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A product with $6000 in revenue selling for only $12,500 seems crazy to me. Why were you so eager to get rid of it?
by TimPC 1y ago
A product with $6000 in revenue selling for only $12,500 seems crazy to me. Why were you so eager to get rid of it?
- Arainach 1y agoRevenue isn't profit.
- fxtentacle 1y agoMost likely, they booked some advertisements to push revenue but didn't honestly account for the ad expenses. I've seen that way too many times with Indie products that they brag about large revenue numbers and "forget" to mention that profit margins are negative. I remember once hearing about a start-up that resold baby diapers at a loss. Obviously, they were easily able to scale up customers and revenue ...
- beAbU 1y agoIt's the whole "we're selling $1 bills for 50c, but we're not worried, we'll make up for it by scaling up."
- pinkmuffinere 1y agoImo the pithier version is “we lose money on every sale, but we’ll make it up on volume!”
- disgruntledphd2 1y agoIt's profoundly depressing that this is basically the model for almost all startups in the last twenty plus years. :shrug:
- fxtentacle 1y agofound it: "Critically, he did not understand margin. At the end of December when things were getting truly desperate, he said to me “Phil, just bring me a forecast that shows how much we need to sell to break even.” He did not understand, after three years of negative margin, that increased sales resulted in increased losses." from Ecomom Post Mortem by Philip Prentiss
- AndrewOMartin 1y ago"We lose money on every sale, but make it up on volume" > https://barrypopik.com/blog/we_lose_money_on_every_sale_but_make_it_up_on_volume https://barrypopik.com/blog/we_lose_money_on_every_sale_but_...
- deleted 1y ago[deleted]
- tonyedgecombe 1y agoI think such small businesses are really hard to sell. It may be the purchaser just wanted the domain.
- prawn 1y agoMight only take months for traffic/attention/fad to completely die off, or a rival to supplant it.