This article raises the question of how a website should be valued.
Website sales is big business. There are various marketplaces online where you can buy or sell websites. This includes sites like Flippa, Latonas, Empire Flippers, and even some webmaster forums. People buy and sell all types of websites – ranging from complex ecommerce sites to simple blogs.
It’s a funny business. I’ve seen some good sites sell for “cheap,” and some bad sites sell for insane amounts of money. The thing is though, there is no set standard for valuing websites. You can ask 10 different people and each one may give you drastically different answers.
Also, there are sites out there that give free website appraisals, but those tools should only be used for entertainment purposes and never be taken seriously.
At the end of the day, the value of a website is really determined by what the end-user (or buyer) is willing to pay for it – kind of like domain names. But, unlike domain names, putting a price tag on a website is a bit more complicated.
I’ve sold a few sites during my career – a few through Flippa and some via the webmaster forums. For the most part, my experience has been good and I was able to sell my sites for decent money. But, this wasn’t because I’m a good salesman – but more so because I sold sites that had value.
Usually, experienced site buyers know how to evaluate sites because they understand all the intricacies that go into a website. However, there are some investors who are business-savvy, but they have no clue when it comes to evaluating the value of a website. I see some investors trying to buy sites solely based on revenue or profit. While, this might make sense for the investor, it is incredibly unfair for the seller. If you know anything about websites and SEO, you would understand how much work goes into it.
Here are some factors to consider when trying to determine the value of a website:
- SEO (or site strength)
- Domain name value
- Amount of unique content
- Time spent on web design and development
- Business model
- Market and potential
- Site maintenance and cost
Beware: Nowadays, scammers are boosting their website traffic stats by buying fake traffic, so keep that in mind. For example, scammers buy Alexa-safe traffic to boost their Alexa rank.
As a seller, you should price your website based on the factors I’ve listed. The seller also needs to consider how urgently he/she needs the money, and adjust the asking price accordingly. As a buyer, you need to do a thorough research on any website you plan to buy. There are risks involved on both sides, but if both parties put adequate time into research, the result can be a win-win situation.