How to evaluate the worth of your online property

Find The Value Of Your Web Property In Less Than 5 Minutes Using Flippa

I believe that almost all web properties have some value even if it’s not generating any income at present. However, I don’t think that there is a definite rule to value an online property since each business is different. And no tool can accurately value the worth of these online businesses.

But still the easiest way to find the fair value of an online property is by using Flippa's Advanced Search. Flippa allows us to filter the search results based on several criteria like property type, domain, traffic, revenue, profit, etc. So if I want to sell my website and want to find its value then I can easily find related websites on Flippa that have been sold recently.

Repeat customers and time spent.  The online in essence is not that much different than the real world. In the real world, if you don’t have repeat customers, you are most likely not to survive. Internet repeat usage is even more important.  If you have lots of users coming back to your site on daily basis and are spending good amount of time, chances are sooner or later you will get hockey stick growth.  How soon is that growth depends on how many other people are they bringing along. For example:

Site 1

Lets say Tipspit.com got 5000 users on day of the launch

90% of them came back the next day

each of those 90% spent 30 min per day

they each brought at least one more person with them

this one additional person they brought was brought within 24 hours

 Site 2:

A site which has million users

90% of them don’t come back

they do don’t bring friends along

their time spent is very little

but due to the advertising spend or other factors, they do get lot of new traffic, million users is the normal norm

Which site is worth more?

The answer is Tipspit.com

You want a great value, build a good product, get loyal customers and make sure they bring others along.

Your monthly earnings from the online property are a big factor in its evaluation. Generally online properties go for about 3 times their monthly earnings.

Revenue Multiple – You have most probably heard the statistic that most businesses sell for 2-3 times earnings. Basically a buyer will take the current net profit of the website for the past twelve months and then multiply it with an earnings multiplier to get a final valuation figure.

2. Comparable Sales – Buyers will use this method if there is sales data available for similar websites. They will then adopt a similar valuation and make an offer based off that.

3. Asset Value – sometimes buyers will ignore the revenue of a website and instead look at the assets of the site (the customer list, or email database) and make a calculation on that instead.

By Jock Purtle

Older domains are generally worth more because search engines trust them. If your domain is relatively new, your website's value will dip a little.

If the site does have an existing (verified) revenue stream, it’s an immediate investment for potential buyers. Assuming all the other variables check out, it’s reasonable to expect anywhere in the region of 1 to 2 years worth of revenue as the final sale value – depending on the reliability of that revenue source and amount of effort required to maintain in. The purchaser is almost guaranteed to turn a profit after two years, or sooner if the maximum revenue potential hasn’t already been realised. This is the most reliable evaluation you can get.

James Bruce

How fast are you growing determines your value.  If your online property is growing fast, chances are high you will be profitable.  Those looking to make a grab, will move much faster before valuation jumps higher.  Grow fast and value could be 19 Billion.