An online retail business, which is newly established, is generating a monthly revenue of $30. Despite its recent inception, it is important to note that the business currently operates with a profit margin of 0%, indicating that its expenses are equivalent to its income. This essentially means the business is breaking even, with no profit being made just yet. Consequently, given its financial standing, the business is valued at a 0x multiple. This valuation approach considers the current earnings, which in this case results in a nominal valuation due to the lack of profit generation. As a fledgling enterprise, there could be potential for growth and profitability in the future, but as it stands, the financial metrics suggest that it is in the very early stages of development with significant room for improvement in terms of revenue and profitability. This scenario is typical for newly launched businesses in the online retail sector, which often face initial challenges in establishing a profitable customer base and optimizing operations for better financial outcomes. Nonetheless, for those interested in entering the ecommerce space, this business presents an opportunity to start with a clean slate and potentially capitalize on untapped market opportunities, albeit with an understanding of the current financial limitations reflected in its earnings and valuation.
I have put some time and energy into this store. There are things going on automaticall...
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Buying Advice
Flippa’s platform is free for buyers. Here are our tips for first-time buyers:
Before making an offer
1. Look for verified sellers. Sellers should verify their email, phone, and government ID. When a seller has completed all verifications, we identify them with a checkmark like this:
2. Review financials. Financials are seller-provided inputs. Always ask for verified financials. Ask for a tax return or request access to their dashboard. if it’s an ecommerce store get a transaction report.
3. Review traffic. Sellers can grant you access to Google Analytics. Ask for read-only access to verify site traffic.
4. Schedule a call. Communication is key. The best way to find out more is to speak directly with the seller. For your protection, keep all communication within Flippa.
5. Make the offer on Flippa. We’re here to help. Flippa does not charge buyers and by making an offer on Flippa you’ll get access to our post-sales support team.
1. Agreements & Contracts.
Connect with a US-based lawyer or purchase asset-specific template legal documents via Flippa Legal.
2. Conduct Due Diligence.
You can conduct this yourself, or use our new official verification and assessment service. We provide a deep analysis, identify hidden risks, and independently assess the value of the business. Packages start at $1,000. Learn More