How Much Is My Website Worth? Simple Assessment Guide
If you are wondering “What is my website’s worth”, you are most likely thinking of selling your current online business. Each Internet resource has its own value. However, correctly calculating it is not as simple as it seems. Modern website worth calculators usually underestimate the price because they do not consider many factors. Therefore, it’s more profitable for you to find the answer to the question “How much is my website worth?” This way, you are able to point out exactly why the customer is paying this much.
The web site valuation is based on parameters that can be easily checked. Therefore, you should not try to inflate the cost of the web site. This will only scare away potential buyers and delay the sales process. If you are not satisfied with the amount received, read this article to the end. We have prepared several life hacks for you that can add value to any resource.
A Detailed Guide To Evaluating Your Site
Website rating is conventionally divided into two types:
- Formal – this rating determines the most accurate amount of the site’s cost, takes the invested capital into account, and other easily calculated indicators. Such an assessment has legal force but often does not take the potential for business development into consideration.
- Informal – in addition to formal indicators, it takes the positioning of online businesses in a particular niche into account and its development potential. It has no legal force.
A formal web valuation is most often required when you need to resolve partnership disputes, obtain a bank loan, or resolve another issue related to the legal context. Informal value is calculated in order to position your online business in a more favorable light in the future. The owner does not just want to know the answer to the question “what is the value of my website”, he wants to understand how to make it more expensive. Thus, an informal assessment allows us to predict the future market value of a resource.
Despite the many formal parameters that affect the cost, interested buyers usually evaluate the site for three key factors: risk, development potential, and the possibility of a complete transfer. The future owner wants to be sure that they will be able to acquire a profitable online business with minimal risks and continue to develop it on their own. As a result, the market value is often below the expectations of the site owner, who does not take into account all the nuances when transferring the resource to another person.
Important: A business costs as much as a buyer is willing to pay for it. The estimated amount of the sale is between the formal price and the potential value, which is the owner’s expectations.
Key parameters used to evaluate website value
1. Profit
Naturally, one of the main parameters of cost estimation is the profit that the site brings in. It is not the total amount of funds received that is taken into account, but the net margin, which is the money that remains after all payments are completed, including compensation for advertising and SEO.
The logic here is obvious. The site can make high profits provided that expensive contextual advertising is launched. As a result, the owner’s net income will be minimal, which will significantly reduce the price of an online business when it is sold.
If the buyer wants the site to be a profitable investment for them, they are typically looking to see that the resource either already brings high income, or has good potential for monetization.
Margin is calculated as a percentage and varies depending on the category of digital business. For example, a typical net profit for an e-commerce site is about 20-35%, while the margin of sites specializing in selling traffic for a business can reach 80%. For more information, read the Ecommerce SEO article.
General rule: The higher the net margin, the more expensive the site.
2. Traffic source
Organic or paid traffic is a fundamentally important question that needs to be answered in order to assess Internet resources. Indeed, the net margin depends on the source of traffic. If you attract people through an effective SEO strategy, then the time and money you spend on promotion are minimal. If the main source of traffic is paid to advertise, the potential buyer of the site will try to bring down the price as much as possible.
To find detailed statistics on traffic and traffic sources, you can use Google Analytics or SEMrush.
General rule: Organic traffic is more valuable than paid traffic.
3. The value of organic traffic
A quantitative indicator of search traffic is complemented by a qualitative one. With both indicators, one can estimate not only the number of people but also the value of their attraction. This indicator is calculated using the Organic Research tool.
Enter the name of your site in the search bar and, the service will show the cost of acquiring your organic traffic by launching paid advertising in addition to detailed statistics.
General rule: The value of organic traffic proportionally affects the website worth.
4. Paid Traffic Costs
When buying an online business, the future owner will want to know how much they will need to invest in advertising. This amount can be accurately calculated using the SEMrush – Advertising Research tool.
The service allows you to estimate the cost of paid advertising per month.
General rule: If the cost of launching paid advertising is relatively small and the main increase in traffic is due to organic traffic, then the site can be sold at a higher price.
5. Business transfer opportunity
This was discussed above, but we will dive in for more detail. The buyer of the site wants to be 100% sure that they can easily enter into full ownership of the business and continue to develop it. Otherwise, why would they need such a site?
Any difficulties with the transfer of the resource can reduce its cost. Therefore, provide answers to these questions before putting up a resource for sale:
- Will the new owner be able to easily understand the site admin panel and configure all the parameters for themselves?
- Is it possible to transfer supplier contacts with the business, and will they want to deal with a new customer?
- How easy is it to implement day-to-day site support?
- Will your team agree to work with the new business owner or will he need to look for outside contractors? Can you recommend someone?
- Do your customers know you as a personal brand, and is an immediate product important to them?
Do not ignore this point when evaluating the cost, as it often becomes a factor that negates all efforts to optimize and promote the site.
General rule: The easier it is to transfer the site to the new owner, the more they will pay for it.
6. Opportunity to increase income
A site that generates revenue is good. However, there is still a nuance. If the resource has reached the peak of development and its profit is almost impossible to increase without a complete restructuring, then the cost of such an online business can be easily brought down.
The sites with the ability to develop and increase profits through investments in marketing have the greatest value.
In addition, it is worth considering the niche where promotion and monetization are present. A larger number of competitors means that there are more worries regarding promotion. One exception is the resources that have their own unique features.
To see statistics on competitors and your position in relation to them, you can use the Organic Overview tool.
General rule: The development perspective is the key to the high cost of a resource.
7. Monetization Methods
At the beginning of the section, we mentioned the risks. One of the most dangerous moments that arise in the process of transferring a resource to a new owner is that the site will cease to be profitable. An investment in online businesses can eventually burn out. Most often this happens when a resource provides income from one, maybe two sources. If there are several options for monetization, and they are not interconnected, then the investment is not considered as risky.
General rule: The way you monetize your site affects its rating.
8. Exclusion of competition
Some buyers offer sellers to sign an agreement that they will not create and promote the same online business in the future. By doing this, they eliminate a potentially strong competitor, and they can protect their investment.
You can benefit from signing such an agreement — raising the price of an online business. To learn more about your competitors, see SEO Competitive Analysis.
General rule: If you want to sell a resource with maximum benefit, be prepared to refuse to conduct such a business in the future.
What Factors Help Increase The Website Worth
1. Thematic category
When evaluating a website, it is considered a digital business. Therefore, it is not surprising that e-commerce platforms geared towards constant earnings are more expensive than regular information blogs without advertising integrations. Each site category has its own objective evaluation criteria. However, the overall value level for sites with monetization is always higher.
2. External optimization
The number and quality of external links from other sites allows your site to rank better on Google and automatically increases the cost of the site. Find out more in the Build High-Quality Backlinks article.
3. Resource age
As a rule, older sites are more expensive. A resource that is five years old or more can bring in a decent income even with low attendance. In turn, young sites that are not even a year old, have low value even with high popularity. This is because they require a lot of upkeep.
4. Domain Price
A prestigious first-level domain can be half the cost of a site. Moreover, the older the domain, the more expensive it is. More information in the article .Com alternative.
5. SEO
How effective is the structure of the site? Is the resource visible by key queries? How many pages are basically in the index? These are the questions along with others that the buyer asks before buying a site. Quality SEO is the key to a good deal. For more information read the What is SEO article.
6. Design and content
Intuitive design and unique useful content are must-haves for modern resources. Especially if the site deals with YMYL topics and falls under the E-A-T requirements. These factors can also be considered when shaping the value of an online business. Learn how high-quality content for your site is in Website Content Audit.
7. CMS functionality
Do you use a paid content management system with advanced functionality? Great, then your resource can be sold at a higher price.
Popular Site Valuation Methods
Above, we have listed the main parameters that are taken into account when evaluating web resources. David Gass, a specialist in buying and selling online businesses, listed about five different methods he uses to do a website worth check. Let’s take a look at them.
Method 1: Comparative Analysis of Competitor Sites
First, you need to find resources that have similar ages, traffic, and income parameters as yours. You can do this using the Flippa.com service. In addition to choosing similar sites, this service shows their prices. This greatly simplifies your task since you just need to find the average value. This will be the approximate amount that you can ask for your site.
David recommends that you do not take into account sites with too high or low prices because they clearly have their own characteristics that make them unique.
For example, we’ll choose a relatively young website whose content is related to travel. In the filters, we set the data: age – 1-3 years, up to 6000 views every month, monthly profit – up to $500.
In total, six search results were returned. We discard the most expensive and cheapest site, after which we find the arithmetic average of the amounts that remain. The estimated resource price with the given as $625.
In order to find a more accurate result, you should carefully examine each site. However, this method can be used to quickly assess the resource and be a guide for sites with similar data to yours.
Method 2: Estimating Multiplicity of Income
Buyers often divide the price of a site by its monthly profit. The resulting number determines the number of months for which the investment in an online business will pay off with the same monetization methods. The reverse plan works as well. Simply multiply the number of months of payback by monthly income in order to get the value of the site.
Take the same example from the Flippa.com source with travel sites. The resource queenslandtourism.org.au is asking for $500 with a monthly profit of $369. That is, if the website is sold, the owner of the site will receive 1.4-fold income, and the buyer will pay back his investment in a month and a half.
Not much, isn’t it?
However, here’s the competitor site Travel-Agent-Us.com that is more confident in its abilities. The price for the resource is $ 800 with a monthly profit of $50. Thus, the owner will receive an amount that is 16 times higher than his monthly earnings if he manages to sell it.
As we can see, the coefficients are all different. And there is a reason for this, since the first site, despite the high income, is not even a year old, and the second site has existed for three years.
David talks about this. This particular method of estimating the rate of monthly income is inaccurate, since it does not take into account many external factors.
Method 3: Website Traffic Worth
It is quite difficult to determine how much a website is worth without obvious monetization. In this case, use the method of determining the value of organic traffic. First, the main keywords that lead visitors to the site are determined, and then in Google Adwords or SEMrush, the cost-per-click is determined for each key.
The general formula for calculating the value of traffic is the cost per click multiplied by the number of unique visitors tied to this keyword.
As an example, let’s take a look at expertphotography.com. Organic traffic is attracted to the “popular photographers” keyword with an average cost-per-click of $4.69.
All keywords that bring the maximum number of targeted visitors to the resource are evaluated based on this same principle.
Method 4: Determining the Cost of Development and Promotion
Here, the price of a website is calculated in a completely logical way. You need to add the cost for developing the same site from scratch and the amount of promotion of the resource to the same positions that it now has. Now, take into account the time factor. To determine the value of a resource, it is necessary to attract developers and marketers so that they look at the site and give their objective assessment.
An interesting factor is time. This parameter includes two components:
- The number of hours during which the new owner will be able to create and promote the same resource.
- The amount of money that the site will earn during the development of a new site.
For example, if development costs $1000, SEO costs are expected to be around $2000, it takes 10 hours for developers to create a website, and each hour of their work costs $100, how much money can this resource bring in? Imagine that the launch and promotion of a web resource will take six months. During this time, the same site brings $3000, that is, $500 per month. The answer to the question “how much is my website worth” is: $1000 + $2000 + $1000 + $3000 = $7000.
Method 5: Calculating Consumer Value
David advises using the convenient Hbsp.harvard.edu calculator, which allows you to calculate the Customer Lifetime Value parameter.
The proposed service allows the buyer to see the value of each client. Based on these data, he will be able to calculate the amount that can be spent on the resource. The information received will also allow the seller to justify the high price of his resource.
Alternative site assessment methods
In addition to the popular methods that David Gass mentions, there are several alternative methods in checking the worth of your website. They are inaccurate, but give a quick idea of the value of the resource.
1. Use a simplified payback formula
It looks like this: Site cost = average monthly income x number of months for which the resource can pay for itself. Usually, it is 1-3 years, that is, from 12 to 36 months.
2. Ask SEO Professionals
Any SEO professional is able to give an objective assessment of the web site. If there is no such person among your friends contact the community on the forums. Just create a new topic with the question “how much is this site worth” and leave a link to your resource. The answers might not be accurate, but you can find out the feedback from experts and will be guided by how much you can make at the beginning.
3. Put the site up for auction
We already mentioned the Flippa.com site. It is not the only one where you can put your site up for sale and get a free estimate. Although you should not get involved in this method. It’s better to do the calculation yourself.
Useful Tools For Checking Value
Buying and selling an online business happens so often that a large number of services have appeared on the Internet to evaluate the sites value. The description of each website cost calculator indicates which set of parameters it takes into account when calculating the price. Typically, everyone takes into account the main factors: traffic, revenue, Google ratings, SEO, and external optimization. Read more in article 11 Off-Page Optimization Strategies.
Websiteoutlook.com
This web-valuer analyzes more than 20 indicators, including domain authority, traffic value, resource popularity, citation in social networks, information about competitors in organic matters, and many other technical parameters.
The cost of the Travel-Agent-Us.com website was estimated at $1150.
Worth of Web
This service gives a detailed report on how much the site costs and how much revenue it can generate. It also estimates the quantity and quality of traffic, UI/UX parameters, the prestige of the domain and hosting, the rating of the resource in search engines, and its citation. In general, this service has everything that a future buyer needs to know about a new business.
The homepage indicates that over the past nine years, the Worth of Web tool has tested over 15 million sites. Well, let’s add one more.
The cost of the Travel-Agent-Us.Com website was estimated at $2066. Not bad, let’s move on.
Site Worth Traffic
The tool is suitable for calculating the cost of web sites, as well as viewing statistics on daily attendance, income, rating, and other key parameters.
The cost of the Travel-Agent-Us.Com website was estimated at $406. Not much. This service is probably tailored for buyers, not sellers.
Webuka
This tool positions itself as the most accurate calculator for calculating the value of an online business. It is based on an algorithm with mathematical formulas that are calibrated depending on the actual transactions of the website.
The cost of Travel-Agent-Us.Com website was estimated at $ 949. This figure seems to be accurate!
Website Value Calculator
This is a built-in calculator on the Smallseo.tools website. On the page of the service, it is indicated that with its help you will be able to rank your site value with maximum accuracy. Moreover, you can analyze the performance of 100 web sites at a time. You just need to copy their URLs into a special text field and click Submit. This is convenient if you need a comparative analysis. We were interested in only one resource.
The cost of the Travel-Agent-Us.Com website was estimated at $1020.
You may be asking yourself why we used Travel-Agent-Us.com to check for cost? It is because it was the first available option from the Flippa.com site. Here are the results that all the calculators we used gave:
If you calculate the average value, discarding the largest and smallest amount, the Travel-Agent-Us.com website can be sold for $979.75 which is a decent price. Although we have already mentioned that online calculators do not take into account some of the external factors that can increase the price tag. Therefore, their data can be used as a guide, not as the final result.
The Main Life Hacks To Increase The Price Of The Site
At the beginning of this article, we promised to tell you how to add value to a website if you are not comfortable with its current state. Not all points can be completed immediately before the sale. However, these life hacks will be useful for anyone who wants to make good money from selling an online business.
Web Property Value Tips
- Separate traffic sources
Don’t just separate, but ensure that a significant number of customers are attracted by organic traffic, not paid traffic. In this case, you can set a higher price, and you yourself will save on the launch of PPC.
It is worth noting that a complete rejection of paid advertising will not help you. You need to reduce its importance when attracting customers, but not to exclude it. Otherwise, the next time you change the ranking algorithms, your site will significantly lower its positions in SERP, which will immediately affect its profitability.
More traffic sources equal less risk. Therefore, you can additionally connect social networks and email newsletters to organically increase traffic along with advertisements on Google.
- Use the advantages of the domain
We have already mentioned that sites that are located on prestigious first-level domains are much more expensive. Even if this is not your case, remember that the cost of a site increases every day as the age of the domain grows.
If you can’t wait any longer, try to register all variants of domains that somehow coincide with the main name of the site. This will immediately increase the price tag.
- Take care of site reputation
Promoted and reliable brands are paid in higher amounts than no-name sites. However, creating and maintaining a reputation requires a commensurate investment of time, effort, and money. If you do not yet have such resources, it does not matter. You can go in a simpler direction and try to improve the design and content of the site. The value of a website for users is one of the criteria that allows it to rank higher. This means it can be more expensive, and the worth of website design can be included in the total amount if it is unique.
- Increase the number and quality of monetization paths
More options for monetization of the site equals less risk. A website’s income will decrease or even disappear as a result of unforeseen circumstances. Therefore, think of different ways to make a profit such as affiliate marketing, e-commerce, subscription to the service, or advertising integration. It is important that income streams are not dependent on each other.
- Increase website ranking and visibility
The site, which ranks first among the results of keyword searches, is of high value, even without monetization. To increase your site’s position on Google, follow these steps:
- Conduct a full SEO audit and fix all technical errors. Find out more in the What is the Technical SEO Audit? article.
- If necessary, expand the site structure and rearrange the sections. The resource should have a clear hierarchy and be as clear as possible to users.
- Take care of external optimization. External links on quality sites are one of the conditions for a quick rating increase.
- Create a community around your brand in social networks and forums. This will not only increase the site’s ranking but also positively affect its reputation.
Tips For Selling And Buying A Site
If the question “How much is my website worth?” is associated with the desire to sell the resource in the near future, read the last few tips that will allow you to prepare as much as possible for the transaction, and take into account all the important nuances.
Recommendations for Sellers
- Prepare all website reports. Be prepared to provide detailed income data and access to the Google Analytics statistics. This way, the potential buyer will see that you are not hiding anything from them, and you are confident in the value of your web site.
- When searching for buyers, it is not necessary to auction the site. Perhaps your online business will interest competitors. They will pay much higher than those who first encounter such a direction. If competitors aren’t interested, contact representatives of related industries or suppliers. Someone from your community may potentially want to start a new activity for a long time.
- Make sure that you can completely transfer your business and even give advice on its further development.
- Before meeting with a potential buyer, evaluate your site yourself using different methods and calculators. You must know exactly how much your resource is worth. Be prepared to answer all tricky questions. Do not simply answer but reinforce each word with data from authoritative sources. That is why we examined many different options for evaluating online businesses in this article. If you are 100% sure of the price, the buyer will pay it.
Recommendations for Buyers
- Investigate the website all over. Do not only investigate its present but also its past. Go deep into the history of the resource. Find out whether Google imposed sanctions on it, how it was promoted before, which strategies worked, and which did not. Learn about the past and be able to predict the future. You will see how promising this business is.
- Research this niche. Study your future competitors and understand if you can build from them. Check with the seller if their site has any competitive advantages, interesting features, or factors they used to attract customers. Also do not forget to make sure that the seller themself will not become your competitor. We wrote earlier that this clause can be prescribed in the agreement.
- In some cases, an online business is acquired with a team of employees who will continue to conduct it. It is better to meet these people before making a deal to make sure that they are professional and reliable. Otherwise, it is worth looking for other specialists or another site in the same niche.
Selling a site is not much different from selling a business. In both cases, you need to study financial and marketing indicators and make sure that the new project will generate revenue and that it can be scaled without restructuring. Our main advice is when buying or selling, do not rush and delve into the details. If you are not confident in your abilities, seek professional assistance.
