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  1. #1
    Join Date
    January 17th, 2005
    Just out of curiosity, what would you value a well established private affiliate network if it was to be purchased out right? The stats are...

    2,000 affiliates
    A dozen super affiliates - Some capable of sending several hundred sales a month
    Complete automated management software
    3 years old
    Well managed

    If you had to put a realistic price tag on it, what would you estimate?


  2. #2
    ABW Ambassador kaizen's Avatar
    Join Date
    January 18th, 2005
    It's really hard to say without knowing sales in dollar figures and margins, and I know that I wouldn't be throwing those figures about.
    We did not change as we grew older; we just became more clearly ourselves.
    ~Lynn Hall

  3. #3
    ABW Ambassador
    Join Date
    January 17th, 2005
    Considering your point that it is "well managed", I'd say upwards of $58 million.

  4. #4
    Join Date
    January 17th, 2005
    Orlando, FL
    If I were buying an affiliate network, I would look at a few things.

    Of the 2000 affiliates, how many are actively picking up campaigns. Is it email based or banner based.

    What is the stability of the merchants that are a part of the network. Are the deals exclusive?

    The biggest problem with networks is that they are somewhat able to be replicated. That is why there are 20 billion of them right now. The reality is of course that the hard work and relationships that built your network are not easy to come by and even harder to maintain.

    Having a rolodex of 2000 affiliates is great, but if I were to make one mistake, they would drop me in a heart beat and then I have exactly what I started with before I gave you the $10 billion.

    That being said, 2000 affiliates is a gold mine if they are performing for you and a company with the connections to build the merchant base would love to build their rolodex with those names.

    Hence the art of the negotiation. But the figure will be somewhat based upon a percentage of annual net income as that is really what the accounting types will look at.

    So if you did $20 million in revenue and of that you netted $2 million in profits, a CFO type would say the worth of the company is between $1.5 and 5 million depending upon the company's risk tolerance. A marketing guy with a book of merchants that needs an instant affiliate base might put a premium on top of that as well.

    Just my thoughts.
    Chris Mayr
    When amassed, even dust can become a mountain.

    There is a finite amount of intelligence but an infinite amount of stupidity in the universe

  5. #5
    ABW Ambassador
    Join Date
    January 17th, 2005
    $58 million??? Give me a break.

    If you're thinking in terms of buying or selling one, I suggest you use some recognized financial tools such as determining what the profit of the network is and doing a multiplier of perhaps 15. That would get you in the ballpark.


  6. #6
    ABW Ambassador JJJay's Avatar
    Join Date
    January 17th, 2005
    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by bob95603:
    $58 million??? Give me a break. <HR></BLOCKQUOTE>
    I think he was being sarcastic. The price mentioned was what CJ sold for!

  7. #7
    Moderator MichaelColey's Avatar
    Join Date
    January 18th, 2005
    Mansfield, TX
    I think CJ probably has/had about 1000 times as many affiliates. That would put the value at about $58,000.

    Seriously, though, if there's enough infrastructure and development in place, it could easily be worth $50,000 or $100,000. Perhaps more to the right buyer.
    Michael Coley
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  8. #8
    ABW Ambassador
    Join Date
    January 18th, 2005
    Nunya, Business
    "How much is an affiliate network worth?"

    As much as someone is willing to pay for it

  9. #9
    Kung Fu Master Eathan's Avatar
    Join Date
    January 18th, 2005
    Holy crap! *Slips off to list Rolodex on ebay*

    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

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