This is one of the worst listings on Flippa. There's no information at all. No breakdown of traffic over time or by source. Nothing about how the transition to a new owner will be handled. No information about how billing is done and what information, if any, will be transferred to the new owner -- if everyone had to re-subscribe under new ownership most of that revenue is going to disappear. No information about the site architecture and what kind of resources are required to run it. No information about the customer service load generated.
It's like listing a house for sale with no photos, no description, and a fence around the property so you can't go check it out in person either. Just a lot number and a price tag. And we really are talking about the price of a house here...
Has 37s indicated how the billings will transfer? If by default, after the sale, users have to opt-in and provide their billing information again, there will be a substantial loss of customers, well beyond typical churn.
Additionally, if I were interested in purchasing Sortfolio, I'd want a clear picture of their customer acquisition practices. If most customers are being acquired through the 37s website and/or branding, you cannot count on continued revenue streams. If customers are being acquired by channels that don't rely on 37s, I'd be much more comfortable with it.
I must be missing something because I don't understand why they are so desperate to get rid of it. If it's really making $200,000+ per year just hire someone for 1/4 to 1/3 that to handle it.
Hiring and managing a person is not a zero-cost effort, even after you account for direct compensation costs. If you value giving employees great jobs, and a chance to do excellent work, then hiring someone on a different continent and not letting them contact you is not aligned with your values. Further, management bandwidth is one of the most expensive resources at any company, and spending it on a non-core product is not smart.
Focus matters. It's one reason why most successful businesses aren't do-everything conglomerates.
After the handover (which would be needed for a sale as well) there is no need to ever talk again. Just put the guy on auto-pay and have the contract automatically terminate when the revenue falls below a defined threshold (i.e. the site has fizzled out) or when the SLA is not met. Not rocket science really, should take all of 15 minutes to write a shell-script to send out the notification when it happens.
Of course if you pick the wrong person you might have to do it again, but I'd hope 37s would be able to gauge the competency of a candidate for that role. It doesn't take a genius to keep a trivial rails-site running, and motivation shouldn't be an issue with that kind of compensation.
But sure, if throwing away $100k/year in passive income better "aligns with your values" then you have bigger problems anyway...
Yeah, or let someone in-house make it their pet project. Tied with the 37s name/links etc and that revenue, what a great side project for someone to run...
A friend of mine with lots of experience angel investing and running profitable B2B companies told me he looked at Sortfolio last Fall and passed. He didn't go into detail, but he said they're asking too much.
It's like listing a house for sale with no photos, no description, and a fence around the property so you can't go check it out in person either. Just a lot number and a price tag. And we really are talking about the price of a house here...