Jul 28, 2022
In General Discussions
If you’re considering selling your website, you need to know how much your website’s worth. While there are many website value calculators out there, most of them are inaccurate at best. Website value calculators base their numbers purely on traffic and domain rating. To give you an idea of how inaccurate that is, a website that I’m in the process of selling for $500K was valued by one of these calculators at $14K. Yikes! Don’t worry—I’m going to teach you how to actually make an accurate analysis of how much your website could sell for. How are online businesses valued? If you have a website that doesn’t get any traffic or make any money, it’s probably not worth anything. But it may have value if you have a high-value domain name—but that’s an entirely different article. If you do get traffic and/or have an income, that makes your website an online business. And there are a few different ways that websites (and online businesses) can be valued. The value of your website comes down to three things: The income you generate (and where that income comes from) Your website’s traffic (and the quality of that traffic) Additional added value (e.g., backlink profile, social media audience, or email list) Let’s quickly break down each of these and how they affect your potential sale price. Income multiple The most common (and highest-paying) method of valuing a website is a direct multiple of your business’s net profit. Net profit is how much your business takes home after expenses. At the time of this post, a typical website sells for between 30 times and 45 times of the monthly net profit. So if you earn $10K per month net profit, your website can likely sell for $300K to $450K. Where your site falls in that range can depend on a lot of other factors, such as: If you have multiple income streams – Websites that only have a single income stream (such as Google AdSense or Amazon Affiliates) sell for less than whatsapp number list websites with multiple income streams (e.g., a mix of ads, affiliates, and physical or digital products). How reliant you are on paid advertising – If your income relies on a complex structure of paid advertising that isn’t easy for a non-expert to run, that can lower the sale price. If you have standard operating procedures (SOPs) – An SOP is a document that details exactly how to do tasks within your business, such as how you write, edit, and publish an article or how you build links. They make it easier for the new owner to take over, which could raise the sale price. We will calculate your net profit (including subtracting add-backs, which I’ll explain) in the first step of the valuation. For now, let’s look at other ways to value your website and increase your monthly multiple. Website traffic The second-most-common way of valuing a website is by determining how much traffic the website gets. This is what most of those “online website worth” calculators use, and it’s kind of rubbish. As I said in the intro, the website that I’m negotiating $500K for was valued at a meager $14K by those traffic value calculators. Ahrefs estimates the monthly organic traffic value to be worth almost 10X that (at $130K) if we were to pay for it via search ads. So those calculators are poor judges of value.