There are many reasons you might be interested to find out how much your website is worth. It can be difficult to know where to start.
After putting in so much effort and time, you may feel tired of maintaining your website. Selling your website is a good option if you don’t want everything to go.
While the true value of a website depends on what someone will pay for it, you can get an idea of what you might be able to make if you decide to sell your website.
How do I use a website value calculator?
Website value calculators function in the same way: you will need to provide specific information about your site in order to get a rough estimate.
Flippa
Flippa claims it can provide you with the “most accurate market valuation available within minutes.” The 6-step process is easy and takes just a few minutes.
You must first enter your name and email address before you can access the report.
Is it possible to sell your website?
There are many legitimate reasons to sell your site:
1. There is no room for growth
Your website may be viewed as having reached its potential for traffic and revenue. It’s possible to believe that your website has reached its revenue and traffic potential. If this is the case, it’s time to move on.
2. It’s becoming difficult to manage a website.
Your current website may not be what you want or how it uses your time and resources. It may not be relevant today if you have a website that was passionate 10 years ago. It’s better to move on rather than to hold onto a past that doesn’t serve you well.
3. You are interested in diversifying into other ventures.
Even if your website is highly profitable, it’s possible to be tempted by other lucrative opportunities to cash out. It can be very satisfying to use your success and experience to help a new project.
Whatever the reason, it doesn’t matter what, you have to first determine the value of your website before you sell it.
What is the value of a website?
Multiplier Earnings
The earnings multiplier is a rough estimate of the website’s value. It can be between 24 and 36 times your monthly revenues.
This means that you can expect to sell your website for $120,000 to $180,000 if it generates $5,000 monthly revenue.
This does not include your net profit, time required, business structure, traffic sources or how they are structured. However, you can get an idea of the potential value of your website.
A website that gets most of its traffic organically, rather than through paid advertisements, will almost always be valued higher due to the associated costs with customer acquisition.
Let’s look at the factors that affect a website’s worth and how we can positively influence its value.
What factors affect a website’s worth?
A website’s cost is usually equal to its market value, the seller’s ideal value, or the price that someone is willing to pay.
Website value is affected by many factors. These factors will allow you to understand the prospects of your asset and help you prepare a pitch for potential buyers.
Net profit and net margins
Website’s net profit plays a major role in determining its worth.
Net margins are a concern for most buyers.
Net Profit / Revenue = net Margins
It can be misleading to rely on revenue alone. This is why we often consider net profit and margins when valuing a company.
Take a look at the following.
Although you may be able to generate large revenues, if your costs for generating those revenue are high, your actual earnings after expenses will be very low.
Websites are also often bought as investments. It is important that the buyer understands that they have the opportunity to make a profit.
Your website will be more valuable if you have a higher net profit.
Although margins vary from sector to sector, it is common for affiliate-based websites to have net margins of as high as 80%.
Splitting traffic sources (organic and paid)
This is where website valuation gets more complicated. The impact of website traffic source splits is more closely linked to net margins that you might think.
A website that gets most of its traffic organically through a well-executed SEO strategy will have lower costs and higher net margins than one which heavily relies on paid advertising.
Both the buyer and the seller need to understand how traffic sources impact the website’s overall value.
To get a complete picture, use Semrush statistics or Google Analytics.
Transferability
What would it take to sell your business and transfer it to new owners? Website owners overlook this real concern. The higher the sale price, the easier the transfer.
You may find that your website is worthless if it is not possible to transfer.
Take into account the following:
- Is it possible for a new owner of existing vendor contracts to take control?
- Can all the systems be easily transferred, even if it means that a new team will manage the website’s day-to-day operations?
- Are you using an open-source CMS (content management system) or a proprietary platform that is difficult to use or expensive to support?
- Customers “buy into” the brand (the business) or the owner and his ways?
There are many factors at play. However, it is important to remember that the more difficult it is to transfer the website, the higher the asking prices. It is better to avoid disruptions as they can be costly.
The market
Are there future market opportunities for your website? Are you at the site’s highest growth potential? Or are there still revenue and expansion opportunities?
A website that has room to improve will be more valuable than one that is fully realized.
Monetization methods
The final value of your website may depend on how you market it.
Relying on one method alone can prove risky because of unexpected changes. Amazon reduced affiliate commission rates on April 14th, leading to substantial revenue losses for many people who depend on them for a significant portion of their income.
Multi-income websites are less risky and often have a higher asking cost.
Future competition
To increase the website’s value, you may be asked for a non-compete agreement. The contract you sign with the buyer stops you from creating a competitor business or website to the one you have just sold. This contract protects the buyer against having to compete with someone who already knows everything about the new purchase.
These agreements are not always final and can be negotiated. To get the best value for your website, you need to be open to such an arrangement.
How to make your website more attractive
You are probably wondering how to increase your website’s value before you sell it. Here are some tips.
Increase traffic sources
As you increase your website’s value, diversifying your traffic sources should be your top priority.
If you can prove that organic customer acquisition is a larger percentage than paid traffic, you can ask for a higher sales price due to lower reliance on paid visitors.
However, organic traffic can be affected by algorithm updates so it is important to look at multiple traffic sources instead of just one.
Establish a strong social media presence, an email list, and implement a solid organic as well as paid search strategy.
Social profiles & secure domain variations
Multiple domain variations will increase the value of your website, as well as all of its social profiles.
It doesn’t matter if your website is generating revenue or traffic, it can be disappointing for potential buyers to discover that another person owns the.com version.
It is all about creating an impression of a complete package.
Create a strong brand image and reputation
Do you want to sell a company or a website? Once you have a reputation and established a brand, your website will be more expensive.
NerdWallet.com is an example of this. The owners clearly put in a lot of time and effort to build a brand. This is not another affiliate site you will forget about once you see it.
Their content is great and their UX is excellent. This provides real value for users that many companies don’t see.
If you can prove that you have built a brand and not just an online company, you will be better positioned to increase the sale price.
Buy a premium domain name that is brandable
A.com will almost always be sold at a higher price than a.net or a.co, regardless of other factors.
We all know the most popular websites that use domain names we recognize. This is most often a.com.
Your domain must be brandable. This means that it should not contain a long-tail keyword matching exactly. The branding and the short name can both be effective in bringing back NerdWallet.com. Consider what would happen if that same site was BestRewardCreditCard.com.
We are pretty certain we know which domain would be given a higher priority.
You can use a variety of monetization strategies
You can lower the risk of the buyer by having multiple revenue streams linked to your website. This often allows you raise the asking price.
You should diversify your revenue streams by using affiliate revenue, Adsterra and eCommerce sales. This reduces the risk of losing money and increases site revenue.
Avoid these mistakes when selling your website
Before you sell your website, there are three things to be aware of.
Obsessing about meaningless statistics
Potential buyers will be attracted to your listing by adding impressive statistics. Avoid vanity metrics that aren’t relevant to business performance.
Open and honest communication is key. Provide accurate statistics even if they don’t seem very impressive. Your listing should focus on the strengths and achievements of your company, as well as any other relevant data. You don’t have to hide your flaws. Instead, highlight the positives.
Unprepared to pitch a sale
It is possible to make quick money by building a website that focuses on the latest trending topic or craze. Many people buy domains to quickly set up pages, then sell them later while the topic is still relevant.
This is a great idea but there’s one catch. Both the website and its potential must be sold.
Even if you have a site that generates steady income, it does not necessarily mean your potential buyer will duplicate your success.
It is important to consider the site’s lifetime before buying. People don’t want to buy websites that are only a few days old. If your website is new, it’s better to present a pitch about how you plan to keep your site generating revenue.
Do not improve your website before you sell it
Although it may seem counterintuitive to put in so much work on a property you wish to sell, it will always help you get a better price.
Optimize your website using SEO, monetization strategies and lead capture strategies. Buyers can get a great deal on unoptimized sites by purchasing them at a lower price while putting in the effort to improve their profits. You want to get the best out of your website’s potential.
How to best sell your website
Get ready
Before you even consider selling, ensure that you have all of the information that a potential buyer might need. Allow Analytics access or send reports to at least prove earnings.
Take advantage of your connections
Your website doesn’t always have to be available for sale on the open market. It is not unusual for people in similar industries or competitors to show interest. Reach out to your network and have a private conversation with them about the sale. Engage with anyone you think might be interested.
Be open to receiving
You are more likely to close the deal if you are more responsive. Be available to answer any questions or queries throughout the process.
Set a price range for your target sale
Know what price you are willing to pay on the low end.
How to Buy a Website The Best Ways
Here are some tips to help you make an informed purchase if you are the one who made it.
Take a look at the history
You can make a safer purchase if you have more information about the history of a website. Hire a professional to review the domain’s history in SEO and organic search, to look for historical penalties or algorithmic modifications. The best way to approach the purchase is to remember that there are no guarantees about the product’s future.
Get to know the group.
Make sure you meet your team members before purchasing. It is vital that a team has a good chemistry. You must feel confident in your ability and willingness to work together to make it a success.
Analyze your Link-Building Strategies
It is not a good idea to purchase a website that has used black hat SEO tactics, only to discover three months later that the algorithm update caused damage. You don’t have the time or expertise to conduct a complete link audit yourself. You can raise concerns with site owners. For example, it might be discovered that some links have been removed from a file.
Summary
It’s a great experience to purchase or sell a website. Either you are about to make a good profit or add another digital asset to your portfolio.
Knowing how to evaluate the value of your website is crucial in order to start conversations and to sell. By looking at your marketing and financial performance, you can come close to determining the fair price.
