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  1. #1
    ABW Ambassador Abigail's Avatar
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    Just wondered if there is a rule of thumb way to calculate the value of a going concern website?

  2. #2
    ABW Adviser Panel Dynamoo's Avatar
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    It varies, but a general rule of thumb is that the site is worth one year's earnings, but this can be much more or much less depending on a whole array of functions.
    Innovative advertising with Slimeware Corporation and Telephore. Mail-order fuel with Petrol Direct.

  3. #3
    Affiliate Miester my2cents's Avatar
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    I disagree with MOO...

    you can ask what ever you want for a website...

    However, most sell for 2 months income... Brick and Mortor rules don't apply....

    The sad, thing is most websites sell for less then $200, with $50 being the average...

    I think the thinking si why paid fpr what i can do for myself...

    Joe
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    that's my2cents, 'cuz I'm a legend in my own mind....

  4. #4
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    I think that 2 months income is quite low....I would be a buyer for any number of sites (within my pocketbook range) at 2x monthly earnings. 6 months or more sounds more realistic.

  5. #5
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    I have never, ever, ever heard of 2 months income being the rate. And I have purchased and sold quite a few sites.

    my2cents, where are you getting this "the sad, thing is most websites sell for less then $200, with $50 being the average..." from?

    Chet

  6. #6
    Domain Addict / Formerly known as elbowcreek Thomas A. Rice's Avatar
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    Really dependant on the situation....... I had one fellow that owned the .tv for a domain name, and I owned the .com ....... my site was not generating much income at that point, but they wanted the name badly. Got a nifty 4 digit check out of the deal, I'm happy he's happy.
    Following everyone else is a GREAT way to become average.

  7. #7
    Moderator MichaelColey's Avatar
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    I would be a buyer of many sites at 2 months (or even 6 months) of income. You'd make your money back in 2 (or 6) months and everything after that is gravy.

    I wouldn't sell any of my sites for less than 5-10 YEARS worth of income (not revenues). That may be on the high end, but I really like my sites. Think about it. If I could make $100,000 per year (as an example) from a site with very little ongoing work, why would I sell it for $20,000, $50,000, etc.?

    Dynamoo alludes to "a whole array of functions" that could make sites worth more or less. Some would be:

    1) The amount of time it takes to maintain.
    2) Whether income is growing, staying steady, or declining.
    3) How well positioned the site is.
    4) How hard it would be to duplicate the site.
    5) How unique the site is.
    6) How loyal the customer base is.
    7) How sustainable the business model is.
    8) Whether the site relies on a single merchant and/or traffic source.
    9) What sort of untapped potential the site has if marketed properly.
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  8. #8
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>However, most sell for 2 months income <HR></BLOCKQUOTE>

    One of mine sold for a 6 figure sum that was 100 times the 2 months income.

    It may sound trite, but the value is what you can get for it. Websites aren't just about selling a business, they're also real estate.

  9. #9
    Moderator MichaelColey's Avatar
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    Also, there's a big difference between a domain name, a web site, and a web site that's producing income.
    Michael Coley
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  10. #10
    ABW Ambassador Abigail's Avatar
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    It's definitely the website, not the name they are interested in. I received an opening inquiry, but I am sure the party wouldn't be interested - I was thinking X24 months - and really why would you sell for less then what's on the books for that? And naming the figure would tip my hand, so to speak, unless I am serious, right?

  11. #11
    notary sojac Herb ԿԬ's Avatar
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    hey, play it cool, there has to be a reason for their interest.

    and, surf around for the .net .us .info and other versions of the domain name just in case there is a clue there

    and good luck.

  12. #12
    Member gotapex's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by MichaelColey:

    I wouldn't sell any of my sites for less than 5-10 YEARS worth of income (not revenues). That may be on the high end, but I really like my sites. <HR></BLOCKQUOTE>

    Sooooooo, you sellin?

  13. #13
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR> I wouldn't sell any of my sites for less than 5-10 YEARS worth of income (not revenues). That may be on the high end, but I really like my sites. Think about it. If I could make $100,000 per year (as an example) from a site with very little ongoing work, why would I sell it for $20,000, $50,000, etc.? <HR></BLOCKQUOTE>

    I agree with Michael. If you have a web site earning a nice amount, why on earth would you sell it for even one years worth of earnings? 5-10 years of earnings would be my selling price, too - with 5 being the more "likely" since 10 years is generally the figure used off-hand for the sale of a normal brick/mortar business.

  14. #14
    Kung Fu Master Eathan's Avatar
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    If it's producing $100,000 a year, why sell it at all? Then again, who knows where the Internet will be in 5-10 year's time...?

    Beyond revenue, also consider the less tangible values. Does the site produce mailing list subscribers, do you use it to build PR of new sites, is the revenue stable/loyal, how much is revenue increasing/decreasing per month, etc?

    I've heard this question asked many times, with a lot of different answers, but it really comes down to what it would take for you to part with it, vs how much you think they'd pay.
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  15. #15
    ABW Adviser Panel Dynamoo's Avatar
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    Michael's list of 9 points is a good one, and was basically what I was thinking when I typed in my original quick response. This is why it's hard to quantify the price without details.

    I'd add another point though - as part of the sale agreement you may be required to sign a "no compete" clause, so that you won't use your expertise to compete with the site you've just sold. This is important, because if you are an expert in a particular product area and knowledgable enough about SEO, you could fairly easily build a brand new site that could eat into the market share of the site you just sold.
    Innovative advertising with Slimeware Corporation and Telephore. Mail-order fuel with Petrol Direct.

  16. #16
    Moderator MichaelColey's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by gotapex:
    Sooooooo, you sellin? <HR></BLOCKQUOTE>I would certainly consider it for the right price. I've only had one semi-serious offer over the years.

    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Eathan:
    If it's producing $100,000 a year, why sell it at all? <HR></BLOCKQUOTE>Mainly, to free up the time it takes to keep things up to date and to focus on new sites.
    Michael Coley
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  17. #17
    Newbie sa00's Avatar
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    Personally, I would not sell for less than 5 years either...

    Hi Michael from Mansfield - I"m in DFW also

  18. #18
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    It depends on several factors such as the industry and how the website generates sales.

    If it's all from seo, that means the website can be delisted in 3 weeks and you'll get zero sales.

    At one point I bought a network of RX websites for 1 month's income, and that's just because of the great unknown when it comes to the future of that industry. The more stable the market the higher the demand.

    Some factors I look at are sales, traffic level, number of backlinks, quality of website, & content. The biggest factor is how soon I'll get my ROI.

    Antoine

  19. #19
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    Its supposed to be 10x-1 yr of earnings.

    I sold one for 7 figures.

  20. #20
    Resident Genius and Staunch Capitalist Leader's Avatar
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    7 figures!

    *consideres adding "this site is always for sale" to the footer of all my sites*
    There is no knowledge that is not power. ~Hemingway

  21. #21
    Full Member ahmar's Avatar
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    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by limey:
    Its supposed to be 10x-1 yr of earnings.

    I sold one for 7 figures. <HR></BLOCKQUOTE>

    Lets see how many zeros make 7 figures , 1,000,000.

    <BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Leader:
    *consideres adding "this site is always for sale" to the footer of all my sites* <HR></BLOCKQUOTE>

    I guess I should do the same, darn wasted so much time in AM.
    <DT>[size=1][color=navy]"The best measure of a man's honesty isn't his income tax return.[/color][/size]<DT>[size=1][color=navy]It's the zero adjust on his bathroom scale." Arthur C. Clark[/color][/size]</DT>

  22. #22
    Newbie sa00's Avatar
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    Why would anyone sell for 1 month's income? Makes no sense to me. It would be different if it was a new site, with no income. I once bought a new site on ebay for $100 just because I liked the domain. However, if it is generating a monthly income, why sell for just one month's income? That's crazy...

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