Websites or blogs are important aspects of today’s world. People not only use these platforms for personal satisfaction or hobbies, but today, websites and blogs are used for commercial purposes as well. Many webmasters are making a tidy income out of these platforms. While some decide to carry on with their passive income from their websites or blogs, others choose to sell these money making assets, often for a reasonably good amount of money.
There can be many reasons for selling a profitable website. If your online business is worth $100,000 and you have no intention of selling it, but you get an offer of $600,000 for the same business, you may seriously consider selling it. In doing so, you’ll need to determine its worth before putting it into the market-place.’
Total Value of your Website or Blog:
The total value of a website or blog is dependent upon too many factors and variables. Creating and maintaining a website is a serious business, which can lead to enormous revenues. According to an estimate, an average blogger can squeeze up to $75,000 per year from a well-maintained and established blog. Therefore, it is important to know the proper value of your online asset before you decide to sell it, so you can get the best possible deal out of it.
3 Approaches to determine your Website’s Total Value:
Following are some notable ways to determine your website’s value:
1. Total Revenue – Total Cost Approach:
One of the most basic ways to determine your website’s total value is the total revenue minus total cost approach. Generally, your website’s value cannot exceed beyond the amount of total revenue it is currently generating.
When determining your website’s worth through this approach, make sure to arrive at the ‘net’ revenue. The figure of net revenue can be obtained by deducting all the expenditures that are required to run and maintain the website.
Goodwill is another important factor, which should definitely be included in the calculation. Goodwill is basically the amount of value, which you have generated over the number of years that you worked on your website. When you sell a running website, you also sell your efforts and hard-work. Make sure to encash it. Generally, website owners use a multiplier, and apply it over the net revenue. So, for example, if your website’s net revenue or worth is $200,000 and you use a multiplier of 2.5, the final value turns out to be $500,000.
The value of multiplier can be anything reasonable, depending upon the nature and potential of your website.
3. Source of Traffic:
Source of traffic for your website is a major determinant for its net worth. In order to understand this, consider the following example:
“There are two websites: website A and website B. Both of the websites earn a net-revenue of $5,000 per month. Technically, they should be sold at the exact some amount. However, website A gets its traffic from search engines, and website B gets its traffic from paid advertisement.”
In the above example, website A will have a significantly greater value than the website B, mainly because of its traffic source. SEO consultants charge hefty amounts to push websites higher in the search engines. An average SEO organization can charge anywhere between $3,000 – $7,000, depending on the nature of keywords and competition.
A perfectly search engine optimized website values much more than its net revenue. If you own an optimized website, make sure to count this factor in its valuation process.
The above-mentioned factors are some of the most important determiners for the total value of a website. Some other important factors are as follows:
- Page Rank
- Alexa Rank
- Quality of Content
- Monetization Ways
- Google, Bing and Yahoo Indexed Pages
- Local Traffic
- Web Utilities etc.
On the other hand, you can also use platforms like ‘websitevaluecalculator.co.uk/’, ‘yourwebsitevalue.com/’ and ‘www.valuemyweb.com/’ as a guide for establishing the selling price.
Article source: Website Hotline writes about topics relating to small business web design and other digital marketing strategies.