Hi Guys,
I run an online furniture business in Denmark (www.1929.dk), it has been online for only 5-6 months, but it has had a tremendous growth and is currently doing around $15.000 in sales pr week. The gross margin is very high...this is basically a very good little business.

I have around 5-800 unique visitors pr day, mostly from google (partly adwords) but more and more from my growing memberdatabase (currently +3000 members). The domain is PR4, most subpages PR3.

The technical setup is handled by a shopservice that actually does a marvellous job. BTW, this is also good for due diligence, as all stats (sales, visitors, etc) are 3. party.

Logistics are handled very easily since the manufacturer sends the furniture directly to the end clients all over Northern Europe.

Suppliers relationship is also top. I am importing everything from China, and have been using 3-4 different suppliers. Now I have found the one with the best quality and most flexible setup - finding someone in China that you can trust and work with on a long term basis was the hardest task. Its a joint venture company partly US/CN owned.

1929.dk was never meant to be my long term source of income, but actually just something that I could do while being on maternity leave.

During the last 12-18 months I have been working on another concept (which is quite ingenious, if I may say so :)). This new thing is going to require 110% of my energy/time/money
- So I am ready to part with 1929.dk now.

The question is: HOW MUCH CAN I ASK FOR THE COMPANY?

To sum up
- $60/65k sales/month (available on 3. party stats)
- High gross margins (~50%)
- 500-800+ unique/day
- 80% sales in Denmark, 20% in Sweden/Norway
- Smothe logistik and supplier setup
- Great potential for expansion

I have been selling companies before, and it has always been something like 5 years of income or 1 year of sales - but in this case that is hard, as the company is quite young. On one hand you could say that the potential is so great that that would be too little, on the other hand one could say that 5-6 months is too short time to make projections, and hence the risk would be very high etc...

Any input would be highly appriciated.

Thanks for your time.

:)

annual profits x 2-15 = valuation, the number depending on risk, growth rate, etc.

5 is usually a safe number.

thanks for your answer. You dont mean devided by 15 or 5?

for example if your comapny produced $60,000 in EBITDA last year then your company might roughly be worth $300,000 if you were going to sell it to someone.

ok, thanks - thats how i wrote in my post above as well. Earnings x 5.
My problem is that i do not have one year of business - take a look at the post again pls :)

tnx for your input

Well, the best thing you can do is work out how much your yearly profit would be based on the monthly profit. Growth might mean the end result is higher, but since you've only been in business for half a year, there's not a lot that can be done.

Also, you do profit * 5, not revenue :)

Eming,

Would you please detail how you had setup your business online with no inventory and manufacturer (in a different country) sending product over to another country? If you could step me through as I am planning to have a similar setup but am not clear on how to setup online. I am not a developer so start with how to develop such a site and go from there to include what software, hardware, hosting, security, payments, shipping, delivery, taxes, markup on prices, profit margin, etc.

Thx.

nu-ecom -
How to build site, hardware, hosting, security, payment etc etc is a little to much to explain in a single post here at WHT - thats more like a book or two worth of know-how :)

The part about doing it with no inventory is quite simple:
Its all about getting the right relationsship with the supplier. Most supplier require that you do 20' containers as minimum order. And we did that the first 3-4 months. However, lately we have made an arrangement witht them that we place orders for a min. amount of $, and then they will send it out as bulk cargo.
When buying 20-40' containers payment terms are usually T/T with 30% upfront and 70% after presentation of Bill of Landing.
In our case we pay everything up front, as we have good experiences with our supplier, and we know they are trustworthy.

Next step is to find the right logistics partner, that can handle everything from the warehouse at the supplier to the product is at the end-clients doorstep. Most logisitic partners will do that, if you can show them an ongoing stream of orders.

I hope that answers a bit of your questions :)

eming,

Thanks for your reply.

When I asked the question on "How to build site, hardware, hosting, security, payment etc.", I was asking a general question for any business model similar to yours and steps to consider when choosing a host. Will the hosting site already provide these and what to look for when choosing a reliable one? Is there a list of things to look for in terms of what kind of hardware, software, security, etc. is what I need to have at a hosting site?

Starting a relationship with a supplier in a different country is something I am struggling with as there are things involved as trust, reliability, security, support, commitment, responsibility, etc. Is there a site/source where you can find suppliers in another country who meet international standards?

You mentioned the logistics partner, again, is there a site that lists such partners who meet international standards? How to find out if the suppliers and partners are not blacklisted? What kinds of arrangements need to be in made when the supplier ships overseas to customers?

Again, I am new to this and appreciate your help in stepping me through the how-tos.

i think 5x cash flow is very rich for a small site relying mostly on search traffic - go to bizbuysell and look at the prices other sites are going for - 3x is more like it