Online marketing is all about generating a high traffic towards your website. You spent long hours and sleepless nights in making your website attractive so that large number of visitors views your pages every day. If you don’t know the true value of your website’s visitors then the chances are you are unaware of your site’s actual worth. You must be able to evaluate your visitor’s so that you have an idea about the quality and value of your website. Therefore, valuing websites is important in website buying and selling business. You can use the following methods to assess the true value of your visitors:

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Determining a website’s value is required if you want to get into the business of buying and selling sites for profit. There are various factors used to determine a site’s value. Knowing these factors can be crucial to your success in the venture. Here are some of those factors:

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When selling or purchasing websites determining their true value is important, especially if the value of your website is less than $500,000. It is recommended that that you should first decide the right asking price. Most of the people get confused when they are involved in buying or selling the websites, since they are unable to differentiate between the actual price and true value of the website. Valuing websites steps in here.

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I. Buying and Selling Websites

1. The Problem

   So. . . you’ve worked hard at building a web site from scratch. You started back in 1995 in the web’s “early days”. You built content, built the databases, designed graphics, and wrote software. You promoted your site every chance you got and added e-commerce to generate revenue. The last years seem a blur of staying up late nights, midnight snacks, working odd hours, tweaking code. However, now all the hard work has paid off and you are getting 50,000 visitors every day viewing about 15,000,000 pages the month. One day you get a strange e-mail. It is a well known publicly traded company that wants to see if you are interested in selling your web site. They ask you to name your price. You smile. Wow. Someone wants to buy your web site. Then the smile disappears as you realize that you have no clue as how to value a web site. After all, this is not just like any other business. What do you compare it to? It isn’t like real estate where you can easily check to see what the market is like or what comparable properties sell for. How do you measure your hours or hard work, sweat, frustration, and money that you have poured into the web site?

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After a few almost sleepless nights and a lot of help from other members of our team we were finally able to release the first beta version of our new website valuation tool. This tool is a free online web site value calculator that can help you find the value of a website you want to sell or are interested in buying. Give it a spin and let us know what you think. We are always looking for suggestions to improve this tool.

Unfortunately, we were a little busy to create the tool that we still have not had a chance to create any documentation for the tool. However, it is pretty self-explanatory and is pretty easy to figure out.

There is no established formula for the valuation of a web site. However, there are several factors to consider when valuing a website. These items are discussed more fully in our website valuation article, but we wanted to provide you with a brief summary:

A. Profits and Cash Flow (This is really revenue minus costs)

• 1. Source of Revenues
  • a. Monthly products or services sales from site.
    b. Monthly membership dues
    c. Subscription
    d. Commissions from other sources
    e. Revenue from partnership deals
    g. Advertising
    • i. Sell through rate
    • ii. Does the site have an ad delivery system in place

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