Website Value: How to Determine and Increase The Value of Your Website

Website Value: How to Determine and Increase The Value of Your Website

Your website value is useful information to know, especially if you plan on selling the domain for a profit. Even if you have never considered how much your website could be worth on the market, finding its value could benefit you down the line. Once you begin to think of your website as a valuable asset that you own, you can then start considering ways to invest in it that can increase its value. The more objectively valuable your website is, the more money you can sell it for on platforms like Exchange Marketplace

In this article, we’ll outline factors that you must take into account in order to find out how much your website is worth. Then, once you are able to determine what contributes to the value of your website, we’ll show you some tactics you could use to increase that value. Finding your website’s value could be the first step on a path toward you making money by website or domain flipping. Are you ready for a new side hustle? Let’s jump in! 

How to Calculate Website Value

There are several online tools, like Exchange Marketplace’s valuation tool, that you could use to calculate the value of your website. Website value is often subjective and only determined by how much money you ultimately sell it for or how much a particular person would like to buy it for. The website could be more valuable to you depending on how much it means to you personally. For example, a simple online shop you have set up to sell a single product might be making you money but is otherwise not worth much to you personally. On the other hand, a website representing your family business might have more subjective value depending on what the business means to you, so you’d want to list it for a high price, if at all. Even if you don’t plan on selling your website right away, you could still benefit from knowing what is contributing to its monetary value

Four Aspects of Website Value

1. Website Traffic Data 

The value of your website depends largely on how many people visit it. The technical term for this statistic is website traffic. The example below is website traffic data from StuffedWithLove.store, an e-commerce shop for sale in the Exchange Marketplace. On the top you can see the total number of visits to the website, and in the line graph below there is a visualization of the website’s traffic over time. A potential buyer would be interested to see this information, as it gives them an idea of how many eyes are on the website at different points in the year. Website traffic applies to all kinds of websites, not just e-commerce websites. For websites that make most of their money off of paid on-page advertising, website traffic is a crucial statistic because it determines how much money they can charge advertisers to display ads on the page, directly affecting website value.

website traffic

2. Total Revenue

Other than website traffic, total revenue is another top factor in determining website value, especially for e-commerce stores. Total revenue is the total amount of money that a website has generated in its existence. Similarly to the website traffic graph above, the total revenue graph below represents the revenue that StuffedWithLove.store has been making over time. Potential website buyers can see how the revenue stream fluctuates and get a good idea of the cash flow that the website could generate for them. It could also be helpful to check out the average monthly revenue to compare to that of other websites.

total revenue

3. Profit Margin

While it is helpful to know a website’s total revenue, the data does not include costs. Especially when it comes to e-commerce websites, there could be costs and expenses involved with running the online business. The expenses could include the cost of inventory, freelancers, or paid advertising — anything necessary for keeping the business up and running. When you subtract the monthly expenses from the monthly revenue, you’ll find a website’s profit. Then, when you divide the monthly profit by the monthly revenue, you’ll find the website’s profit margin. You can think of this data as information about how financially efficiently the business is running. A high profit margin would indicate that the website generates a lot of profit, and costs little in the way of expenses. On the other hand, a low profit margin would mean that the website incurs high costs and generates comparably little profit. StuffedWithLove.store has a profit margin of 35%, which is very efficient. The website’s current owner keeps expenses low and revenue high.

4. Social Media and Other Included Assets

Sometimes a website is more than just a website — there are other business assets connected to it that could contribute to its value. There could be excess inventory included in the sale, social media accounts, or other useful tools that the website owner uses to turn a profit. For example, if you decided to purchase StuffedWithLove.store, you would get more than just the domain name and online shop set-up. The website value includes the business’ Instagram account with over 400 followers. The sale would also include a Pinterest account, access to company logos, and a mailing list that a new owner could use to get the word out about new products. 

social media

How to Increase Website Value

Now you know about the elements that contribute to website value. You might also be curious about how to increase website value. You could be looking to boost the value of your website in order to boost your business, or you might want to get into domain flipping — purchasing multiple domains, increasing their values, then selling them at a higher price. Website flipping is similar since you’re focused on increasing the website value as well. Either way, increasing your website value will help you down the line. You can start with the following steps.

1. Get More Website Traffic

One of the most obvious ways to increase your website value is to increase the traffic going to it. This is an especially useful tactic for certain types of websites that rely solely on traffic and paid advertising to make money. If your website is a blog or forum-style website, increasing traffic to your pages will be especially useful when it comes to increasing your website’s value. 

You might want to start by doing some simple on-page SEO, or if your website corresponds to your business, you could also try updating your Google listing. Alternatively, you could do some outreach to spread the word about your website. Post about it on forums so new visitors come and check it out, or start an email newsletter so you can remind people to return to your website. There are plenty of ways to get more website traffic, but they all lead to the same result: more eyes on your pages. 

2. Reduce Expenses or Raise Prices

If your website is an e-commerce business, reducing expenses or raising prices could be the key to increasing your website value, especially if you plan to sell your business on a platform like Exchange Marketplace. Lowering the expenses or raising the prices involved with running your business will increase your profit margin, so long as sales keep up at the same rate. Your business will run more efficiently, and you’ll be able to earn more money. If and when you wish, you’ll be able to sell your website for more money too. 

There are several ways to reduce expenses for your website, but the right move to make will depend on the type of website. For example, e-commerce websites that specialize in products like t-shirts, hats, and accessories might want to consider reducing expenses by using a print-on-demand service. Print-on-demand companies can partner with you and your website to eliminate any excess inventory issues, so no money is wasted on products that you are struggling to sell. Instead of producing and stocking the inventory you think you will sell, print-on-demand warehouses will print the items for your customers as they are ordered. It’s an easy way to make sure your website is running as efficiently as possible.

If you choose to increase prices, just make sure to pick a price that most of your customers will still be willing and able to pay. Going too high will increase your profit margin, which is good, but will also reduce sales. Fewer sales will mean a less valuable website, so make sure to be cautious when employing this strategy. 

3. Advertise on Social Media

The easiest way to advertise on social media is to create social media accounts for your website and try to gain more followers. Make sure to let your customers know that you have social media accounts, and keep posting content and engaging with your followers. After a while, your social media following will bring more customers in and increase your website value.

Alternatively, while you might end up having to spend some money on it, paid advertising is a surefire way to let potential website visitors or e-commerce customers know about your website. More visitors translates to more traffic and sales, so while it may cost you at first, advertising could increase the value of your website in the long run. Even if they don’t click on your ads the first time they see them, a wide audience will be exposed to your branding and advertising content. 

Where you choose to advertise for your website depends on the type of audience you are targeting. If your main demographic is millennials, Instagram might be your best bet for advertising. If you are targeting Gen Z customers, you will probably have more success advertising on TikTok. Keep in mind that even if you are not able to afford sponsored posts on social media or advertisements on other websites, you have the option of working with influencers to promote your website and its products.

4. Wait

If you just created your website and haven’t gotten too much traffic or made any e-commerce sales yet, you’ll probably find that it is not worth much money yet. However, that doesn’t mean that that will still be the case in a few months. If you tried valuing your website on a platform like Exchange Marketplace and didn’t get the price you were looking for, it might just take some time before you’ll be able to flip the website for a profit. 

For example, e-commerce websites increase in value in the Exchange Marketplace when they make more sales. If you have a proven record of sales throughout an entire year, and can prove it by linking your Shopify account and verifying it on Exchange Marketplace, your website will likely sell for more money than it would have after just a couple of months of sales. 

Conclusion

If you have never considered how much your website could be worth, you should try using a marketplace website like Exchange Marketplace to figure out how much money someone might buy it for. Your website value, however, will come down to how much it is subjectively worth to the buyer. However, tools like Exchange Marketplace listings could help you get a ballpark idea of what that price could be. 

If the price you find isn’t quite what you’re willing to give up your website for, don’t give up on selling just yet. There could be just a couple of easy tweaks to make before you can sell at a higher price, like advertising and SEO to increase website traffic, or a reduction in expenses through the use of dropshipping or print-on-demand services. If you’ve already tried those tactics, it might just be a waiting game — after a few months your website value will increase once all of your strategies are set in place.  

Don’t just abandon your website when you no longer want to run it. Instead, determine its value and sell it on Exchange Marketplace. You might just be able to earn enough startup money to launch the new website of your dreams. 

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