As you prepare to sell your website, you may have decided to have a website audit or valuation to identify 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 times your adult site when it comes time to sell?
In this guide, Adult Site Broker will explain how valuation multiples are used to determine your website’s potential asking price and the external factors that can affect its value.
How To Discover Your Website’s 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 you consider selling your adult site.
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 comes time to sell your adult website, one of the biggest confusions you may face is determining what price to list it for. 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 from 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 depends on whether revenues are rising or falling.
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 factor to determine what your site could sell for. Currently, websites sell anywhere between 1 and 3.5x their net profit.
Traffic Multiples
The third commonly used website multiple is a traffic multiple, which values your website based on its traffic. This is usually applied when a site is pre-revenue, based on what the traffic would fetch in 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 cases, you can improve your estimate by simply fixing mistakes, 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 shows 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 (for example, your adult site has few sales for a few months), it can result in a lower estimate of your website’s value.
Net profit
The most commonly used valuation multiple is your net profit, so your actual net profit is a major factor in determining your value. A buyer wants a website that can grow and turn a profit without incurring high costs.
Type of Adult Site
If you use a net profit multiple, it depends on whether profits are rising or falling. However, it can also depend on the popularity and demand of your adult site. For instance, fan sites and cam sites are in high demand. Paysites are in the middle. Tube sites are in lower demand, which is affecting your website’s overall sales price.
Age of Domain
Your website’s and domain age can affect its valuation in multiple ways. Typically, websites with a long history and a stable earnings record are more desirable than newer ones.
SEO and Backlinks
A strong SEO ranking can directly affect your adult site’s potential sales value. Buyers want to invest in 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
Having multiple sources of traffic and revenue will positively affect your website’s valuation by reducing risk.
Operations
The extent to which your business can operate without the current owner can affect the multiple on your adult site. In most cases, buyers are looking for a website that allows them to profit without being directly involved.
Transferability
Before you list your website for sale, it can be helpful to make the transfer process as easy 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 people may choose to sell their adult site if it is profitable and generating a steady stream of traffic. Factors such as age and retirement, or the desire for a change and the need for 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 profit that 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 identify areas for growth, profitability, and improvement 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 helps you determine the correct asking price for your adult site based on your net profits, revenue, or, for pre-revenue websites, traffic.
However, factors such as your adult site’s past and current growth rates, a single failure point, and its operations can all affect the final number. Knowing how to identify and protect yourself against these factors is crucial when selling your adult website.
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