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What is best way to evaluate value of website?

Discussion in 'Domain Names & Parking' started by black1411, Mar 9, 2009.

  1. black1411

    black1411 Junior Member

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    I am planning to buy over a domain that has been around for 22 months and PR 0. I was wondering how you guys recommend regarding

    1) What tools or website to evaluate the value of a domain?
    2) What criteria are the most important to consider beside traffic, PR, website age?
    3) What tools or website is the most accurate at telling you how much traffic a website is getting? Alexa is a joke in my book.

    This is my first attempt at buying a website and any advice from experienced BHW members will be very useful. Cheers.
     
  2. VSC

    VSC Junior Member Premium Member

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    Hi,

    A domain is worth what someone is prepared to pay for it ...

    ... and more helpfully ...

    The one I follow is 18 months net profit.
    You can then add premiums for traffic, if the domain is "hot" right now, have you collected emails/customer list etc ...

    Hope this helps,

    VSC
     
  3. black1411

    black1411 Junior Member

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    Ok, how do you get the data for 18 months profit? From the owner account or ?
     
  4. VSC

    VSC Junior Member Premium Member

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    Well I'm in the process of valuing a website I have for sale ... this is what they expect:

    Profit & Loss Accounts

    Sales UK
    Sales Worldwide
    Shipping Income

    MINUS

    Chargebacks
    Refunds
    Cost of Stock Sold
    Stock Storage
    Delivery & Packaging Costs
    Credit Card Processing Costs
    Customer Support Costs
    Management Costs
    SEO Costs
    Advertising Costs

    = Net Profit

    * Management costs is your time for managing the site / the customers etc. There is undoubtedly an amount of time which you do this for and if we purchased the website(s) we would have to do the same.

    They also obviously want all traffic stats.

    Now this for a site I have valued at £XXX.XXX in a hot niche with lots of traffic - it makes me £5,000 net a month.

    As well as the data above, I am adding value on the site as it has been number 1 on Google for specific search terms for 5 months consistently, and the "perfect name", all whitehat tactics.

    For smaller purchases/sales, you can probaly get away with less.

    But - the first comment I made, "A domain is worth what someone is prepared to pay for it ..." stands. I am lucky (!) that a big player wants to launch a product in my niche and I have what they want.

    If you are the buyer, pick holes in the site, traffic, anything to demotivate the seller/lower the price. Push the instant cash "in this climate", ready to buy today etc ... but be prepared to negotiate.

    How much do you want/need to site v How much they need the cash/want to get rid of the site.

    Best,

    VSC