SaaS platforms tend to be the platinum level assets when it comes to selling a digital business on Flippa. On average, they are able to sell for a 2.7x annual profit multiple and we’ve seen them go all the way up to 4.8x when the stars align. The reason for this is that business owners love to see recurring revenue. Rather than a user being worth a single purchase or a couple of ad clicks, each user pays a recurring subscription to use the service and as long as that service is good, they’ll keep on paying month after month.
This particular Software as a Service platform works to automate Instagram posts for businesses looking to make their social media planning a bit easier. The starting price for the listing was $20,000 and the “buy it now” option was set to $25,000. And that is exactly what it sold for.
All it took was one happy bidder to click that button, but leading up to that were 2,425 views, 57 watchers, and 11 discussion threads, some that were pages and pages long.
The real interesting success to this business is the valuation. Below is a screen capture of the listing and it tells one quick story, but the reason that this listing was so successful was the seller’s ability to communicate with all of the interested parties effectively.
It’s important, as a seller, to realize that the listing only tells one part of your story. Sure, you might highlight everything that you think is important, but what what’s truly important is what the buyer thinks is important.
This seller took great detail in answering important questions, like one user who flat out asked “Why has your revenue gone down every month since launching? What are the routine monthly expenses of the business?” These sorts of questions comes around all of the time and it’s important to be honest. Buyers are always looking for situations that they can take improve upon, so give them the full scoop! Below is the seller’s detailed response.
Feb 2019 was the launch of a deal we had running – It was heavily dependent on affiliate marketing, Since then we’ve had no deals or major ad-spend put towards a campaign or growth tactics as the deal had brought in a large amount of Traffic, yearly users and promotional pricing users.
The costs associated would be the basics of any SaaS, Mainly being the following : Hosting, Domains, Email, Support,CRM & Developer time.
Hosting is currently being covered with google credit – We’ve had this since July and there is around $11,000 worth of credit remaining on the account, Domains are per year, Email is all done via Zoho Free Tier, Support is done by myself but a VA could be hired, We’ve recently signed up with Intercom Pro, This will also be provided for a year.
The only other cost is Proxies – These will depend on the amount of Users & Accounts on the system.
For Promotional Pricing users there is a small Monthly cost – There is room to up-sell to these users.
Recurring Monthly Clients the price involves cost of proxies but this depends on the plan, There’s quite a few factors to consider – if you’re interested I can follow up via direct message.
Candid conversations like the one above along with a few other tidbits that came out in the discussions with potential buyers of this listing lead to a successful sale at $25,000 – the buy it now price that the seller had posted.
If you’re looking for other tips on how to sell on Flippa, be sure to check out our First Time Sellers Guide, it has a lot of tips and tricks, even if this isn’t your first time selling.