How much is my website worth? Is there any question that is asked more often online?
There are plenty of opportunities for making money online with websites. Whether creating an online store, long-form content blog, or affiliate website, there are many ways to monetize a website.
Many people create profitable websites. Many more people would like to skip the long hours of work and buy a profitable website already making money. The buying and selling of a website is actually a big revenue business.
How do you know what you should sell your website for? Should you sell for a big one-time pay-off or keep the site for smaller monthly payments over the long haul?
These aren't simple questions to answer. However, there are some good rules of thumb that can help you.
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- Should You Sell Your Website?
- How Much Is Your Website Worth?
- How Do You Determine the Value of a Website?
- How to Sell Your Website
- Motion Invest
- FE International
- Empire Flippers
- Importance of History
- When You're Ready to Sell
- In Conclusion
Should You Sell Your Website?
This is the first question to ask yourself in the process. You don't want to get excited by a number, sell a website you absolutely love, and then regret it later. Depending on the type of site, you might be able to put off a decision. Affiliate sites, for example, will keep earning you monthly income even if you take a break.
If you find you're still really excited about the future of the website, then keep it. If you get excited when working on it, then keep it. Many potential buyers for websites are more than willing to listen if you change your mind later.
There are a few things to look for if you don't find this work energy in your life.
Have You Hit a Wall?
If you find yourself trying all kinds of marketing, writing more and more content, but the needle doesn't move then maybe you haven't hit a wall – you may have hit a ceiling. Some niches just have limits. Maybe this is because of the niche itself, your skill level, or the amount of time it would take to compete with bigger names in the niche. Whatever the reason, hitting an earnings ceiling could be a good reason to sell.
This allows you to take the money for your past work, step away from the frustration of not seeing new results, and even invest in a new project.
Maybe there is a higher ceiling but you're bored or tired. If you're stuck in a rut with your current site, then that's another good reason to look at selling.
Finally, the price might be right. Depending on the website valuation you get and how that compares to the actual offer, you might just get an offer that is too good to refuse. In that situation you might realize it makes more sense to take the money. This could be for something later or just a cash out.
If the offer is well above what you would expect for monthly earnings, that alone can be reason enough.
How Much Is Your Website Worth?
I'll save you the “A website is worth what someone will pay for it.” That's one of those “Duh” not helpful responses. There aren't too many factors to look at when it comes to figuring out the value of what the worth of your website is.
There are several misconceptions that we also need to bust through to figure out the true value.
Your Website's Name
In very rare instances the name of your domain might add a touch of value. This is actually a fairly rare occurrence, though.
Anyone who has bought a domain on GoDaddy has probably looked at the “estimated value” domain valuator tool of domain names. Those tools are wrong. Plain and simple.
If every domain value was worth hundreds of dollars, then those names wouldn't have been available for years. They also wouldn't be on sale for $7 to $15 a year.
In some very rare instances where the URL name is also a high demand keyword there might be some added value but that's unusual. Sometimes a domain name without a website can be sold for a premium price. I've actually done this before as I was offered $300 for one I bought at the regular $14 a year price. There was a simple “Coming Soon” page up at the time.
This is possible. In these rare cases the domain value is almost always a really good name on a topic someone wants to build their own site about. It almost never figures into the question of what your website value is.
Generally, you should just assume the domain name isn't going to add any extra value.
Type of Website
The type of website does matter. As this great article on Empire Flippers helps to explain, the type of website matters on what type of multiplier is used (this was mentioned by guest Jaryd Kraus on the excellent Niche Pursuits podcast on buying websites).
Some buyers might be looking to add a dropshipping business site to their portfolio. Others might only be interested in passive income affiliate websites. The type of website can also adjust the multiplier that is used when figuring out a standard asking price.
Whether or not the website comes with an e-mail list can also sometimes matter. For actual business buying with a website, conversion percentage may matter as well.
How's Your Traffic Look?
What is your main traffic source? This is going to be a major question in the process. Website traffic numbers are going to be important. Same for where the traffic comes from. Most of the time organic traffic is mostly highly valued. This is because it requires high rankings in search engines like Google.
Social media traffic can be good in the right circumstances. Having website traffic from multiple sources is also a good thing since that means less dependence on any one company.
The most common traffic sources buyers will ask about include search engines, social media, email, or advertising. Traffic driven though advertising is not going to add value as that is an obvious attempt to boost the worth of a website.
This is a big one. Have you done SEO? What type? Have you gathered backlinks through guest posting or have you paid for SEO services?
These can be positives or red flags depending on what the client is looking for, how risky the tactics were, and if any “black hat” work was done.
A great backlink profile is definitely a selling point but how you got those links absolutely does matter.
If a search engine loves you now that's great, but buyers will be wary if that's likely to disappear at the next update. The more natural or white hat your techniques were, the more a business is going to like your site. This is because that means the search engines are far less likely to slap you down the rankings.
Quick Word on Content
While it's easy to see why many people think the amount of content will matter, you generally don't get to charge extra for all the writing time. While this can seem counter-intuitive to someone from a writing background, this actually does make sense. The content is what makes up the site, and the site is what brings in the earnings.
Since the majority of the bid is going to be based on the monthly earnings average, the value of the content is already figured in. Sorry to those with 1,000 blog posts hoping to squeeze out another $X a post in addition to the earnings formula. It's likely not going to happen.
All about the Earnings
Without question the single biggest factor in determining how much a website is worth to potential buyers are the revenue numbers. There is a general formula for this, which we'll go over in the next section. Though keep in mind it can vary slightly based on the buyer or broker.
While total revenue is a stat that will be looked at, it is the net profit that most are looking for to figure out a website value.
How Do You Determine the Value of a Website?
The general formula for figuring out the worth of a website is:
(Avg. monthly income) * (X number of months) = value of a website
The “X number of months” is usually between 24 and 36. That being said, the full generally accepted range is 20 months' average earnings on the low end all the way to 40 months' average earnings on the other side of the equation.
The monthly average income is normally based on adding together the profits from the last twelve months and then dividing by 12.
That number is considered the average monthly income for the site (note it's not based on revenue – it's based on profit after expenses). That way if the site is very seasonal (skiing, summer beach volleyball, etc) the average isn't thrown too low or too high. This is the fairest method to protect both parties.
In some places instead of 12 they might use 6, 10, or 24. The 12 seems to be the most standard but once again this can vary.
Once the average monthly income is figured out the only question is what multiplier the potential buyer is willing to use.
Getting Your Monthly Average
If you're trying to get a ballpark figure for yourself then use the last 12 months' earnings to figure out your monthly average income. Then multiply that by 30. This at least gives you a good estimated value of what your website is worth.
It's worth noting that some web brokers offer a free valuation of a website (FE International does this, for example) but the number might not be any more accurate than simply using the formula.
Can't I Just Use a Website Value Calculator?
The short answer is no.
While there are some good website value calculators out there, most are going to be off. Some of this is because a website might have a vested interest in inflating/deflating the value of your site before trying to sell you services. In other cases, the website value calculator takes into account things like Alexa Rank which almost never mean anything during an actual website purchase.
While these can be an okay tool for getting some ballpark figures, the formula for figuring out the valuation of a website is so commonly used there's no reason to go to another tool. Just plug in the right numbers and go from there.
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How to Sell Your Website
While there are cases of buyers sometimes contacting website owners directly (of course always do your due diligence if proceeding this way), the best and easiest way for most website owners is to go with a website broker.
These are individuals or sites that specialize in buying and selling websites. Each of the main options are going to be a bit different in how they do things. But all of them are in the business of measuring a website's worth and getting a website sold.
While there are many options out there, not all of them are created equal. There are four major options out there that really stand above and beyond the rest of the pack.
Full Disclosure: Spencer Haws is a co-founder of Motion Invest.
Motion Invest is the type of setup that most website owners looking to sell a smaller but profitable site needed. While FE International, Empire Flippers, and Flippa all remain big website brokers, they have also shifted towards larger websites. For owners of smaller websites looking for potential buyers this has made finding reliable options harder.
If you are looking to sell your website, you want to know you're getting good value. Not deal with a lot of hassles. Motion Invest is a business aimed at serving the extremely large, but underrepresented, group of website owners who had websites making $50-$2000 a month.
There is plenty of value to be found in websites that are making money, but not up at the five figure a month level. Motion Invest fills this niche while standing out from other web brokers in a really important way: they are the buyers.
Instead of being a platform for buyers and sellers to meet independently, Motion Invest is the actual buyer. They offer a fair price for the website and make quick payment if the offer is accepted. They help guide the website owner through the transfer process. This makes it simple and gives the website seller peace of mind since they know the buyer is honest and reliable.
There's no need to get a third party involved. Sites that Motion Invest sell are ones that they have already bought and paid for. This makes it a safe and fantastic option for owners of websites that are moderately valuable.Get a Free Site Valuation at Motion Invest Here
FE International is one of the major website brokers out there. They are a large online brokerage that works at connecting website sellers with website buyers. They brag a 94% success rate with selling sites with 85% of those coming in the first 60 days.
The thing is that if you want to go with FE International it's best to “go big or go home.” This broker focuses heavily on high revenue websites with a high net profit. In other words, they want websites with a value of $1,000,000 or more.
The focus on six, seven, and even eight figure websites is where FE International puts a lot of its attention. They have a strong reputation, which is why they are one of the best known brokers. If your site has a lower estimated value, you are likely better off trying other options.
The commission fee will vary on each website sale. Generally, the fee ends up being around 15%. This can change on a case by case basis. However, that's the normal amount and there are no other fees from FE International, which is nice.
The support throughout the selling process (or the buying process) is a big reason why FE International moved up to the point where they became sort of the go-to place for selling the really high revenue websites.
Empire Flippers is another big-name website broker that is worth looking at. They handle a wide array of websites and they are very similar to FE International in those regards. They connect interested sellers with buyers looking for those types of websites.
That being said, the fees and process are quite a bit different. For Empire Flippers there is a non-refundable listing fee. It is $97 for each listing for repeat sellers, but for first-timers the fee is $297. That can be a bit steep unless you have a website with a high valuation.
In addition to those up-front fees the commission tends to be around 15-20% of the selling price. The initial listing fees are not deducted from that total.
Empire Flippers is generally seen as a good business to go to when the website value is estimated between $100,000 and $1,000,000.
Flippa is probably the website broker platform that the most site owners have heard of. This is different from FE International and Empire Flippers because it is a marketplace set up as an auction site. This allows the viewing of many different websites by buyers and a possible bidding war for the right site.
Flippa is known for having some really good potential opportunities if you know what you're looking for, but since it is an open auction site you need to be wary. There are many more potential scams for both buyers and sellers.
The responsibility is on the buyers and sellers to vet one another. This leads to more issues than places like Motion Invest where you know the buyer is trustworthy and reliable. There are also more problems here than with Empire Flippers or FE International where the process is controlled.
For lower value websites that have some upside, this could be a good option. However, if the website has been built well and has a steady income there are almost certainly better options out there.
Flippa is generally a place for websites worth revenue of under $10,000.
Importance of History
Don't forget to have information on the website's history ready. This actually matters quite a bit. If blackhat SEO tactics were used or the traffic history shows a site getting slapped by Google updates repeatedly, that can scare buyers off.
On the other hand, if the site has a very long history going back years or even more than a decade because there were others who previously owned the domain, that could be very good. A long clean history is going to make a website worth more to buyers.
There are some buyers who will simply pass if they can't get any information on the history of the site. Although there are many tools for them to double check certain details, when you sell your website it is mostly on you to provide all the information that might be needed.
When You're Ready to Sell
After getting through the website valuation process you may decide you are now ready to sell your website. Using the basic equation to estimate your site's worth, that should give you a good idea of what brokers are going to be your best option.
Even with good guidance that comes from working with Empire, FE International, or Motion Invest, this is a process.
Avoid Common Pitfalls
Don't get caught up on numbers that don't matter. Buyers (generally) don't care about Alexa number, domain authority score from an SEO tool, or if Yoast SEO plug-in has all the post text ranked green. These can all be good signs of producing good content or having a strong site. But the bottom line comes from the earnings and a few other core numbers.
Don't get distracted by the rest.
Another common pitfall is letting up when you start mulling the selling process. At a minimum, keep any themes or plug-ins updated. If you're used to providing a certain amount of weekly content, then you should keep that up.
The sale might go through, you might change your mind, or a thousand other things could take place. Keeping the site running at full steam is also a very good sign of professionalism. You're never going to lose by doing this.
Finally, don't get tempted to a website broker that isn't as good a fit for your specific site. Making the process as smooth as possible should be a high priority.
Or you could just go with Motion Invest and work closely with professionals who will walk you through selling them your website directly.
The market for selling websites is probably hotter than it has even been before. There are plenty of opportunities to make money online.
One of those methods is going the sell your website route. If the time comes where you get tired of it and want to get out, or maybe are just looking for that big cash out, then understanding the value of your website is going to be crucial.
Even a modest monthly revenue can lead to an amazing payout. When you understand this process then you can quickly and easily answer the question of “How much is my website worth?” fairly accurately.
Use a reliable website broker, educate yourself on the buying-selling process, and you'll be likely to sell your website for a price you will be happy with!