What determines prices of sites on Flippa?

[GameViewPoint]

I'm new here so hopefully this isn't in the wrong section.

I've been looking at sites on Flippa.com and I'm curious what it is that determines a websites price? is it simply down to the traffic it gets?

 

[serverfm]

usually it's the revenue or the revenue potential of the site.

traffic is worthless if it doesn't convert.

so usually it's a multiple of the monthly profit. an adsense site that requires little management may sell for 10x monthly profit.

if some effort is required to generate the revenue it may be less than 10 Revenue maybe 5-8.

sometimes sites sell because of the content that they have but usually it is not much. sometimes sites sell because they have a lot of traffic or some high converting traffic that has not been monetised yet. then they sell for a multiple of the expected monthly profit.

established sites that have the potential to make money for years will sell for higher multiples, short-term SEO sites etc. for a lower multiple.

there can be other reasons why sites sell: because of the backlink profile, the number of subscribers etc.

but i would say the most important factor that determines the price is the monthly profit.

 

[GameViewPoint]

usually it's the revenue or the revenue potential of the site.

traffic is worthless if it doesn't convert.

so usually it's a multiple of the monthly profit. an adsense site that requires little management may sell for 10x monthly profit.

if some effort is required to generate the revenue it may be less than 10 Revenue maybe 5-8.

sometimes sites sell because of the content that they have but usually it is not much. sometimes sites sell because they have a lot of traffic or some high converting traffic that has not been monetised yet. then they sell for a multiple of the expected monthly profit.

established sites that have the potential to make money for years will sell for higher multiples, short-term SEO sites etc. for a lower multiple.

there can be other reasons why sites sell: because of the backlink profile, the number of subscribers etc.

but i would say the most important factor that determines the price is the monthly profit.

Thanks for the info that's interesting. I have to say though it seems hard finding sites on Flippa that have high traffic that are not highly priced, even if they have next to no monetization.

 

[flipfilter]

Many sellers now use quite a complex method of licking their finger, holding it up to the wind and choosing a price

I think unfortunately, the days of buying **good** sites with decent traffic and revenue at 10X monthly net has gone.

A more realistic price to pay is around 18 - 24 months net; this isn't buying below value (although it's still possible) but it will buy you an asset that meets a sort of minimum criteria for a good purchase, typically

- Sites that are at least 12 months old and preferably two - three years minimum
- Sites with no major search penalties in the last 12 months
- Sites that have a maximum of 70% organic Google Traffic
- Sites with original, handwritten content or a unique product attached to it.

There's a presentation of a talk I did on Website Valuations at the Internet Investment Summit in Vegas on Slideshare - [ame="http://www.slideshare.net/JustinGilchrist1/valuations-in-buying-selling-export"]Valuations for Buying and Selling Websites[/ame].

Are you hoping to buy or sell on Flippa?

 

[GameViewPoint]

Many sellers now use quite a complex method of licking their finger, holding it up to the wind and choosing a price

I think unfortunately, the days of buying **good** sites with decent traffic and revenue at 10X monthly net has gone.

A more realistic price to pay is around 18 - 24 months net; this isn't buying below value (although it's still possible) but it will buy you an asset that meets a sort of minimum criteria for a good purchase, typically

- Sites that are at least 12 months old and preferably two - three years minimum
- Sites with no major search penalties in the last 12 months
- Sites that have a maximum of 70% organic Google Traffic
- Sites with original, handwritten content or a unique product attached to it.

There's a presentation of a talk I did on Website Valuations at the Internet Investment Summit in Vegas on Slideshare - Valuations for Buying and Selling Websites.

Are you hoping to buy or sell on Flippa?

Thanks for the the info. I came across flippa while researching domain names, and it got me thinking about the possibilities in my own area (apps/games), but it seems nigh on impossible to find a site which as you put it is "below value". Just in the way that it's impossible to find a used car bargain or say perhaps a good deal on ebay, all these things are analysed and only sell for exactly what they are worth and usually more than what they are worth.