What does the value of a website depend on and how do you check it?

Are you aware that companies should include websites on their balance sheets? Why? Because they are intangible assets that contribute to the overall value of the organisation. At the same time, they can be sold and bought like any other commodity. There is no shortage of those interested in such a transaction. However, they face the common problem of valuation. Without knowing what the value of a site depends on, it is easy to fall into a trap. Therefore, for anyone who wants to buy or sell a site, we have prepared this article. 

What is website value? What influences it?

Many factors influence the value of a website. The most common consideration is:

• position of the website in Google search results
• PageRank

PageRank is an algorithm first developed in 1998. It is still an important ranking factor, although there is no exact method to check what rating a website has received. Only estimates can be made. In simplest terms, according to PageRank the more quality links lead to a site, the greater its value.

• the number of unique visitors (not the number of page views!)
• the number of pages indexed in Google
• social media presence and activity around the website
• rejection rate (bounce rate)
• website loading speed
• The origin of website traffic. Does the traffic come solely from advertising? Or is it generated organically? The greater the diversity of the traffic source, the better.

Site valuation - when will you need it?

There are, of course, two main motivations for why we want to know the value of a site. Either we want to sell it or buy it. In both cases, our lack of experience and knowledge makes us an easy target for dishonest contractors. 

If you have built your website from scratch, you know how much work and time it takes, even if only to create content. A buyer familiar with the market may want to underestimate the value of the site. Therefore, if you want to make a profitable sale, but do not feel confident enough to do the valuation yourself, it is worth using tools or a specialist.

Of course, the reverse situation is just as likely, where the seller you want to buy the domain from will artificially inflate the price.

Different methods of website valuation - their advantages and disadvantages

There are several different methods for assessing the value of a website. Which is the most effective? There is no clear answer to this question. However, if you want to assess the value of a website as objectively and accurately as possible, you should combine, for example, two methods (multi-criteria assessment). Of course, when time and budget allow us to do so. 

Valuation based on tools available on the web

On the web, you will easily find a plethora of free tools created to analyse sites and calculate their potential price. How do they work? Usually collect the most important data on the service under analysis (age, number of inbound links, indexed pages) and estimate the daily revenue of the site. They then determine its value on this basis. Of course, these types of tools should not be trusted unreservedly. However, they can be a good start to valuation. 

Example calculators for calculating the value of web pages:

• Worth Of Web
• Site Price
• Speed Test

For each of these tools, to find out the estimated value of a page, simply paste its address into the calculator bar. In addition to the amount, you will learn information on traffic, revenue, links, competition, social media visibility or rankings, among other things.

Specialist valuation

When you are unable to estimate the value of a domain on your own, it is worth enlisting the help of an expert. A professional valuation largely resembles a site audit. The expert will not only inspect aspects such as traffic to the site, but will also assess its potential and compare it with the competition. On this basis, he will give a realistic figure for the amount that can be demanded from a potential buyer. 

Cost-based valuation

Domain owners, often reach for another 'tactic' - cost-based pricing. What is it based on? On trying to estimate how much it would cost to create a site similar to the one they currently have. What does the term similar mean? It would not only have the same functionalities, but also achieve the same traffic. 

This method of valuation is also not without its drawbacks. Among other things, this is because owners will take into account the costs they incurred when the site was created, i.e., for example, several years earlier. Meanwhile, technology never stands still, and with its development, the costs of building a usable site have also changed. Nowadays, with the help of free and intuitive tools, we can even create a quite functional website ourselves in one day. Consequently, pricing based on cost may be a little off. 

How do you sell a website?

In recent years, a number of specialised platforms have developed through which a website can be put up for sale. The most popular site of this type in Poland is Aftermarket. It is an exchange where you can both sell and buy a site. It is popular with users particularly because of two options. The first is the option to buy a site on hire purchase. The second is the option to lease the domain, which allows the buyer to check that it actually has the declared value. 

Another way to sell or buy a site is through auction and advertising portals. At no extra cost, the site can be listed, for example, on Allegro. Sometimes, however, it is difficult to find buyers there. They are afraid of being cheated, which unfortunately often happens at this type of auction. 

The site can also be bought or sold on foreign portals, e.g. Flippa, Empire Flippers or Quiet Light. As for the former platform, according to statistics, more than 1.1 million websites have been sold through it in the last six months! Both Flippa, Empire Flippers and Quiet Light offer a free quote.

Site value - can I trust the tools?

Selling a site is a process, not a quick transaction that can be decided on spontaneously. A detailed analysis is necessary to find out how much the site is actually worth. Online tools can be a good start in this case. However, the data they present is not always reliable and a valuation cannot be based on this alone. To find out for sure, just use a few different calculators. I guarantee that each will show you a different amount. Therefore, when determining the value of your website, it is worth using specialists who will carefully examine its current state, as well as its potential.

If you are having trouble determining the value of a website or domain - let us know!