What Can Affect Your Adult Website’s Valuation Multiple When It Comes Time To Sell
As you get ready to sell your website, you may have decided to either have a website audit or a website valuation to help identify any potential gaps or issues that could affect your selling price, from SEO and content to technical aspects of your site. But what factors, if not dealt with correctly, can impact the website valuation multiple of your adult site when it comes time to sell?
In this guide, Adult Site Broker will explain how valuation multiples are used to determine the potential asking price for your website and what external factors can impact its value.
How To Discover Your Website Website Value
As we have discussed before, a website valuation is a great way to understand your website’s profitability and identify areas for improvement before selling your adult site has entered your mind. Overall, it gives you a basis for making financial decisions, finding growth opportunities, and identifying new ways to maximize your website’s sales value so that when you decide to list your site, you have a clear idea of how much you can make from it.
When it does come time to sell your adult website, one of the biggest confusions you may face is understanding what price to list it for sale; you don’t want to list it at the price you originally paid for it (if you had previously bought it and have decided to flip your adult site) nor do you want to set an unrealistic asking price that stops potential buyers making an offer. So that you aren’t pulling a number out of thin air and hoping for the best, your adult website’s sales price will be pre-determined by a website valuation multiple. The three most popular website multiples to use when selling an adult website are:
Revenue Multiples: Revenue multiples are a valuation method used to determine a company’s value by multiplying its revenue. Average revenue multiples are at most 2x revenues and often less. The multiple is based on whether revenues are moving up or down.
Net Profit Multiples: This one values your adult website by directly applying a multiple to your site’s net profit. To do so, you need to work out your annual profit. Once this is done, you multiply it by a multiple, allowing you to determine what your site could sell for. Currently, websites sell anywhere between 1 to 3.5x their net profit.
Traffic Multiples: The third website multiple commonly used is a traffic multiple, which values your website by determining how much traffic it gets. This is usually applied when a site is pre-revenue based on what the traffic would sell for on the open market.
What Factors Affect Your Adult Websites Valuation Multiple
With website valuation tools, getting an accurate estimate of your adult site’s worth is easier than ever; however, you may be surprised that the forecast is lower than expected. Although this can feel disheartening, it is essential to know that in most instances, you can improve your estimate by simply fixing any mistakes that have occurred, such as gaining new backlinks for SEO, updating your website content, or using the time before the sale to find new revenue channels. But what factors can affect your adult website valuation?
Revenue: Your estimate gives you an idea of what buyers would pay for your website. They want to invest in a website that is turning a profit and has revenue coming in. So the first and most obvious factor is your past, present, and future revenue. If your income is lower (such as your adult site having few sales for a few months), this can result in a lower estimate of your website’s worth.
Net profit: The most commonly used valuation multiple is your net profit, so it is obvious that your actual net profit can be a huge factor in determining your value. A buyer wants a website that can grow and turn a profit without needing to pay too many extra costs.
Type of Adult Site: If you use a net profit multiple, then the multiple is based on whether profits are moving up or down. However, it can also depend on the popularity and demand of your adult site. For instance, fansites and cam sites are in the most demand. Paysites are in the middle. Tube sites are in lower demand, impacting your website’s overall sales price.
Age of Domain: Your website’s age can affect its valuation in multiple ways. Typically, websites with a long history and a stable earning history are more desirable than those more recent.
SEO and Backlinks: A good SEO ranking can directly affect the potential sales value of your adult site; buyers want to invest their money into buying a website with a strong SEO ranking and good backlinks, as this allows them to build on previous traffic.
Traffic Sources: The more diverse your traffic sources (such as organic search, social media, paid, or referrals), the higher your adult site’s valuation multiple.
Revenue Sources: Like having multiple sources of traffic, having multiple sources of revenue will positively affect your website’s valuation as it reduces risk.
Operations: The degree to which your business can run without the current owner can impact the value multiple of your adult site. In most cases, buyers are looking for a website that allows them to turn a profit without having to be directly involved all the time.
Transferability: Before you list your website for sale, it can be helpful to make it as easy to transfer as possible to get the best valuation.
When Is It Time To Sell Your Adult Website?
Knowing when to sell your adult site is crucial to being a good owner. Nothing lasts forever and understanding that, for your adult website to grow to the next stage, it might be best without you is a sign of a good adult site owner.
There are many reasons why many may choose to sell their adult site if it is earning a profit and gaining a steady stream of traffic. Factors like age and retirement or the fact that you want a change and need the cash flow for your next investment are why many have chosen to sell.
On the other hand, the current market growth and trends offer you an opportunity to make a profit you wouldn’t otherwise have. You may also find that over the past 12 months, your traffic and profits have declined, and you are looking to cut your losses while you still can.
No matter your reason, Adult Site Broker can help you sell your website for the best profit possible. With our free website valuation, we can help you understand areas for growth, profitability, and places to improve before you put your website up for sale. We will also help throughout the sales process, allowing you to focus on your business as the sale progresses.
Conclusion
To wrap up, when it comes time to sell your website, you can’t pull a sale price out of thin air. Using a valuation multiple allows you to determine the correct asking price for your adult site through your net profits, revenue, or, in the case of pre-revenue websites, through your traffic.
However, factors like your adult site’s previous and current growth rates, a single failure point, and its operations can all impact the final number. Knowing how to identify and protect yourself against these factors is crucial when selling your adult website.
Read more from Adult Site Broker here:
Red Flags To Look Out For When You Buy a Porn Site
How To Protect Your Adult Site From Piracy
How To Maximize Value From Your Underperforming Adult Website Before You Sell