How Much is My Website Worth?

How Much is My Website Worth?

Plus 7 Tips on How to Sell It

How Much is My Website Worth? – If you’re considering selling your online business, you’ve probably contemplated this question: how much is my website worth? How does someone even calculate the value of a website?

This guide will answer those questions and more:

o What impacts a website’s value?
o How can you valuate your website?
o How can you make your website worth more?

I’ll also offer some tips for selling your website.

What impacts a website’s value?

There are many different factors that influence a website’s value, but before we dive into those, it’s important to note that we’re talking about market value. This doesn’t necessarily mean it’s the amount you’ll make when you sell your site; that number is determined by what your buyer is willing to pay. Sometimes it might be more than market value, other times it will be less.

Still, knowing the market value of your site gives you a number to aim for. So let’s take a look at what you’ll use to calculate it.

Traffic split

You might assume that the total number of visitors to your site each month/year is what determines the value, but not all traffic is of equal value.

There are two types of website traffic: organic traffic and paid traffic.

Organic traffic

Organic traffic is the term used for visitors who find your site through search engines, like Google, Yahoo, and Bing. This is the most valuable type of traffic because it requires little ongoing investment, creating a wider profit margin.

You can figure out how much organic traffic you’re getting by looking at your  analytics. You can also see how the amount of organic reach you’re getting compares to similar sites by using an SEO tool, like Organic Research by Semrush. This can help you understand where your site fits into the market.

Paid traffic

Paid traffic is any traffic brought to your site through paid advertisements. This type of traffic requires more funding to maintain, reducing the profit margin, making paid traffic less valuable.

Luckily, if you’ve been properly tracking your ads with UTM parameters, it’s easy to figure out the percentage of traffic you’re getting from paid ads.

The ideal split

There is no universal standard for an “ideal” split of organic vs paid traffic, and most investors will expect to spend some amount of money on advertisements to maintain a site’s popularity. However, you want to have more organic traffic than paid traffic, ideally a lot more. Personally, I think it’s good to aim for at least 70% organic traffic.

Net profit

Total revenue can be misleading if a company spends a lot of money on basic business upkeep. This makes it important to calculate the net profit, which is the amount of money your business earns after expenses. You can figure this out in two steps:
1. Subtract your operating costs from your total income – this reveals your gross profit.
2. Subtract the amount of taxes paid from your gross profit – this reveals your net profit.

A high net profit shows that your website is efficient at turning products/services into money, and every year you sustain a high net profit increases your site’s value.

Revenue streams

Potential buyers will also want to know how your website makes money. Specifically, they’ll be looking at two things: the number of income streams and the quality/reliability of those income streams.

Number of income streams

A website with only one income stream is vulnerable; a major market change can come along at any time and destroy that income, making the site unprofitable.

Sites with several sources of income, on the other hand, can survive if one or even two of those sources disappear. For this reason, sites with diverse income streams are generally going to be more valuable.

Quality/reliability of income streams

The other factor to consider is how reasonable it is to expect that those income streams will continue turning a profit and/or increase that profit. There are two main factors to consider here:

o Ownership. A program like Amazon Affiliates can change the profit-sharing model or even disappear entirely at any time. On the other hand, if you allow companies to buy ads directly from your site, you control how much each ad costs, how long each one runs for, and how long the entire program runs for.

o Past revenue. A buyer is more likely to believe that an income stream is stable if you can provide records of steady income or income growth over a period of multiple years.

The split of these income sources can also be important. For example, if you do  run your own advertising program on your site, but the bulk of your money still comes from affiliate links, that might lead to a lower overall value.



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