.

Rebills don't mean anything other than to tell you if the program was run well. (and whether or not you need to redo the members areas) The previous owner would keep all of his old rebills. There are many reasons for this.

Rhino,

If conditions where right we would buy at 12* monthly ..

icq me if interested in talking: 348 202 769

->

Do all of the sites fall within the same niche, if so what is the niche? If not, what niche does each of the sites fall into? Thanks!

Nice stuff Lenny.

depends on where the traffic is coming from

when selling a site you will almost always get less than it's really worth... I can't really come up with any good situation where selling a site below it's true value would make sense... so I would just keep it and enjoy the 20k/month for as long as you can...

SO after all payouts its making em about 3K a month?

I thought "net" means after all expenses?

oops, your right.

Anyways regarding yer friend Rhino...
Put it in the hands of a management company if he isburnt on it.
TOugh life making 20K a month...

LOL.

This sounds good but where do you find a paysite management company? And if this is anything like other businesses, A poor manager can turn the 20k into red in about a week of screwing around.

25k.............................

and have him keep his recurrings

If content is exclusive, I am interested in purchasing. Email me at

btaylor333 (at) bellsouth (dot) net

more details if your friend ends up wanting to sell. We are in acquisition mode lately. :) So anybody else with exclusive content sites or programs looking to sell you can also email me at the email above.

In regards to price, No 2 situations are the same. If your friend is responsible for sending 100% of the joins to his program it will be worth a lot less to any buyer, as if he sells there will be NO new incoming joins. Lots of different variables come into play when valuing a site or program.

Adult is very different to mainstream.

A mainsteam affiliate program can easily fetch 1-3 years net.

B&M established businesses go for 3-6 years gross!

Adult? Tends to be 3-8 months revenue. Generally one is best keeping their site unless capital is needed. In that case they will take a loss on the value. Perhaps you can find a bridge loan in adult, if the problem is a receivables gap.

Can you contact me on ICQ so we can speak please?

Good point. :thumbsup

Two major things you need to take into consideration.

what % of the 20K is from his affiliates generating revenue and what % is from his own traffic generating the revenue. I would feel safer if it was all affiliate revenue. I can build a membership site, get it up to 20K net in a couple months sell it to you and direct my traffic to my new sites i am building, etc.. so what are you left with 2 - 3 months of declining rebills and a huge advertising expense you need to pay that is cutting into that nice 20K net per month the guy was telling you about when you bought the business. You would have to be a fool to think the traffic is going to stay 100% when you buy it.

The other thing is who does he use for processing ???? I could have sold you guys a hell of a deal on memberships sites back in August... Would you be sick if you paid 100K for a site thatwas neeting 20K a month that was using ibill, do you think you would have been fucked? Considering 3rd party billing companies go out of business on a daily basis you might want to check into that.

Last thing is why does he want to sell ??? 19 out of 20 times it's BS. he wants out... well if he thinks someone will pay him for 3 - 4 years then that makes sense, but if he is only going to get 6 months of income from the sale, why not hire someone one to run it for you if you dont want to be bothered with it ? makes no sense ?

And for the scammers... i can go use a credit card to buy adverising on a site that makes 20K a month on the books (minus showing my credit card) when in reality my site breaks even but i market it as 20K net... how can you spend that kind of money and just assume they are telling the truth, especially when it makes no sense for them to sell.

Because that is not the way things work. If we use your logic, then he might as well keep it for the next 80 years because at $20k/month, he would make $19,200,000.

i think many would dissagree with this. the only real asset that factors into the equation is the revenue.