Red flag explained · Numbers that disagree
A margin above 90%: what is usually left out
Short answer: A profit margin above 90% usually means costs are missing: the owner's time, contractors, software, hosting or payment fees. Few online businesses run that lean. Ask for every recurring cost and what it would cost to replace the owner's time, then work out payback on the profit that is left.
When the checker raises it
Raised as medium severity when profit is more than 90% of revenue (profit above revenue raises a separate high-severity flag).
Why it matters
Even a simple content site pays for hosting, a theme, plugins and some writing. A SaaS pays for hosting, email delivery and payment fees. Margins above 90% are possible for very small, very old sites, but they are the exception.
The most common omission is the owner. If the seller spends ten hours a week and that time is not in the P&L, you either do the work or pay someone to.
How often we see it
In our October 2026 benchmark data, 12 of the 36 listings stated a margin above 90%. That data covers 36 listings priced $10k–150k from the WebsitesForSaleOnline public API, Empire Flippers excluded, using the figures each listing states.
A worked example
Composite example, not a real listing
Asking price: $36,000
Average monthly revenue: $1,550
Average monthly profit: $1,450
Business age: 4 years
Owner hours: 3 hours per week
Monetization: Amazon Associates and display ads
Traffic or revenue sources typed in: Organic search 82%, Direct 10%, Social 8%.
What the red-flag checker returns: payback of 24.8 months on average monthly profit, and this flag:
Medium Very high margin (94%)
Margins this high usually leave out the owner's time, contractors, tools or payment fees.
Ask: Can you list every recurring cost, and what it would cost to replace your own time?
The same example also raises: Depends on Amazon, Organic search is about 82% of traffic, No connected data source mentioned, Concentration not disclosed.
What to check
- Ask for a list of every recurring cost, with the monthly amount.
- Ask how many hours the seller works and what it would cost to replace that time.
- Re-run payback after costs with the true payback calculator.
Questions to send the seller
- Can you list every recurring cost, and what it would cost to replace your own time?
- Can you list every recurring cost, including hosting, tools, contractors, payment fees and software subscriptions?
- Does the P&L include any pay for your own time? If not, what would it cost to replace you?
- Do you buy any traffic or run paid ads, and is that spend in the P&L?
Related flags
Useful next
- True payback calculator
- Free red-flag checker: paste a listing and see which flags it raises.
Get the seller question checklists
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The checker is a set of plain rules, not an AI model, and its flags are prompts for questions, not verdicts. Composite examples are invented. Informational screening only, not investment, legal or tax advice.