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Sell My App: How to Sell an App for a Profitable Exit

To sell an app, value it on the last 12 months of net profit, prepare a clean month-by-month profit and loss statement, and list it with buyers who have proven their funds. If you are asking “how do I sell my app?”, Empire Flippers has sold 2,600+ online businesses worth $600M+, charges no listing fees, and handles vetting, negotiation and migration for apps earning at least $24,000 a year in net profit.

Sell your Business Free Valuation

Before we get into how to sell an app and the best ways to maximize an exit, we should clarify what we mean by an app. Some of the most popular forms of apps include:

• iOS app
• Android app
• Shopify app
• WordPress plugin
• Salesforce app
• Facebook app

This is just a taste of the main platforms, and we’ve sold apps from all of them on our marketplace. You might be worried that your app is too niche, and there won’t be buyers out there; however, this is not the case. If your app is profitable, then buyers will be interested in it. Our sale of a Salesforce app for $73,326 in just four days exemplifies that point.

If you own a profitable app, you may be wondering how much it’s worth and how to sell it. Selling an app involves more than finding a buyer. You’ll need to prepare your financials, demonstrate the strength of your user base, and make sure the business is ready for due diligence.

In this guide, we explain what makes an app sellable, where to sell it, how app valuations work, how to prepare for due diligence, and what the sale and transfer look like step by step.

What Makes an App Sellable?

Buyers pay for proven earnings, not ideas. To list with Empire Flippers, your app needs at least $24,000 a year in net profit and at least 12 months of earnings history. Beyond those minimums, buyers look at four things: real profit, a real audience, stability and how hard your app is to copy.

Real Profit

The fact of the matter is that most apps won’t reach unicorn status. Unless there’s good evidence that you’re the next Uber, you’ll need to prepare your business for sale in a slightly different way.

Buyers on the open market don’t care about your idea; they care about how much money it’s generating. In order to list, you’ll need to get your financials in order and create a profit and loss (P&L) statement.

A P&L statement should include a month-by-month breakdown of revenue, operating costs, expenses, and net profit.

Reviewing the P&L of a business is usually the first part of a buyer’s due diligence process. A bad month or two isn’t going to put potential buyers off, but misreporting the numbers, whether intentionally or accidentally, will lose a buyer’s trust.

This is why we recommend that you hire a bookkeeper to take a look at your numbers before deciding to sell. At Empire Flippers, our vetting team will work to compile the P&L on your behalf.

Real Audience

Buyers will also want to find out more about your user base. Having an enormous amount of downloads isn’t as important to them as seeing that you have a large user base that has committed money to your app in some way.

Building up a share of the market is one of the most difficult parts of establishing any business. And this is a big part of why buyers are looking to purchase assets that have already earned a captive target audience. If you have a large number of active users, that will put you in a better position when it comes to selling.

Stability

Due to the competitive nature of the app market, stability is a quality that’s thought very highly of. Buyers like to see that your app is here for the long term.

That’s why stability is often better than being in a phase of hypergrowth. It can be difficult to judge where the growth is going to level out, so you’re effectively asking someone to buy based on potential rather than established data. Buyers understand that the trajectory of your business can dip back down just as easily as it jumped up.

When you decide to list, you’ll want to refrain from selling in the middle of any major updates. The product that’s listed should be the same product that the buyer receives. You should still maintain the app with minor updates, though, including any necessary updates released by the platform. Apple, for instance, updates their devices fairly regularly, so you’ll need to make sure the app is optimized for the latest iPhone, iPad, and Mac updates, where applicable.

How Deep is Your Moat?

This question contains a metaphor that refers to how easily your app can be copied. If you have little that makes you stand out, then this is going to make you less valuable to a buyer.

This doesn’t mean that you have to have a completely novel idea that no one has ever thought of. Instead, you should have unique selling points that differentiate you from your competitors, and that will make it difficult for your rivals to take you down.

This could be a slightly different set of features or a more streamlined design, whatever makes you stand out is likely the reason users are choosing your app over anyone else’s.

If you have time before selling, consider setting up a feedback option so users can let you know what they like about your software and what else they would like to see implemented. You may not have time to put the ideas into production, but you will have plenty of actionable feedback to supply the buyer with. There might even be some quick wins in there, which buyers are always on the lookout for.

Where to Sell an App: Big Tech, Private Sale or Broker

You have three routes: approach a large tech company, sell privately, or sell through a broker that brings verified buyers to you. Most profitable apps are bought by entrepreneurs and investors on the open market, so that is where the realistic offers come from.

Selling to a Big Tech Company

The idea of selling to the likes of Google is a dream for many app owners, and it’s easy to see why. High-profile acquisitions of apps like Instagram and several others have made a big splash in the news.

While selling your app to a major technology company may sound appealing, most app owners are more likely to find a buyer through the broader market for online businesses. Buyers may be entrepreneurs, investors, or existing business owners looking for a profitable app they can acquire and grow. These high-net-worth individuals are looking to purchase turnkey businesses that allow them to skip the building stage.

Some buyers will be looking for apps that they can “fix up” and try to double the monthly net profit, while others want a highly successful app that can be run with very little hands-on work. This is why you should forget about selling apps to the big players and focus your attention on preparing your app business to sell on the open market.

Selling Your App Privately

In a private sale, you facilitate the deal yourself, and this has both pros and cons.

By doing a private sale, you avoid paying commission to a broker.

You will have to source a buyer yourself, which can be difficult, especially if you don’t have many connections in the industry. You could reach out to your competitors to see if they are interested, but be wary of them gathering information for their own benefit.

It can be time-intensive to deal with buyers and respond to their questions. So if you choose to go the private sale route, you’ll need to carve out some extra time in your schedule.

Selling Through a Full-Service Broker

Empire Flippers is a full-service brokerage, meaning we offer you assistance all the way through the sales process. We’ll tell you exactly what we offer, so you can compare our service with what other brokers provide. Just as it’s important for buyers to do their due diligence on your business, it’s important for you to do the same for a broker. Here is what you need to know:

• There are no listing fees. You pay commission only when your app sells: $10,000 for sales up to $70,000, and from 15% down to 2.5% on larger sales (see fees and timing below).
• You will have access to our extensive contact list of buyers, in a buyer network valued at over $16.1 billion. Access to this market generates competition to acquire the business, which can help drive the price up.
• Every buyer on our marketplace has to verify their identity and provide proof of funds before they are permitted to view sensitive information about your business.
• As a full-service broker, our vetting team will build your P&L, our sales team will act as an intermediary between buyer and seller to maximize your exit, and our dedicated migrations team will transfer your business over to the new business owner.

How App Valuations Work

The standard formula for valuing an online business, including an application, is:

It should be pretty easy to work out your average annual net profit once you have created a P&L. Your app needs at least 12 months of earnings history to list with us.

Pricing Windows

The first part of this formula is what’s known as a pricing window. The number of months used depends on the trajectory your business is on.

12-Month Pricing Window

This is the gold standard when it comes to pricing your business and will allow your app to receive the highest suitable multiple. A 12-month pricing window gives buyers more historical data and can account for seasonal fluctuations. Your app needs at least 12 months of earnings before you can list it with us.

6-Month Pricing Window

When a business is in a period of high growth or decline, a 12-month pricing window isn’t really applicable. This is because the first six months of the window don’t accurately represent how the business is currently doing, so the pricing window can be shortened to better reflect the new reality.

Doing so might give you a higher average net profit, but it will result in a lower multiple due to the uncertainty regarding where the business will level out. There are many different influencing factors, so there will typically be a smaller pool of buyers interested in businesses using this window.

3-Month Pricing Window

A window this short almost never gets used, as it will result in the worst possible multiple. There simply isn’t enough data for buyers to accurately judge the state of your business, so there will be barely any interest from them. It’s usually better to wait until a larger pricing window can be used.

While your business is on the market, the valuation will be updated on a monthly basis. If you use a window that is less than 12 months, it will be extended month by month until you get to 12 months or until the business is sold. Where possible, we recommend that you aim for a 12-month pricing window, as it means your app business will appeal to the widest pool of buyers and investors.

What Factors Affect an App Valuation Multiple?

There are many factors in addition to the pricing window that are considered when determining the multiple at which your business is valued. The following are some of the main factors that affect your multiple.

Traffic Diversity

Traffic diversity can have a significant impact on an app’s valuation. Buyers generally prefer businesses that aren’t dependent on a single source of new users.

Diversifying the channels that bring users to your app has a positive effect on your business. It means that you aren’t reliant on one channel, so if anything were to happen to one of the channels, it wouldn’t completely dry up the stream of new users finding your app.

There are a few different traffic channels that can be used for an app:

• Paid advertising (Google ads, Facebook ads, app store ads)
• Organic app store search
• Through your website (search engine optimization)
• Social media

Combining a few of these channels to diversify your traffic puts your app in the best possible position. It becomes more difficult for competitors to outdo you if you have several effective marketing strategies.

Like many software-based models, there is a churn rate associated with apps; most people aren’t going to be lifetime customers. You can offset this factor by consistently bringing in new users to your app. This is why apps with diversified traffic channels receive a better multiple.

Revenue Diversity

Revenue is another important factor in determining the multiple your app will receive.

Many apps follow the freemium model where the initial download is free, but users are then encouraged to pay for additional features through cross-sells, up-sells, and in-app purchases. Using a selection of these methods to offer value to users is the best way to make money from an app. Recurring revenue can make an app more attractive to buyers because it provides greater visibility into future revenue.

In-app purchases tend to work well in the gaming niche, where they allow users to level up quicker. On some marketplaces, such as the iOS store, it’s possible to promote these purchases, and they can rank as search results on their own. This increases the discoverability of your mobile app and brings in more revenue.

Display advertising is another common monetization method for apps, as it can be added relatively easily.

Finding a balance between making your app as profitable as possible and avoiding negatively affecting the user experience requires testing. Buyers will dig into the reviews of your app to see what the consensus is on how things are being run. People won’t hold back if they think you’re promoting too vigorously.

Age

An app’s age can also affect its valuation. A longer operating history gives buyers more data to evaluate the business and can demonstrate that the app has maintained demand over time.

An app that has been around longer and has maintained its place in the market is more appealing to buyers. It’s proof that you have a model that works and a user base that appreciates your product. This kind of loyalty is impossible to manufacture overnight, and an older business will nearly always get a better multiple because of it.

What Current App Listings Are Priced At

The fastest way to sanity-check a multiple is to look at live deals. These app listings were on our marketplace at the time of this update:

See every live deal in our app businesses for sale category.

Take a few minutes to use our free valuation tool and see what your app is worth. It has been built using sales data from 2,600+ online businesses and is constantly updated to reflect the current state of the market.

Preparing Your App for Due Diligence

Reviewing your P&L is usually the first step of a buyer’s due diligence, and buyer due diligence typically runs about 14 days. Have these records ready before you list:

• Profit and loss statement: a month-by-month breakdown of revenue, operating costs, expenses and net profit for at least the last 12 months. Our vetting team builds the final P&L with you.
• Revenue proof: screenshots of gross and net monthly revenue and verified monthly expenses.
• Analytics access: read-only Google Analytics access (Clicky is also accepted) for verified buyers.
• Subscription metrics: if your app charges subscriptions, state whether revenue is MRR or ARR and track churn, customer acquisition cost (CAC) and lifetime value (LTV) over time.
• Operations: documented SOPs and a list of the developers and contractors who keep the app running.
• Payment processors: if you rely on PayPal, consider moving away from it before you sell, because it can make the transfer harder.

For listings over $100K, you can also record a seller interview so buyers hear how the app runs directly from you.

The App Sale Process and Transfer Steps

Selling an app through Empire Flippers follows five steps:

1. Submit your app. Answer a few questions about it through our sell your business form.
2. Vetting and approval. Our team reviews the app, may ask for more information, and builds your P&L. Apps with two or more signs of manipulation, such as penalties, deleted accounts or short-term earnings, are rejected.
3. Listing to verified buyers. Your app goes live on the marketplace and in our weekly email to buyers. Buyers only see your app’s name and URL after they provide proof of funds.
4. Offers and negotiation. We screen out unserious inquiries, help you negotiate and structure the deal, and the sale is documented in an asset purchase agreement that defines exactly what is included.
5. Payment and migration. After the buyer pays, our migrations team transfers the app and its monetization to the new owner, with buyer and seller copied on one support ticket. Seller payment usually follows within three to eight weeks of the sale.

Fees, Timing and Deal Structures

Listing your app is free. Commission is charged only when the app sells, and migration is included at no extra cost.

Estimate your exact fee with our commission calculator.

• Exclusivity: listings run on a 2-month exclusivity period.
• Due diligence: buyers typically complete due diligence in about 14 days.
• Payment: from sale to seller payment, expect three to eight weeks on average.
• Deal structure: most smaller apps sell for a single upfront payment. On larger deals, usually above $100K, a buyer may offer a higher total price with part of it paid as an earn-out over the following months.

How to Negotiate When Selling Your App

Negotiations should be a collaboration, not a showdown. The aim is to arrive at a deal that is mutually beneficial for the buyer and the seller.

It isn’t necessary to use any underhanded sales tactics to gain an advantage, but there are a few things that you should have planned out before you enter negotiations.

Explain Your App’s Value

One marketing skill you can use is copywriting.

Find out the problem the buyer is motivated to address, and position your app as the solution. Maybe your app has a set of features that means a buyer doesn’t have to build something from scratch. Be prepared to walk buyers through how your software works; many buyers on the open market won’t have technical know-how regarding app development.

If you can’t explain your basic business model to potential buyers, they’re not going to be interested. Write it down and consider whether it looks appealing to someone with no knowledge of your business.

Minimum Price Threshold

Determine the minimum price you would be happy to walk away with. After all, a difference of a few thousand dollars between your valuation and the sale price is not likely to be worth losing a deal over.

Still, you also don’t want to get trampled in the heat of the moment. That’s why setting a minimum price threshold is a good practice. It prepares you to get a price that you’re happy with and makes it less likely that you’ll lose out on a deal because you were fixated on a particular valuation.

The Give and Take

During negotiations, it’s common to experience something we call give and take.

This occurs mostly with larger deals, above $100K, as smaller deals tend to go through quicker with less of a back-and-forth between buyer and seller. For larger deals, if you want a higher price point, you might need to accept an earn-out. This means that you’ll get a lower price upfront, but will receive payouts over subsequent months until the agreed-upon figure is reached.

However, if you want more money upfront, then you may need to accept a lower sales price. This is why there is a give and take; there needs to be some room to negotiate depending on the kind of deal you’re comfortable with.

Common Mistakes App Sellers Make

• Pricing on downloads instead of profit. Buyers value an app on its trailing 12-month net profit, so a large user base with thin profit will not get a high price.
• Listing with messy books. Missing months or owner expenses mixed into business costs slow down vetting and lower buyer trust. Clean up your P&L first.
• Chasing only the big players. Waiting for an offer from a large tech company can cost you a year while open-market buyers are ready now.
• Sharing details with unverified buyers. In a private sale, some buyers gather information for their own benefit. Share sensitive data only after you have checked who you are dealing with.
• Leaving the app dependent on you. Without SOPs and handover notes, buyers see more risk and offer less.
• Short-term earnings spikes. Manipulated or one-off earnings are spotted in vetting and can get the listing rejected.

How to Sell an App: Frequently Asked Questions

How do I sell an app I made?

Get it valued, prepare a month-by-month P&L and analytics access, then sell it privately or through a broker. With Empire Flippers, you submit your app, our vetting team reviews it and builds your P&L, we list it to verified buyers and help you negotiate, and our migrations team transfers the app to the buyer after payment.

How much can I sell an app for?

Most profitable apps sell for their last 12 months of average net profit times a multiple, typically 1.7x to 5x+. An app earning $100,000 a year in net profit would usually be priced between $170,000 and $500,000 or more, depending on its age, growth, traffic and revenue diversity. Our free valuation tool gives you an estimate in a minute or two.

What is the best website to sell an app?

For a profitable app, the best place is a curated marketplace that vets every listing and verifies every buyer. Empire Flippers lists apps with at least $24,000 a year in net profit and 12 months of history, hides business names and URLs until buyers provide proof of funds, and has sold 2,600+ online businesses. Browse current app businesses for sale to see what sells.

Can I sell an app without revenue?

Not through Empire Flippers. We list apps with at least $24,000 a year in net profit and at least 12 months of earnings history, because buyers price apps on profit. An app with users but no profit can still be sold privately, but buyers have much less to evaluate, so offers are lower and harder to find.

What records do app buyers want to see?

Buyers want a month-by-month profit and loss statement and read-only analytics access first. Subscription apps should also show whether revenue is MRR or ARR, plus churn, CAC and LTV over time. Screenshots of gross and net revenue, verified expenses and documented SOPs make due diligence faster.

How do app transfers work after the sale?

After the buyer pays, our migrations team moves the app to the new owner at no extra cost to the seller. We open one support ticket with buyer and seller copied and transfer the assets listed in the asset purchase agreement, such as the code, intellectual property and monetization accounts. Read more about our APA process.

How much does it cost to sell an app with a broker?

At Empire Flippers, listing is free and you pay commission only when your app sells. Commission is $10,000 for sales up to $70,000, 15% from $70,000 to $700,000, 8% on the amount from $700,000 to $5 million, and 2.5% on the amount above $5 million. Estimate yours with the commission calculator.

How long does it take to sell an app?

It depends on price and buyer demand, but the steps are predictable. Listings run on a 2-month exclusivity period, buyer due diligence typically takes about 14 days, and seller payment usually follows within three to eight weeks of the sale. Apps under $100K tend to sell faster than larger ones.

Can I sell an app without a broker?

Yes. You can sell privately and avoid commission, but you have to find buyers, check their funds, answer their questions, handle the contract and manage the transfer yourself. A broker does that work for you; at Empire Flippers that includes a buyer network valued at over $16.1 billion. See our seller FAQ for details.

What makes an app valuable to buyers?

Consistent profit is the biggest factor, followed by a loyal user base, stable earnings and a product that is hard to copy. Diverse traffic sources and revenue streams and a longer track record push the multiple higher, while dependence on one channel or on the owner pushes it lower.

Can I sell a SaaS product or other software the same way?

Yes. SaaS products, mobile apps, plugins and other software sell through the same process, with extra focus on MRR or ARR, churn and customer metrics. See our guide to selling a SaaS business.

Next Step: Get a Valuation or Talk to Our Team

Creating a profitable app is no mean feat, and buyers will pay for one. Start with a free valuation to see what your app could sell for, then submit it for vetting. There are no listing fees and no obligation to sell.

Want to talk it through first? Book a 30-minute call with one of our business analysts. If you are weighing the timing, read how to sell a tech company, and for software with subscriptions, see our guide to selling a SaaS business.

Sell your Business Free Valuation