How to Appraise a Website?
You might not know this but I actually used to own one of the most popular blog flipping and site flipping blogs on the internet. But I ended up selling it, which is sort of ironic if you think about it. I have also bought and sold several websites over the years and done some interviews on the subject, so a lot of people still come to me with questions about buying and selling websites. I guess I’m seen as an authority on the subject and that’s fine with me.
This morning I was asked by someone on an internet marketing forum I moderate how to appraise a website. They are wanting to buy a certain website that is up for sale right now on flippa but they aren’t sure how much it’s worth. I decided to answer the question in a video so other people can find the answer when they need to…
You can use this information to help you decide how much your own site is worth before putting it up for sale, or to help you get an idea of how much a site you are looking to buy might be worth. I’ll assume you are the buyer for the purposes of this information but it can be used either way.
Before I start, let me say this… There’s no way to ever say exactly how much any website is worth. It’s impossible to do because there are so many variables with each individual site. And it depends a lot on the potential buyers who see it… One person might pay a million dollars for a site and another person wouldn’t spend a penny on the same site.
Now, with that being said, there are some ways to get a general idea of how much a site might be worth, so you have a basic guideline to go by rather than just taking a wild guess and hoping you are close.
Here’s how I do it…
First I look at some basic things to see if it’s even worth digging any deeper. Such as how long the site has been around, how many backlinks it has, its page rank, how many pages/posts it has indexed, how many subscribers it has, if it has high Google rankings for the keywords it targets, search volume, average monthly traffic and earnings, where the majority of traffic and earnings come from, how difficult it would be to maintain, how much time and money needs to be put into the site on a monthly basis, the reputation of the owner, and so on.
Seriously get as much information as you can before going any further. If I am still interested after looking all of that stuff then I will move forward with my process. Most of the time after looking at all those things you will find that something just doesn’t seem right, or doesn’t add up. If that’s the case it’s probably better to simply walk away. It needs to have solid stats and a great history in order for me to stay interested.
You will have to make a judgment call and go with your gut feeling at times. If you find that you are trying to convince yourself to move forward then you are probably making a bad decision. Only continue if everything seems to be legit and you are still excited about it at this point.
Honestly most sites you will find for sale are NOT worth buying so don’t be surprised if a site you thought would be a steal ends up not being all you thought it was cracked up to be after digging a little deeper.
Next, I take 4 things into account:
1) Income Value – This differs based on how long the site has been around and how well established it is. A newer site will typically be 10 times the monthly earnings. But a more premium site with a longer history can easily go for 24 times the monthly earnings.
So let’s assume you are looking at a well established premium site that earns $2000 per month on average. The income value is $48,000
2) Traffic Value – Let’s say the site averages 10,000 unique visitors per month. If you started a brand new site and wanted to immediately match the traffic using PPC at just 10 cents per click. It would cost you $1,000 per month to do that.
I take this at a one year rate so the traffic value would be $12,000 in this case.
3) Subscriber Value – The rule of thumb here is that typically each email subscriber is worth $1 per month on average if the list has been built correctly and a good reputation with the subscribers has been formed.
So if it has a list of 1000 it is worth $1000 per month. This is another one I calculate per one year. So the subscriber value is $12,000
4) Content Value – Let’s say the site has 500 pages. If you wanted to start the site from scratch and paid someone just $5 per page it would cost you $2500 so that is the Content Value even at a very low estimate.
Total them up and you get $74,500
Now, that is not actually how much the site is worth because if it wasn’t for the content, traffic, subscribers, etc… There wouldn’t be any income. They all go hand in hand.
So you can’t really separate them all out and then add them together individually. Some can’t exist without another. Yes it can be quite confusing, but you want to be sure it has good numbers in all categories to make it worth buying.
I would say if we were talking about real website here then it would be valued at somewhere around $50,000 to $60,000. That is mainly based on the income value with some added value from all the other stats as well.
In reality, I would say that you should expect to pay at least $30,000 for a site like this on the very low end, and I would say not to go any higher than maybe $60,000 if you REALLY want it and everything has been triple checked to be sure it’s all legit.
Ultimately a site is only worth as much as someone is willing to pay for it so it’s a very difficult thing to judge. But hopefully you have a better understanding of how to get a decent estimate now.
Also, before I go, I want to give you a quick warning…
There are quite a few free site valuation tools out there and I see a lot of people getting excited at what those tools say their site is worth. Trust me, 99% of the time they are dead wrong. I’ve rarely seen them be anywhere close to correct.
What I have done in the past though is use maybe 10 of them in a row to see what they all come up with. Then I throw out the highest two and the lowest two, and average the rest.
Then I compare it to what I had already come up with as the sites value using the system I just told you about. If the numbers are somewhat close it does help to confirm the estimate, but that’s about all I would trust them for.
Ok that’s it for today. Now go to BeAlwaysMarketing.com and see how my team and I can help take your business to the next level! You might even be able to sell your own site for a huge profit. BAM!
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