How to know how much money your website is worth with KPI’s

Do you have a profitable website but feel that you’ve maxed out its potential? Are you spent working on your site that you just want to kick back, have a few beers, and unwind?

At this point, you should have considered pressing the reset button by selling your website.

A quick look at Flippa and Investors Club and you’ll immediately see people sell their websites for five-to-six figures. What’s even crazier is people buying them, either to improve its earnings to have a sustainable cash flow going forward.

investors club

Right now, you’re probably dreaming of how many six-packs you’ll buy with all that cash from selling your site. 

But first things first, you need to know the most vital question in all this:

How much does your website cost?

It all depends on your site’s key performance indicators or KPIs.

Why determining your site’s KPIs dictates its selling price

analytics

Key performance indicators are quantifiable and measurable factors that determine the success of a website.

In other words, they have a direct impact on how a website makes money. 

Since you’re planning on selling your website, you need to show how it generates revenue to appease buyers.

Some people make the mistake of measuring vanity metrics like page views, email subscribers, and the like. While they are important in determining the site’s ability to make money, what matters is the bottom line.

For instance, it’s possible for a site with over 1,000 monthly visitors to make the same amount of revenue as a site that rakes in 100,000 visitors. It’s all about what you do with the traffic you receive or the subscribers you have that matter.

And while not all websites are the same, i.e. a blog serves a different purpose than an e-commerce site, the same KPIs applies to all.

Below are the different KPIs you should measure and improve on to get the best price for your site. 

Boost revenue

Your site’s ability to turn fair-weather visitors into customers or clients will determine your site’s worth.

All other KPIs below should contribute to your site’s conversion rates. For example, the traffic your site generates must be tracked to click on your affiliate links or purchase your product. 

You can do this by tracking your monthly sales report to see your overall progress. For affiliate sales, look at your affiliate earnings from the programs you’ve joined for your site.

When computing for a site’s selling price, most people multiply their total monthly earnings by 12 to 18 months (monthly revenue x 12-18).

So, if you want to sell your site at a higher price, then you need to find ways to increase your profits. And you must sustain the revenue over time to maximize its selling price (more on this later).

Of course, you also need to consider how much you’re spending on your site that allows you to generate this much revenue. That includes the monthly expenses for the website tools you use and other costs.

Grow authority

Authority is the byproduct of your efforts in growing your site’s traffic and sales.

In doing this, you should have launched an SEO strategy if you want to drive more organic traffic to your site.

That means creating content that ranks on Google and attracts links from high-quality websites.

If done successfully, you should have high authority metrics across all boards.

Below are the factors that most buyers use when looking at a site’s authority:

  • Flow Metrics - This set of variables from Majestic deal with Trust Flow and Citation Flow. The former refers to the quality of its outbound links and how relevant and authoritative they are in relation to the site. The letter analyzes the strength of its backlinks.
  • Domain Authority - One of the oldest and most trusted authority metrics is Moz’s Domain Authority. It computes for the score that tells you the probability of a site to rank on top of organic search. The higher the score, the higher the probability.
  • Domain Rating - Similar to Domain Authority, Domain Rating provides an aggregate score for a website based on its link profile. Ahrefs, considered as an SEO tool with the largest link database in the industry, developed DR.

To analyze these metrics, you can sign up to the respective platforms to check their scores. However, you need a paid subscription to access each which could cost you a fortune.

The next best thing is to sign up to SerpWorx so you can access all three metrics in a single dashboard. But to access a site’s DR, you still need to subscribe to Ahrefs and use its API key.

Determine best traffic sources

As mentioned, traffic if taken in a general sense is a vanity metric. 

However, you need to know where you qualified visitors are coming from. Hence, you need to monitor the traffic sources that are converting.

Some visitors you receive on your site leave or bounce away the minute they enter your website. They are the reason why traffic in itself is not considered as a KPI - there are site visitors that only pad your traffic count and don’t engage with your site.

However, by zeroing in on traffic sources that refer visitors who spend time on your site browsing the pages and converting into customers, then you can scale the traffic into a KPI.

You can do this by checking Acquisition > All Traffic > Channels on your Google Analytics. The tool breaks down your traffic into the following sources:

  • Organic Search
  • Direct
  • Referral
  • Social
  • (Other)

From here, you can analyze the kind of traffic each channel attracts based on the Behaviour and Conversions columns.

analytics sell website

If Organic Search attracts lots of traffic but has low conversions, then it may not be an influencing factor in your bottom line.

But if Social converts traffic into sales no matter how high or low the total traffic is, then you must use this channel to determine the site’s value.

Age your site like wine

How old your site is may not be a KPI in the strictest sense. It doesn’t matter how fast you can turn your website into a money-making machine.

However, age becomes a factor especially if you consider brand loyalty and reputation.

Let’s put it this way:

A beverage burst into the scene with a taste better than Coca-Cola, according to some. And it could have surpassed Coca-Cola in sales at one point.

However, how long will it keep up with the most established beverage brand in the market? And how soon will it fizzle out?

The same thing goes with a website’s age. It may rake in profits now, but without longevity and tenure, people may leave and go back to their go-to site.

Therefore, you must let your website accrue age first before selling. Prove to buyers that your site is here to stay by building its brand and improving its performance even more.

Sustain your success

In relation to age, sustainability is another key factor that compels people to purchase your site.

Arguably the most important KPI of all is the site’s ability to retain the same high level of monthly revenue for prolonged periods of time.

Longevity determines whether or not you can sell your website or if anybody will buy it. Because it’s possible to make money quick by enjoying a few profitable weeks only to fizzle out the following month and never fully recover.

Sustained revenue for months, if not years, is an attractive selling point to buyers. It shows that the website has a history of proven success and won’t easily decrease its sales anytime soon.

Now, for example, if your site’s traffic recently dropped due to algorithm changes (if your main traffic source is Google) or for whatever reason, then selling your website will be a much more difficult task. 

Conclusion

Using the KPIs above, you should now have a clearer understanding on how much to sell your site.

But before you put your site up for sale, know this: 

You deserve to get the most out of your website after selling it.

So, if your KPIs aren’t up to your liking, then you may want to hold off selling it and work on your site again.

With just a few tweaks and changes, you can increase its revenue and break the bank once you site it on sites like Investor’s Club to field serious offers.

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