The value of VRE, or Virtual Real Estate, is going up steadily... This is good news for those that want to sell off websites, maybe because they are changing courses or perhaps because they dont have time to monetize them properly themselves.
For a full-time internet marketer, buying an established website is always worth looking into. The price you should consider paying for a website depends on the reason you are buying. Are you buying the name or brand, the template/layout, the content... or the PageRank and inbound links? These are all things to consider in the value of a buy.
And of course, most full-time marketers have websites and domains stashed away in corners that they never get around to developing and promoting. Is selling something that we should consider... or are we stuck on the fact that we may someday, somehow, find time to complete those projects ourselves?
So where do you go if you want to buy or sell a website, or even a great domain name? Most people hit the popular forums, posting their wares on SitePoint or digging through posts at places like DigitalPoint or the Warrior Forum for good deals. You used to be able to find great deals on eBay, but lately you just end spending half a day sorting through junk replicated sites that are being sold there...
It's a bit of a gamble, in my opinion. Choosing the best place to buy/sell, getting a good price or finding a good deal, etc. It's going to take an investment of your time, that's for sure. Of course, there are communities set up to broker these types of deals, and that seems like a much more organized and professional way to go.
In fact, I was looking at one this morning called DealASite.com. 'For a limited time' (according to their main page) you can buy and sell websites and domain names there for no charge. Here's how it works:
Buyers make offers until the expiration date and at the conclusion you choose the best offer or none at all. You may list an 'Asking Price' for reference, but buyers are instructed that offers can be above or below this value.
The listings are organized by PageRank, Price Range and Topic, so it's very easy to check out the types of websites that would interest you most. They offer an Advanced Search option too, for getting more detailed. The stats for each listing include which search engines the domain is indexed in, whether the site is listed in DMOZ, the current PageRank, monthly expenses & revenue, traffic stats & more...
It's a quick and easy way to find a great deal on valuable sites/domains.
How do you determine the value?
According to EquityDomain.com, this is the formula that they use to determine the value of a website:
(12 x (net income avg.)) + (12 x (unique visitor avg X Unique visitor value)) x 1 plus the content value = high value for website.
* Unique visitor value = 1/2 the value of the top 15 bid placements on Overture for a relevant keyword
* Net Income Value and Unique Visitors Average are from the last three months
I'm not sure about the "top 15 bid placements on Overture" bit... A "relevant keyword" is a wild variable, and I am not sure if he is adding together all 15 placements and then taking half - or how that part is calculated. And of course, they dont detail how they determine the value of the content in that formula...
I've always heard that you should multiply the net income times 12, and that a website is worth at least what it nets in one year... if not two. So if you have a website that generates $300 net per month, it is worth a minimum of $3,600 (all other factors being positive).
If you have a website that doesnt earn a dime, it's worth the best offer you can get on it 😛 . With a site like that, the value is in the eyes of the buyer - in regards to what his plans are for the site, how it relates to his other projects, etc.
Your thoughts?
While I am a big advocate of keeping your business diverse and your options wide open (never putting all of your eggs in one basket)... streamlining and focusing on the most profitable projects at hand is also important.
Is it time to clean out the virtual closet? Or are you ready to invest in more VRE (sites/domains)? I'd love to hear your thoughts on this!
Technorati Tags: vre, virtual real estate, buying websites, selling websites, buying domain names, selling domain names
About Lynn Terry
I've bought and sold sites before and find that there are as many valuation formulas as there are buyers and sellers. It's not the same as if you were buying a car, where you go by the 'blue book' value.
If I were to pop over to Sitepoint and look at the sites for sale, I may look at a listing for a particular site and think it's worth about $1000. The next person who looks at it may be willing to remortgage their house to get their hands on that site.
A lot depends on the buyer and what they plan on doing with the site in the future.
It's definitely time for me to clean out my domain closet. 🙂 For the past few months, I've been combing through my site portfolio and blogfolio deciding what I need to let go of and what I should hang on to.
I've also heard that a good starting point for a domain is double what the site earns, on average, per year. Could have sworn I saw it mentioned on the SitePoint forums...
And Paul, seeing as how you're an old pro at this, I may come knocking on your door when it comes time for me to list my sites. 😀
~ Teli