There are several reasons why you might be interested in discovering what your website is worth, and it can be challenging to know where to begin.
You may be getting tired of maintaining your website after putting in a lot of time and effort while wondering what the end goal is. If you don’t want to completely abandon everything you’ve worked so hard for, selling your website could be the solution.
And, while the actual value of a website is determined by what someone is willing to pay for it, you can certainly get a sense of how much money you should be able to earn if you sell your site.
This guide will walk you through the process of learning the value of your website by analyzing the following:
- What Is the Value of a Website?
- What Factors Affect the Value of a Website?
- How to Increase the Value of Your Website?
- The Ultimate Guide to Selling Your Website
Content
- Should you sell your website?
- How much is a website worth?
- What affects a website’s value?
- Net profit & net margins
- Traffic source splits (organic vs paid)
- Transferability
- The marketplace
- Monetization methods
- Future competition
- 7 Valuation calculators for websites (and how to use them)
- What is a website value calculator, and how do I use it?
- How to make your website more valuable
- Increase the number of traffic sources
- Social profiles & secure domain variations
- Establish a strong brand and reputation
- Purchase a premium / brandable domain name
- Use a variety of monetization methods
- 3 Mistakes to avoid when selling your website
- Obsessing over meaningless statistics
- Not being prepared to make a sales pitch
- Not improving your website before selling it
- The best ways to sell your website
- Summary
Should you sell your website?
There are various legitimate reasons to sell your website:
1. There’s no room for more growth
You may believe that your website has reached its revenue and traffic potential. If you can’t see yourself getting any more value from your website — or if you’re unwilling to make the necessary effort — it’s probably time to move on.
2. You’ve become unhappy with managing a website.
You may be dissatisfied with your current site or frustrated with how much time and resources it consumes. A website that made you passionate ten years ago may be irrelevant now. It is often preferable to move on than cling to a past that won’t do you any good.
3. You’re interested in diversifying in other ventures.
Even if your website is extremely profitable, you may be tempted to cash out to pursue other more profitable opportunities. It can be extremely satisfying to apply your experience and success to a new project.
But whatever the reason, if you decide to sell your website, you must first determine its value.
How much is a website worth?
Earnings Multiplier
As a rough estimate, the value of a website is between 24 and 36 times your monthly revenue: a figure we call the earnings multiplier.
That means that if your website generates $5,000 in monthly revenue, you can anticipate selling it for between $120,000 and $180,000.
Of course, this does not consider your net profit, the time required, the structure and setup of the business, or the breakdown of traffic sources, among other factors. But you can get a sense of how much your website might be worth.
For instance, a website that receives the majority of its traffic organically rather than through paid advertising will almost always have a higher valuation due to the costs associated with customer acquisition.
Let’s review the factors that influence a website’s value and how you can positively impact how much it might be worth.
What affects a website’s value?
Roughly speaking, a website’s price typically falls between the market value, the seller’s ideal value, and the price someone is ready to pay.
Several factors affect a website’s value. Learning them will help you understand your asset’s prospects and prepare a good pitch for your potential buyer.
Net profit & net margins
A website’s net profit is a significant factor in determining its value.
Most buyers are often concerned with net margins, which is
Net Profit / Revenue = Net Margins
Relying on revenue alone can be deceptive, which is why we often use net profit and margins as factors in a fair valuation.
Consider the following.
You may generate sizable revenues, but if the costs of generating that revenue are high, the actual earnings remaining after expenses will be low.
Additionally, websites are often purchased as an investment. The buyer must understand that there is an opportunity to profit.
So the greater your net profit, the more valuable your website is.
Margins vary by sector, but as a general rule, you can anticipate a typical affiliate-based website to have net margins as high as 80%.
Traffic source splits (organic vs paid)
This is where your website’s valuation becomes more complicated — the impact of a website’s traffic source split is more closely related to net margins than you might believe.
For example, a website that receives most of its traffic organically due to a successful SEO strategy will have lower expenses and higher net margins than one that relies heavily on paid advertising.
Both buyer and seller must understand how traffic sources affect the overall value of the website.
Use Google Analytics OR Semrush statistics to get a complete picture.
Transferability
How easy would it be to transfer your business to new owners if you sold your website tomorrow? This is a genuine concern website owners often overlook. The easier the transfer, the higher the sale price.
Or, to put it another way, you may discover that your website is worthless if the transfer is quite impossible.
Consider the following:
- Will it be easy for a new owner to assume control of any existing vendor contracts?
- Are all systems in place easily transferable, even if this means a new team will take over day-to-day management of the website?
- Is your website built on an open-source content management system (CMS) that a new team can easily build on, or is it built on a custom platform that would be difficult and costly to migrate away from or support in the future?
- Are customers “buying into” the business (the brand) or the owner and their ways?
While many factors are at play, keep in mind that the easier it is to transfer the website to new owners, the higher the asking price. Disruption is costly and doing everything possible to avoid it is preferable.
The market
What are your website’s future market opportunities? Have you reached the site’s maximum growth potential, or are there still opportunities for revenue and expansion?
Again, a website with room for improvement will be valued higher than one fully realized its potential.
Monetization methods
How you monetize your website can have an impact on its final value.
Because unexpected changes can occur, relying on a single method can be risky. On April 14, Amazon slashed affiliate commission rates, leading to significant revenue losses for many who rely on them for a substantial portion of their revenue.
A website with multiple revenue streams is less risky to invest in and can often fetch a higher asking price.
Future competition
You may be asked to sign a non-compete agreement to increase the value of your website. This contract between you and the buyer prevents you from starting a new business or website that competes directly with the one you just sold. It shields the buyer from competing with someone who knows everything there is to know about their new purchase.
Of course, these are rarely set in stone and are always subject to negotiation: keep in mind that you must be willing to enter into such an agreement to get your website’s maximum value.
7 Valuation calculators for websites (and how to use them)
Various website appraisal tools are available, ranging from spreadsheet calculators to dedicated tools, and some require more information than others. So expect some inconsistency in the results.
To get a good idea of the value of your website, use a few different calculators, but keep in mind that any number is only a guide. If you decide to sell, a genuine buyer may offer you more or less.
What is a website value calculator, and how do I use it?
Website value calculators work the same: they ask you to enter specific details about your site to calculate a rough estimate.
Here are a few website value calculators to help you figure out how much your website is worth:
Worth of Web
You can find a valuation for any website simply by entering the URL into Worth of Web. It generates an instant report without asking for your personal information. This is an excellent tool for estimating the value of your competitors’ websites and comparing it to yours.
Flippa
Flippa claims to provide you with “the most accurate market valuation available in minutes.” Its 6-step procedure is simple and takes only a few minutes to generate a report.
Before accessing the report, you must first enter your name, email address, and phone number.
Empire Flippers
The top curated marketplace for trading established online businesses. You can get a valuation by filling out the simple step-by-step form with your company’s information.
FitSmallBusiness
Assess your website’s worth with the FitSmallBusiness website value calculator. It generates two valuations based on your income and the multiplier for your industry, giving you a rough idea of how much your business is worth.
This calculator does take your website into account, so it’s best to use it with one of the website appraisal tools listed below.
GoDaddy
GoDaddy calculates the worth of each domain name based on millions of previous domain name sales. It uses machine learning and years of real market sales data to create a solid starting price for sales, trades, or negotiations.
While this does not account for the value of the business or the website, it gives you a good idea of how much your domain alone could bring in if you want to sell it.
SiteWorthTraffic
SiteWorthTraffic is a free tool that uses the URL to estimate the value and overall performance. Again, this tool does not consider the website and its business practices, but its inclusion of ad-based revenue is a good indicator.
Siteprice.org
Another free domain appraisal tool is Siteprice.org, which allows you to see a website’s estimated value and performance by simply entering the URL.
How to make your website more valuable
The big question you’re probably asking is how to increase the value of your website before selling it. Below are some helpful tips.
1. Increase the number of traffic sources
Diversifying your traffic sources should be a priority as you build your website’s value.
When you can show that a significant portion of new customer acquisition comes from organic rather than paid sources, you can demand a higher sale price, owing to the lower reliance on paid traffic.
On the other hand, organic traffic is not immune to algorithm updates, so it’s also important to focus on various traffic sources rather than a single one.
Develop a strong social media presence and an email list while implementing a solid organic and paid search strategy.
2. Social profiles & secure domain variations
Your website will be worth more when you own several domain variations and all of the major social profiles associated with that domain.
Even if your website has a viable revenue and traffic source, it’s disappointing when a potential buyer discovers that someone else owns the.com version of your.us or.co domain.
It’s all about creating the impression of a complete package and ensuring you can provide a complete ‘brand’ — this helps to raise the perceived value.
3. Establish a strong brand and reputation
Are you looking to sell a brand or just a website? You’ll be able to charge a higher price for your website once you’ve established a brand and a good reputation.
For example, at NerdWallet.com, the owners have clearly invested time and effort in developing a brand. It’s not just another affiliate site that you’ll forget about as soon as you see it.
They’ve combined great content with excellent UX to provide real value to users, which many companies overlook.
You’ll be in a much better position to boost the sale price if you can show that you built a brand, not just an online business.
4. Purchase a premium / brandable domain name
All other factors being equal, a.com will almost always command a higher sale price than a.net,.co, or any other generic TLD.
We’re all used to the most popular websites using domain names that we recognize, which for the most part means a.com.
Your domain should be brandable, which means it should not be a long-tail exact match keyword. To return to NerdWallet.com, the branding and short name are both effective. Consider what would happen if that same site was BestRewardCreditCard.com.
We’re pretty sure we know which domain you’d give a higher priority.
5. Use a variety of monetization methods
When you have multiple monetization streams connected to your site, you lower the risk for the buyer, which often allows you to raise the asking price.
When you can diversify your revenue streams through affiliate revenue, Adsterra, eCommerce sales, or other means, you should. It also reduces your risk of losing money while growing the site’s revenue.
3 Mistakes to avoid when selling your website
There are three common mistakes to avoid before selling your website.
1. Obsessing over meaningless statistics
Adding impressive statistics to your listing is an excellent way to attract potential buyers. However, avoid including vanity metrics that don’t have much meaning in terms of business performance.
Be open and honest, and only provide accurate statistics, even if they aren’t very impressive. Concentrate your listing on your company’s strengths, accomplishments, and most enticing data. Don’t hide the flaws, but make the positives stand out even more.
2. Not being prepared to make a sales pitch
You may have heard that making money quickly by creating a website dedicated to the latest craze or trending topic is a good idea. People frequently buy a domain to quickly put up a few pages and then sell it while the topic is still relevant.
That’s a great idea, but there’s a catch. You have to sell both the new website and its potential.
If you have a small site created recently, which generates income steadily, this does not mean that your potential buyer will repeat your success.
The lifetime of the site is essential when buying. People are afraid of buying one-day websites. So if your website is still new, it is better to prepare a pitch on how your site will keep generating revenue in the future.
3. Not improving your website before selling it
Putting in a lot of work on something you want to sell may seem counterintuitive, but it always helps you negotiate a better price, just like renovating a home before selling it.
From SEO to monetization tactics and lead capture strategies, optimize everything you can on your website. Unoptimized websites can be a good deal for buyers because they can buy an unoptimized site for a lower price and put in the effort to increase profits with a little effort. Make sure you’re getting the most out of your website’s potential.
The best ways to sell your website
Prepare yourself
Before even thinking about starting discussions about a sale, make sure you have all the information a potential buyer would want to see. Allow Analytics access, or at the very least send reports, as well as proof of earnings.
Make the most of your connections
You don’t have to sell your website on the open market all of the time. It’s not uncommon for competitors or those in related industries to express an interest. Reach out to people in your network, have a private conversation about the sale, and engage with those you think might be interested.
Be receptive
The more responsive you are, the more likely you are to close the deal. Make yourself available throughout the process by promptly responding to queries and questions.
Decide on a target sale price
Always know what price you’re willing to accept on the low end of the spectrum.
The Best Ways to Buy a Website
If you’re the one making the purchase, here are some pointers to help you make a wise decision:
Look into the history
The more you know about a website’s history, the safer your purchase will be. Make sure to hire a professional to examine the domain’s past organic and SEO performance, looking for any historical penalties or algorithmic changes. You should approach the purchase with the mindset that you can never know too much about the product’s past.
Interact with the group
If team members who work on the website daily will be present during the sale, make sure to meet with them before making a purchase. The chemistry of a team is crucial to its success, and you must be confident in your ability to collaborate to continue to grow.
Analyze Your Link-Building Strategies
You don’t want to buy a website that has been using black hat SEO tactics only to find out three months later that an algorithm update has harmed the site. If you don’t feel comfortable conducting a full link audit yourself, hire a professional to do it for you. Raise any concerns with the site owner; for example, you might discover some of the identified links are old and placed in a disavow file.
Summary
Purchasing or selling a website is a thrilling experience. Either you’re about to make a tidy profit from the sale, or you’re about to add a new digital asset to your portfolio.
It’s crucial to know how to assess your website’s worth so you can start those conversations and the sales process. You can get close to determining a fair price by digging deep into financial and marketing performance.
