Pricing Your Domain Name Like a Traditional Business

I recently read a blog post where someone had asked if selling a domain / website for 12 times the monthly revenue was typical. The respondent said that he had never “been that lucky and wanted to know what the secret sauce was.” I can tell you as someone who sells and has sold domains and websites, that the real question is ” do you want to sell at wholesale cost or retail cost?”  It also might depend on how badly you need some money.

If you are selling a website and not just a domain, one strategy is to price your domain like you would price any other business. If your business had no revenue, it would be hard to see it for any real money, unless you had other assets to go with it. In the case of a domain, assets could include branding collateral, such as logos or websites that the buyer could use to build a brand with the domain. When selling a traditional business, there are also several methods of valuation, but a common one is “x” times annual revenue, and the “x” is the negotiating point. If you were selling a website for 12 times the monthly revenue, you’d have to ask yourself why you don’t just want to wait it out and keep the money.

The websites that I have sold most recently have been in industries that were decreasing in popularity or projected to decrease, so I wanted to sell while they were still hot. Also, I had – in every case – made great money on the sites, mostly on autopilot. Most of the websites I have sold for greater than 12 months of revenue, because I was not selling in distress, and I know a year can go by quickly.  If you need short term money, one thought is to talk to someone you trust, and show them the revenue stream from the site/domain and secure a loan based on them getting those payments until it is paid off. And you should want to pay them well since they are helping you keep your income stream long term.

If you – for whatever reason – need some quick cash, you can sell a domain for whatever you can get for a quick sale, but I recommended doing that as a last resort. It’s no different than someone selling real estate for a quick return; they will never get top dollar.