Lorelle VanFossen has a good post up at The Blog Herald today talking about what buyers look for in a blog. I do hope in all sincerity they are paying her well, you’ll need 5-10 minutes just to read it, but it touches on a subject I had planned to cover here at 901am anyway: what is your site worth?
Before we start, ignore every heart breaking, time consuming moment you’ve ever spent with the site from developing it, marketing it and writing for it. It’s normal for people to mix emotions with a site sale, but it’s not how the game works, and emotionally detaching yourself makes the process a whole lot more easier.
The value of your site, 99 times out of 100 will come down to one equation:
The number one thing a buyer is going to look at is revenue. Buying and selling sites or blogs is no different to buying and selling any sort of income producing business, they are given a value based on revenue. Generally speaking established sites are usually valued at between 10 to 12 times monthly revenue. For example if your blog was making $100 per month, it would have a value of between $1000-$1200. This can vary though, but usually in multiples. A new(ish) site without a proven income record over a couple of months can go as low as 3-5x monthly revenue. Buyers look for consistancy over time. An above average site, particularly ones with reasonable page rank and/ or design can go as high as 15x monthly revenue, although I’d note occasionally. It’s only at the very bottom end of the market will buyers not consider revenue, for example they might buy your site because of its unique design or layout. Usually these sales are less than $100. A WordPress blog with half a dozen unique posts using the Kubrick template might fetch $20-$30, the value of the domain + a couple of unique articles.
The exceptional equation
I’d love nothing more than to own a site again that would meet the criteria of exceptional, but I guess you only get one of those per decade :-). Exceptional sites can and do go for higher multiples based on a few factors:
Age: an old site 3+ years old has more value
Page Rank: everyone loves a PR7 site, PR 6 and below though aren’t exceptional because there a plenty of sites available with that PR, where as PR 7 is difficult to obtain.
Alexa: a 3 month average better than 25,000: it’s a terrible way to measure traffic but buyers love high ranking Alexa sites. Top 10,000 is better again.
Marketplace leader: you might have a site that leads its niche, people love unique content and traffic
Traffic: 100,000 visitors per day +
I’d note though that transferability is a negative equation into this mix: particularly with blogs buyers will look at how difficult it is to take over, be that writing the site themselves or hiring someone else to do it. Niche topics and personality (vs topical) blogs can and are difficult in terms of finding a new writer.
Having said all of that though, a buyer is going to ask why is it that revenue is low in comparison to the traffic, age, PR, and Alexa stats, which is a fair call, but if they see value in it, particularly room to grow future revenue, you could see multiples as high as 40x monthly revenue. Above 40x is close to unheard of, it does happen, but so rarely as to make it an anomaly as opposed to a statistical trend.
For those interested in selling sites, I’d personally recommend Digital Point for lower end (less that $2,000) sales, and Sitepoint for higher end sales. If you are chasing a high multiple, stick to Sitepoint. If you don’t want to do it yourself, the owner of this very blog, David Krug, is the man to speak to, I know no better blog salesperson out there.