Site Valuation?

Hi Simmo,

I asked a similar question myself and received many differing answers, here are the most common answers I had;

1 (from an accountant) 3 years net profit so you could ask $180,000 based on your figures ($5000 per month profit)

2. From webmasters 6 Months net profit is their perceived valuation of an existing website therefore you would expect $30,000 for your website.

3. a more realistic figure was a general one of 1 years net profit ( based on the pervious years income) therefore you could ask $60,000 for your website

I hope this confuses you!!

Everything is relative Simmo it depends on;

1. How badly the buyer wants your site
2. How badly you need to sell
3. How much you value it at yourself ( thats the most important one)
4. How much the buyer wants to pay for it.

I would imagine its better to hang onto your site and build it up, it would then be a long term investment and provide a steady income ( although a fluctuating one)

I have seen recently people selling websites ( or offering them for sale) at silly prices but you have to ask

1. why do they want to sell it
2. how much do I value it at.

If I was you Simmo I would ask the buyer for $100,000 then haggle!!

EDIT- Just realised your domain name “oggs” you may find the buyer wants it for the name not the content!

I agree with PokerMonger..if its already generating $5k a month and you needn’t change a thing…I would hold out for a minimum of 5 years return…or even hold it and wait.

Taking the following factors in mind.

What you need to consider is that with a bit more work what could it generate and also taking into account future natural growth in your price. Growth is a definate factor in price and it is much overlooked by those making offers…in the ppc rev world currently there are people paying 3-5-10 years rev on good names ..tm typos obviously aren’t worth that much due to risk factor.. generic typos are not an issue in most cases and the first rev pattern can be applied. Personally I think people in this realm tend not to look at the other value in a domain aside from the actual ppc…tho this is changing…people are starting to see the brandablity, the usability, the keyword value…and willing to pay over and above the ppc rev for domains.

Also is the buyer an enduser or a domainer…this is a crucial factor.

With casino affilite sites…the potential income is far higher in many cases than ppc as if you can attract quality traffic the signups far surpass ppc clicks. So take all that in consideration before you sell…don’t get greedy…be realisitc…and also be absolutly sure you want to sell..once its gone its gone

imho

zoot

All are good comments. In my experience with the professional services industry (my background), the expected purchase price would be 2.5X revenue. So that would be 2.5 x 60,000 = $150,000. Of course that is a different industry and this one has certain risk factors associated with it that might drive the price down. But, the industry is also experience explosive growth, which could drive the price up. Like others have said, it depends on the buyer and what they intend to do with the site.

You could also sell your current site, take everything you have learned, and start another site and be up to the same revenue in a year or less.

1.5x annual revenue should be the top side of the equation if you are an affiliate, because of the inherent risk of affiliate programs.

If your site generates a fixed income, however, you might be able to find a higher multiple.

Interesting stuff guys … hopefully Simmo doesn’t mind us all sharing a view …
:1circling

As a gambling advice website owner myself I’d love to see the number as high as possible of course …
:cheers:

However, when it comes to selling or buying, it’s useful to go back to basic principals … specifically – what is the Unique Selling Point ?

In the case of Websites – I’d suggest three things :
– 1) Content.
– 2) Exisiting traffic, customers and revenue stream.
– 3) Domain Name.

So in your case you’ve got some strength in all three areas – good content – good stream – reasonable name (although not an obvious winner).

And what are the other factors that are not unique?
– 1) Time in work required. The content needs to stay current.
– 2) Industry risk. Affiliate plan failure. New legal online restrictions (etc)
– 3) Traffic. You don’t get much traffic (180,000 odd ranking in Alexa)

Of course you could argue that point 3 could actually be a positive issue as well – imagine what it would generate if you did get heavy traffic …
:happydanc

Now the big issue – you’re on the net – the work could be reproduced and created on a similar site for minimal cost. Of course the person would have to start building up from scratch – but it’s a low risk alternative of anyone trying to get into the industry right?

After all that’s what we all did right ?
:cheers:

So seriously. What could you EXPECT to sell it for?
Personally, I think that the number of 1.5 time revenue sounds a reasonable pitch … and if you had a GREAT DOMAIN then it could be more.

That’s some serious cash – the buyer will have financing costs – and have to put time in – probably taking 2 years to break even. In our Industry 24 months is a long time … you could build-up that scratch site in that time – so that is a fair risk / effort / return in my opinion.

However, as a buyer I’d probably want it to be 1.5 times the AVERAGE of the last three years NET REVENUE. Just becuase last year was great does not mean it continues – especially if you’re on CPA rather than revenue share.

Again … just my two cents worth. And it is a nice website Simmo !!
Well done.
:cheers: