thinking of buying an ebay store.. how do I know it's value

[trish38]

Hi fellow ebayers, I am currently looking at buying an ebay store in australia. I have had several discussions with the current owner of the store who also has a separate website to compliment the sales. My problem is that I feel that it may be over priced. Unfortunately I have just laid out 600.00 to a business broker who initially told me that they were familiar with online stores and ebay only for them to come back to me to say they had no real formula to work out how much the business is worth. If there is anyone out there who feels that hey may be able to help please respond. thanks in advance

[MM78]

Are you buying this ebay store with merchandise?
does it include PayPal?
How are you going to deal with Taxes? (not sure about AU tax situation)
Are your items different than the items the previous owner sold?
What are the limits on the account?
How old is the account?

[yankee]

why is the account seller willing to sell?

Does inventory and supply come along with said account?

[trish38]

Originally Posted by MM78

Are you buying this ebay store with merchandise?
does it include PayPal?
How are you going to deal with Taxes? (not sure about AU tax situation)
Are your items different than the items the previous owner sold?
What are the limits on the account?
How old is the account?

yes the ebay store comes with about 35.000 stock and manufactures willing to be ongoing suppliers
yes it does include paypal
all items are the same and opportunity for me to add lines
not sure what you mean by limits on the account
the account dates back to about 2006

[trish38]

Originally Posted by yankee

why is the account seller willing to sell?

Does inventory and supply come along with said account?

selling due to retirement (seems very legitimate)
yes inventory and suppliers (manufacturers) available to me

[MM78]

Originally Posted by trish38

not sure what you mean by limits on the account

Limits as in, "Selling Limits Per Month" How many items can you sell a month?

[trish38]

Originally Posted by MM78

Limits as in, "Selling Limits Per Month" How many items can you sell a month?

print out of ebay sales show from June to Sept 2000 transactions at a total of 115.000 USD.

[wtfebay]

Originally Posted by trish38

print out of ebay sales show from June to Sept 2000 transactions at a total of 115.000 USD.

That is how much they have sold during those 3 months....what he was asking is what is the LIMIT PER MONTH that you are allowed. Ebay has a monthly item and dollar limit that you can list per month. Such as 1000 items or 25,000 dollars PER MONTH, etc.

[james13v]

Originally Posted by wtfebay

That is how much they have sold during those 3 months....what he was asking is what is the LIMIT PER MONTH that you are allowed. Ebay has a monthly item and dollar limit that you can list per month. Such as 1000 items or 25,000 dollars PER MONTH, etc.

Does it really matter at this point? If the guy is selling 40k a month, I think we can safely say that he has a very high limit..

If you have the type of money to buy a business like this, I don't understand how you can't calculate the value of it?

You have an inventory value.

You have sales estimates.

You have supplier costs.

You have overhead numbers.

It's about how much the business is worth TO YOU.

[Othmane]

Do you have an Idea how you going to deal with changing names on eBay & PayPal, If not planning to do so, What about Tax!?

[trish38]

i will be buying the registered business name and running it as a business and paying tax.

[trish38]

Originally Posted by james13v

Does it really matter at this point? If the guy is selling 40k a month, I think we can safely say that he has a very high limit..

If you have the type of money to buy a business like this, I don't understand how you can't calculate the value of it?

You have an inventory value.

You have sales estimates.

You have supplier costs.

You have overhead numbers.

It's about how much the business is worth TO YOU.

I guess this is why I posted here in the first place. I have no idea of how much the business is worth. the business broker who I paid 600.00 said yes it is a good viable business but that it was perhaps overpriced. they had nothing to compare it to. asking price is 135.000 plus stock 36.000 I have tried researching other similar businesses for sale but can not find anything to compare it with, which is what the broker had trouble with. apparently no such thing as good will associated with online sales?

[james13v]

Originally Posted by trish38

I guess this is why I posted here in the first place. I have no idea of how much the business is worth. the business broker who I paid 600.00 said yes it is a good viable business but that it was perhaps overpriced. they had nothing to compare it to. asking price is 135.000 plus stock 36.000 I have tried researching other similar businesses for sale but can not find anything to compare it with, which is what the broker had trouble with. apparently no such thing as good will associated with online sales?

Nope, not really such a thing. It's about the value to you.

What's the profit margins. How long will it take you to earn back the 135 based on the average sales.

[NewOldStockBoy]

I've bought and sold several corps. in the U.S. The answer to your question has been given to you (it's worth what it's worth to you), but I don't know if you understand how to place a value on that. You're going to be looking at around 185,00 in purchase costs, lawyers, etc. It adds up fast and if you don't allot a good amount for the sundries, your plan is at a disadvantage from the start. If you have a cost of goods of the inventory, that's a great place to start.

If he's doing 40K a month in sales, figure out the profit margin or better yet, look at his books. If he's not willing to show you the books, big red flag. You'll need to be sure his business doesn't have any debt, loans, liens and get some kind of no tax due form from every taxing agency that would have jurisdiction. This kind of due diligence is mandatory in any sale, but it's up to you to request these things. When drawing up the contract, you'll need to make sure your attorney puts terms for dealing with any outstanding bills and make sure any lawsuits stemming from actions before the date of purchase falls directly on him.

So all of this happens and everything is cool. You know what the profit is per year. You know what your other costs are. Now you need to do the fun math. How long are you willing to work for 'free' in order to pay yourself back for the investment you made. These deals can also be worked with a lower up-front cost if you are willing to pay him a percentage monthly. The advantage is that for the period of time you are still paying him he has a vested interest in your success. If an issue comes up with a supplier, for example, he might be able to use his years of experience with them to smooth things over.

Hope it helps.

[colie72]

Have I read this right...? are you saying that a manufacturer wants to sell you his online busines...which sells what he makes? so you are held into a niche that he can raise the price on the minute the ebay is sold...plus he can start another right away....


DO NOT BUY A BUSINESS WHERE THE ONLY THING BEING SOLD IS MANUFACTURED BY THE PEOPLE SELLING THE BUSINESS TO YOU!!!!

Am i the only one seeing this?

[NewOldStockBoy]

colie72, I don't see what you see exactly, but I do see what you mean and it's a darn fine point. Since she's discussing ongoing suppliers I don't think that's what the situation is. If it is, then I'm with you. I'll gladly sell you anything I can make again in a minute for nothing. A non-compete in the contract can go miles to mitigate that problem. Make sure it also includes consulting in the same field so he can't set up his buddy/son/cat to compete with you. Know that the contracts are only as good as the word of the person signing it, but it is enforceable in court. I don't know the legal process in AU, so there's a bit more learning for you to do and figure a guesstimate if you need to go that direction.

[NewOldStockBoy]

I should have said buddy/son/koala. I missed out.

[colie72]

trish could be potentially buying a cash cow for the people she 'thinks' are selling a business. an eBay account is not a business..it is a potential income..nothing is certain and this is the least certain business prospect i've seen (considering the money involved)..

[colie72]

Originally Posted by NewOldStockBoy

I should have said buddy/son/koala. I missed out.

or 'mate' lol

[NewOldStockBoy]

Originally Posted by colie72

or 'mate' lol

I would have gone with dingo but I think it might be a derogatory term & am too lazy to google it.

[joesshooze]

Originally Posted by colie72

Have I read this right...? are you saying that a manufacturer wants to sell you his online busines...which sells what he makes? so you are held into a niche that he can raise the price on the minute the ebay is sold...plus he can start another right away....


DO NOT BUY A BUSINESS WHERE THE ONLY THING BEING SOLD IS MANUFACTURED BY THE PEOPLE SELLING THE BUSINESS TO YOU!!!!

Am i the only one seeing this?

I am not a negative person but you better believe this! You are going to be taking an enormous risk if you decide to do this and should you decide to the only other thing I can offet to help you is to hire somebody with a lot of eBay selling experience to help you other wise you just tripled an already hi risk venture and I would not do it with your money if that says anything. Best of luck.

[newjerseymax]

Pretty sure accounts are non-transferable, I wouldn't want to own a business where my primary income is held together by trying to avoid a policy that can get you banned. Sure you can make more stealth accounts, but then your loosing everything your paying for in first place.

Your broker has no comparison because this sort of thing is not normally done on the books.