How to estimate the value of a Website

Looking to sell your website, shop, or blog? There are several factors that you can use to determine the value of your project. In the following paragraphs, we explain what they are, which tools you can use to evaluate them, and other factors you should bear in mind when selling your website.

Knowing the value becomes important when you want to sell your website. But why sell a website in the first place? Perhaps you are no longer interested in managing the site or the number of sales or website visitors has become stagnant.

Other times selling a website is simply part of the business model. Here, novelty is the main attraction, i.e. building a website, growing its presence until it becomes successful, and then selling it for a profit. So how do you find out how much your website is worth?

First of all, it is important to distinguish between selling a domain or a complete website with content, etc. A domain you’ve owned for years but have never used may be worth a lot of money. That’s particularly true for .com domains with SEO keywords related to trending topics. The website value usually includes the domain value. However, there are many other factors that are important when considering website worth.

Numerous online tools are available to help evaluate the value of your website. We discuss some of them below and highlight their weaknesses or special features. However, an accurate calculation of website value is only possible after you’ve addressed the points in the following sections.

If you generated an income through your blog, website, or shop, the profits you generated will be the most important criteria for determining the value of the site. As a rule of thumb, you can calculate the minimum worth of a project using this formula:

Whoever wishes to purchase your website should pay its average annual revenue. Sometimes 24 or 36 months are also used as a basis for calculation. Ultimately, it is up to you to negotiate a sales price based on profits. Buyer demand may influence the price as well.

In order to calculate your website’s value based on sales, it’s a good idea to put them in relation to your investments, e.g. maintenance and operational costs. How much time did you invest to generate sales? How many ads or links did you buy? And how have sales developed over the last months or years? Is there potential for increasing sales or has the zenith been reached or exceeded?

The number of visitors your website attracts each month is crucial for determining its value; website monetisation is based on the number of visitors or clicks. For example, if you have 50,000 monthly visitors, views and clicks on banners or affiliate links will be significantly higher than on a website that has 5,000 visitors. Accordingly, the website value increases. More website visitors usually equate to higher sales.

To calculate the value of your website you could multiply possible remuneration of advertising by visitor numbers and monthly revenues. Multiply the result by 12, 24, 36 months to get some indication of the impact on the value of the website.

To gain an even better insight into the number of visitors your website attracts, you should track it. Google Analytics, for example, provides highly accurate figures. When interpreting them, be sure to take seasonal fluctuations into account – Christmas is peak period for visitor and sales while numbers often drop during the summer months. Examine the competition. You can use Google Analytics or a similar tool. Simply enter a competitor domain name and the tool provides rough visitor numbers and other comparative characteristics.

In addition to sales and visitor numbers, there are other criteria that help determine a website’s worth:

• Backlinks: The higher the number of third-party websites that link to your site, the better. However, there are differences in the quality when it comes to backlinks. Wikipedia, for example, is the holy grail, while a link on Facebook is not worth much. Organic backlinks are important because sudden increases in links are usually flagged by Google as a sign that they were bought.
• Social media: Well-maintained profiles on social networks with an active community can positively influence your website value.
• Newsletter subscription: The same applies to newsletter subscribers. High open rates are a strong sign.
• RSS reader: If you run a blog that has many RSS subscribers it signals high-quality content.

Make sure you subtract all expenses for your website before you assess its value and put your values and findings in relation to your competitors.

There are plenty of online tools to calculate the value of your website. Well-known examples are Worth of Web, Empire Flippers, and SiteWorthTraffic. The way they work is similar.

First, you add data pertaining to your website. This may just be your URL, but could include visitor numbers, sales, and the industry category. The tool then calculates an approximate value of your website. Some providers ask for personal data and you may have to pay a fee for their analysis. Other tools simply analyse your URL. The latter has the advantage that you can also subject your competitors to a similar value check.

Valuation on these platforms works largely on the basis of experience or comparative values: the tools collect information about similar website types and their (actual) sales value. Then, a comparison is drawn between your website and an estimated value is returned. It’s a good idea to use several tools to analyse your website, as there could be big difference in estimated worth. Bear in mind that the result is an average mean estimate. Ideally, you combine the results from comparison tools with the value you calculated using the tips provided above.

Use the following checklist to determine the value and set a price for your website:

1. Determine the value of your domain.
2. Set an evaluation period, for example 12 or 24 months.
3. Calculate profits (sales minus expenses for advertising, hosting, etc.) and visitor numbers within this period of time.
4. Analyse your backlink structure.
5. Take a close look at other positive signs such as social media, newsletter subscribers, etc.
6. Determine growth potential for visitors, sales, followers, etc.
7. Use evaluation tools to get a price estimate based on competition and experience.
8. Examine competitors in relation to your website.
9. Set a price and the lowest offer you’ll accept.
10. Offer your website on sales platforms and monitor interest and incoming offers.