Websites for Sale! - How Do I Determine the Value of My Websites?

If you are going to buy or sell a website that's worth less than $500,000 you may be much more interested in determining the proper asking price rather than the proper value. Many people use the terms price and value interchangeably. They question what their website is worth, when they really want to know what price the website will sell for.

The truth is, the terms price and value are really quite different. A website appraisal, or valuation, may produce a specific value necessary for some legal purpose. A price, on the other hand, is what the market might pay for the website. Most buyers and sellers really want an idea of price. A valuation might be appropriate for a larger business, but the marketplace still almost always determines how much money a seller will get.

So, how does one determine the value of a website? There is no one specific procedure; there are many. And not one of them is perfect. Most valuations are based on a multiple of cash flow, and there are accepted rules of thumb for all kinds of websites, in all types of markets. No valuation method is precise, but they can provide you with a good idea of value..

Keep in mind, however, that the numbers are not the only factor to consider. Some websites are more in demand than others. For example, a website that generates revenue automatically will probably sell for much more than a website that requires work to be done before revenue can be generated - if everything else, including financial performance, is equal.

Using outside professionals when you're buying or selling a website can be invaluable. When in doubt, talk to someone who owns a similar but noncompetitive website. The information you receive will be well worth the cost of sending an email.