Welcome to part two of my Buying Websites Guide.
If you haven’t already read part one “everything changes, then please read that before continuing.
In todays website buying guide I will be discussing the multiples used when buying or selling websites.
Most people like to use monthly revenue multiples when buying websites e.g if a site makes $100 per month, then x8 months would be $800.
However, this really is too vague for most sites. There are way too many factors involved in the site buying process to be able to just throw multiples around.
That said, I do have a set of guidelines that I use more as basic guide than a strict set of rules. But I will share them with you anyway:
* I rarely pay more than 6-8 months for a myspace/proxy/arcade or any other low quality turnkey site.
* I also would not may more than 8 months for most automated blogs.
* I use 12 months as a guide for most sites that have a good foundation, but need more investment and time to reach their potential.
* I use 12 months max for blogs that are partially or fully dependent on the orginal owner.
* Unless Youtube is for sale, I rarely consider ANY site worth paying more than 30 months for.
Feel free to use this as a rough guideline, and compare the figures with your own valuation.
Part three of the buying websites guide is coming soon.
Midascode.
Steve Henderson says:
What value would you place on portfolios of dormant domains with legacy links and type-in traffic generating revenue at parking services like SEDO?
Maintenance cost is zero except for domain name renewal.
Capital risk is minimal unless the traffic volume immediately presale has been somehow artificially “pumped” (caveat emptor) OR if there is substantial “hope” value built in for potential as a brand name (eg Vodka.com).
I avoid domains with brand hope value because vendors typically overrate the value. Also “hope” is too risky and illiquid to tempt this coward to part with hard cash.
So excluding intangibles like “hope”, what base value would you place on “parked” domains with no maintenance?