Are you thinking about selling your website? Wondering how much it’s worth? You’re going to need website valuation information from the start, so that you know how you’ll take it from there.
It could be that someone has made an offer. Or you want to sell, but don’t know how to price it. Well, that’s probably not the hard part. The hard part is getting the best deal that you possibly can, and walk away not feeling cheated. So why don’t we just head straight in and find out what your website is worth?
Calculating The Value Of A Website
Website valuation must always be done with the buyer in mind. Get the distinction here – it’s not how much you want to get, it’s how much the buyer is willing to pay.
The value of a site, in most cases, is calculated as a multiple of its monthly or annual earnings. This is 12-36 monthly earnings or 1-3 times yearly earnings. To be precise, work with profit, not revenue. Your profit is the amount you’re left with after deducting the expenses you’ve incurred from running the site. Let’s say you made a net profit of $70,000 in the last 12 months.
The value of your website will be between $70,000 and $210,000 (1 x 70,000 – 3 x 70,000). The amount the buyer wants to part with can be quite apart from what you’re willing to accept, but you should both fall within that range.
Other Website Valuation Methods
There are two other alternatives to the earnings multiple method, but these are less common. Let’s take a look:
1. Asset valuation
Sometimes, a website buyer may choose to ignore earnings as a pricing factor, and instead base the price on the value of the website’s assets. Assets include website traffic, subscriber list, strategic partnerships, stock inventory (for ecommerce sites), etc. As such, the buyer values these assets more than the amount of money the website is currently making, because these assets can be leveraged to get a higher ROI.
2. Comparable sales
As you might find out, similar sites – or sites in your niche – may have been sold before. The buyer and the seller will in this case use the sales data of these sites to determine how much your website should be worth.
How You Can Get Top Dollar For Your Website
We are all looking for that top-dollar deal, aren’t we? So how do you sell your website at the premium price you wish for, or even come close to that? The answer is a bit complicated: it’s hard, but will a little extra effort, you can even get more than what you bargained for. Here’s how:
1. Think long-term
Website flipping is a common practice today; tons of website are being created and tossed into the market straight away. The sellers all seem intent on making some quick cash, without really making any effort to grow the website into something worth buying.
My advice would be, think long-term, or at least focus on getting the website to generate some income first before pitching it to buyers. Potential doesn’t sell. Value sells, and that value can be seen both in the profits you are making and the amount of assets you hold.
2. Find more ways of monetizing
Growing revenue over a longer term will also involve you trying out more monetization methods to tap into the traffic you’re getting. Have you tried more ad placements? More affiliate programs? Or maybe, creating an e-book for sale? Can you offer some subscription service that will bring in more funds or improve customer loyalty?
Don’t just sit there and wait for people to land on your website, promote! The more you promote your website on search engines, social media, forums and every other place you could think of, the more traffic you’ll receive. And as we know, traffic matters.
4. Sell in the right places
Avoid general auction sites like eBay when it comes to selling your site. Focus on reaching a more targeted audience. Accessing a network of qualified website buyers through brokers or on website marketplaces can greatly enhance the chances of you getting the kind of client anyone would dream of.