February 21, 2017 Last updated February 14th, 2017 1,370 Reads share

How Much Is Your Website Really Worth?

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It’s your first time website flipping. While you’re excited at the prospect, your mind is fraught with confusion, anxiety and, most of all, cluelessness. It’s been a long time coming, but now you’re ready to take your business to the next level. There’s really nothing to fear; you’ve already learned how to establish a website from nothing, so selling one should be a walk in the park.

To begin, let’s discuss the worthlessness of online website value estimators. You’ve probably already prowled the Internet for tools that have done nothing but confuse you with wildly inaccurate quotes within a stupidly broad range of valuations. Unfortunately, whatever these tools claim, there is no mathematical formula or secret code that can accurately predict another website’s true value. Most of these tools not only plug data directly from Alexa.com, but are used as a marketing platform for other products. Never take them as gospel.

They say that mathematics is the only universal language; that’s certainly true in the world of website flipping. When determining the value of your website, statistics are paramount. To truly maximize your profits and get the most accurate listing price possible, you must analyze your stats with close scrutiny. It may be time consuming, but solid research is the only way forward.

The Million Dollar Question

A website is an asset like any other. Just like houses, their value will rise and fall depending on the state of the market. Cashing out will leave you with a single large sum, but no more digital real estate. Leaving the earnings to flow in each month seems logical in the long run, but there’s always the risk of an irreversible earnings dip. So, should you even sell your website? That’s the million dollar question – be sure to get in touch when you’ve figured it out!

Fundamentally, it all comes down to potential. If you truly believe that your website has reached its maximum value, best hold on to it. Website flippers are pros, and future growth is without question the most important factor of a sale. It’s the growth that’ll bag you the majority of your asking price. If you can’t demonstrate the potential for expansion buyers will likely pass, or at the very least, try to negotiate a much lower price.

Weighing Up Facts, Figures and Financial Gains

Your website is worth whatever someone is willing to pay for it – a statement echoed throughout the Internet. But what you need is a ballpark figure. Most websites will sell for 18-30x their monthly value. However, this can significantly vary depending on who you ask. For example, Wired Investors recommend valuing your site at 50x its monthly value. While the latter is certainly more attractive, sticking to the former is probably more realistic. Unfortunately, what this proves is that simple mathematics doesn’t always cut the mustard. Various other factors can affect the sale price, such as your website’s traffic sources, niche and earning consistency.

But … you want a straightforward answer. For the most accurate prediction, compare your statistics with previous site purchases. Flippa.com and EmpireFlippers.com is a great place to start. Facts and figures to consider include: revenue stream(s), traffic source(s), domain age and page rank value. Find a recently sold website in a similar niche, with similar performance statistics and roughly the same monthly revenue, and then you’ll find your ballpark – note the word ballpark!

Design, Content and Trends

Website design is often overshadowed by the financials, yet it stills holds a great deal of weight. If a website contains 10 extremely well written original pieces of content that genuinely help readers, it’s probably going to have a higher value than a site rammed with spun PLR articles. The phrase “content is king” couldn’t be more relevant. The same philosophy goes for graphics and layout. Are they original or are they duplicated? If you roughly know how much your design and content is worth, you have your absolute minimum figure.

Don’t forget about fads and trends in the market. For example, a tennis blog running Amazon affiliate ads is likely to generate more revenue during the buildup to Wimbledon; therefore, selling it when potential buyers are relishing all-things-tennis could yield a greater return. Timing can make or break a sale if your business is seasonal.

Website Flipping for Profit and Expansion

Let’s imagine you have a website that ticks all the website flipping boxes and brings in a steady stream of income each month. Hat’s off to you, you’ve done the hard part; but are you satisfied? Expansion is the heart of entrepreneurship, and flipping websites can fast-track your enterprise by providing a cash injection to fund other projects. Learning how to sell websites is just the beginning. When you’ve done it once there’s nothing to say you can’t repeat the process over and over again.

Just remember, the Internet moves fast and the rules that apply today may not be relevant tomorrow. As the clock keeps on ticking, so does the complexity of Google’s algorithm. The sandbox is a very real phenomenon with timelines that keep on expanding. It takes at least four to six months for a website to find its natural rank in the SERPs. That’s the absolute minimum time you’ll need to create something of value; therefore, to truly make a viable business out of flipping websites you need to run your operation in a factory-like manner, constantly buying and developing the parts, while selling off your most complete commodities.

Holding On for Digital Domination

When you sell a successful website you’re not only losing a financial asset, but also a brand. Is connecting with influencers an important part of your business model? If so, selling a website might not be the most viable long-term option. With an authoritative website you are associated with a go-to resource. Lose that and you could lose all of your credentials.

Relationship development plays a big part in business, and in today’s digital world a website is the primary gateway of communication when connecting with influencers. Therefore, when you sell a website you may lose access to cross promotional opportunities. If you help others, they’ll help you; but if you don’t have a relevant online presence, what do you have to offer? Depending on your business model, holding on to your website could yield greater returns for your future online endeavors, such as product launches and outreach.

Preparing to Sell a Website

So, let’s say that after much deliberation you’ve made the decision to sell… You’re probably already spending the money in your head, visualizing just how great life is going to be in just a few short weeks: holidays in the Bahamas, a new 4K flat screen, courtside tickets… but wait! Take a step back and calm yourself. What about your business plan? Yes, you need a business plan to sell a website, just as you did (or should have had) when you initially started building it.

Compile your raw statistics. Although buyers want to know that there’s room for expansion, they don’t want graph after graph of estimations and predictions. Anyone can make an educated guess, but an experienced website buyer will probably be more of a skeptic than an optimist if you don’t have the hard facts to back it up.

  • Compile your traffic statistics – This report should include your unique visitors, page views, growth rates, demographics, traffic sources and popular keywords.
  • Break down your financials – This report should contain a profit and loss statement and detailed bookkeeping recordings. Everything from the cost of the domain to the monthly hosting costs should have a formal record.
  • Write a top quality sales page/email – This is your pitch. It must introduce your website, cover its history and future potential, and explain why you’re selling such an amazing asset.

Make everything clear, concise and presentable. Leave as little room for bargaining as possible. Buyers will look for problems with your projections, make assumptions about your website’s past performance, and even target minor design flaws – any excuse to get a better deal.

Do not publish your reserve price on your sales page! Modesty is the bane of website flipping. It’s not uncommon for offers to far exceed estimations. You’ve already made the first move with your sales pitch, so now it’s their turn. That said, if a potential buyer asks you for a quote or wants to know your “ballpark” figure, set your asking price slightly higher than what you hope to achieve – between five and ten percent – in order to leave yourself a little wiggle room.

Make a Post-Sale Plan Immediately!

You’ve made the sale, your pockets are filled and you’re overwhelmed with happiness. But don’t let it get to your head. It’s easier to spend money than it is to make money. You’ve learned that the hard way. You’ve built something from nothing. Now it’s time to rinse and repeat the process, make and learn from new mistakes, and experiment with fresh ideas. Celebrate by all means, but don’t forget about the early days when you had nothing. You now have the capital and knowhow to make something grand: invest wisely.

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Adam Manuel

Adam Manuel

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