At some point, most webmasters are interested in selling at least one of their websites. Whether it is to free up time or to raise money for another project, there is the appeal to unload one of their web properties at a good price.
However, how much should you expect for your website? Around the Internet, there is a lot of talk about revenue multiples. While revenue is certainly a factor in your website’s evaluation (as well as a realistic multiple), it is only one of several important factors.
Here are five of the most important factors for your website’s evaluation. As you can see, based on these factors, some websites that make $200 a month could sell for well over $6,000, whereas others most likely won’t fetch many bids at all (and the ones it does would be far lower).
Quality of Website
Everyone thinks they have a quality website, but to be frank, some websites are much, much better than others. Does your website do something unique and well that few others do, or is your website nothing more than rehashing other people’s work with an abundance of copyright and other problems with it? Quality websites will find buyers that will shell out a good price whereas poor websites will generally only find bottom dweller buyers looking for a quick buck.
Earnings matter. Most of the time, the buyer wants to be assured he can make a reasonable return on his investment. One of the easier ways to judge is to just see how much money the current owner makes. Before selling, monetize your website well, though do not go overboard with ads and make it visually unappealing. Be sure to be able to show your website can in fact make money.
Traffic and earnings are not the same. Generally you need traffic to get earnings, but some websites make a significant amount of money with little traffic. This is generally because either they are in a really high CPM niche or they make money through link sales. Either way, sites that have a lot of traffic and earn their money through a lot of traffic are safer and sell for more money than sites that are reliant on link sales as well as a high CPM rate for their advertisements.
The older a site and the more stable a site, the more the site is worth. By having an older site that is somewhat stable, the buyer can be assured that the site is less risky. Also, if a site has been around for a while and is quite popular, it is also a sign that the site is of good quality.
Many websites advertise that their only expenses are domain renewal and hosting. Most of the time, this is not true. Websites generally need some updating. Blogs, in particular, require a lot of writing by the website owner.
Some websites require more maintenance work than others. Buyers understand this and will price accordingly. When selling your website, be honest about the amount of maintenance involved. Saying ‘no work required’ is a red flag that will turn off many quality buyers.
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- Five Factors That Affect Your Website’s Evaluation - June 23, 2012