Valuation guide · due diligence
How to verify a seller's revenue and profit claims
Every valuation of a small online business is a multiple of a number the seller gave you. If that number is wrong, the multiple is applied to the wrong base and no amount of care with comparables rescues it. This page is about checking the base: where a real earnings figure lives, how to see it without taking anyone's word for it, and how rarely the market publishes one in the first place.
How often a sold listing states a profit at all
Read live from the public /api/stats endpoint each time this page loads.
| Asset type | Sales we hold | With a usable profit multiple | Share | Median sold below 1× stated profit? |
|---|---|---|---|---|
| Loading live figures from /api/stats… | ||||
"Sales we hold" is every non-demo sale with a recorded price. "With a usable profit multiple" is the subset whose source published a profit figure we could divide the price by, within a 0–100× outlier guard. The last column is computed on the calculator's window — the most recent 200 sales of the type — and is only answered where at least five of those carry a profit figure.
Two things fall out of that table. First, a stated profit figure is far from universal: in every category a meaningful share of sales carry a price and no usable profit figure, and for domains that share is effectively all of them. Second, where profit is stated, the median buyer in several categories paid less than one year of it. A market that routinely pays under a year's claimed profit is a market that does not believe the claims — and the reason it does not is that almost none of them have been checked by anyone.
The principle: see the number where it is generated
A spreadsheet, a PDF profit-and-loss statement and a screenshot are all things the seller made. None of them is where revenue actually happens. Revenue happens in a payment processor, a marketplace seller account, an ad network, an affiliate program or an app store — systems the seller does not control and cannot easily edit. Verification means reading the figure there, live, rather than reading the seller's copy of it.
- Ask for a live screen-share, not a file. Have the seller log in to each revenue source while you watch, change the date range yourself, and scroll. An exported report or a screenshot proves only that someone could produce it.
- Where the platform offers it, ask for read-only access. Analytics and search-console properties can usually be shared with a viewer role without handing over the account. A seller who will not grant read-only access to something that costs them nothing to share is telling you something.
- Tie revenue to deposits. Money reported by a platform should arrive in a bank or payout account. Matching payout records against the platform's reported revenue, month by month, catches figures that exist only on a dashboard.
- Check the same twelve months everywhere. Traffic, revenue and payouts should cover the same period. A traffic graph from one year beside an earnings screenshot from another is two unrelated facts.
- Rebuild the costs yourself. Revenue is the easy half. Ask for every recurring charge — hosting, software subscriptions, contractors, ad spend, fees — and check them against card and bank statements. Profit is what is left after the costs the seller forgot to mention.
Where each kind of business keeps its real numbers
- E-commerce stores. The store platform's order history, the payment processor, and — the part most often left out — supplier invoices, shipping costs and returns. Gross sales without cost of goods is not profit.
- Content sites. The ad network and affiliate dashboards, which pay from their own records, plus the analytics and search-console properties for the traffic that earns it. See what a content site is worth for why durability of that traffic is most of the price.
- SaaS. The billing system's subscription list, not a monthly-recurring-revenue figure typed into a deck. Read the raw charge history for cancellations, failed payments and reversals, and count how many customers make up the revenue.
- Mobile apps. The app store developer consoles for sales and in-app purchases, and the ad mediation dashboard for ad revenue. These are platform-held records, which makes apps one of the easier categories to verify properly.
What to do when the numbers do not hold up
Verification rarely ends in a clean pass or fail. More often the revenue is roughly real and the profit is overstated — owner time unpaid, a cost left out, a strong month annualised. That is not necessarily a reason to walk away. It is a reason to re-base the price.
Recompute trailing-twelve-month profit from what you actually saw, then apply the same multiple the comparables support to that figure. The gap between your number and the seller's is the conversation, and it is a far stronger one than "I think it's too expensive," because it is arithmetic on evidence both sides have now looked at. The mechanics of turning that into an offer are in how to make an offer on an online business, and the adjustments that turn stated profit into a usable earnings figure are in seller's discretionary earnings.
- If revenue will not reconcile to payouts, stop. That is the one discrepancy re-basing cannot fix.
- If costs are missing, add them back and re-price on the lower profit.
- If the twelve months are really three months annualised, price the months you can see and treat the rest as unproven.
- If the seller will not show a source at all, value the business as though that revenue does not exist.
Pricing the verified number
Once you have a profit figure you have checked yourself, the calculator prices it against sold comparables of the same asset type and quotes the middle half of them, with the sample it used shown beside the result. It refuses to answer under five comparables rather than guess. The full report adds the comparable sales themselves, so you can see what the multiple was paid on.
Related: due diligence checklist for sub-$100k deals · what a profit multiple actually means · asking price vs sold price · all valuation guides