If you want to sell an affiliate website business, how do you determine its worth to potential buyers?
Facotrs in Selling a Website Business.
Take a step back. Look at some of these aspects from a buyer's perspective:
Low barrier to entry.
Just about anyone can become an affiliate. Costs are low. You dont need a great deal of knowledge to get started (though being sucessful is a different matter).
Revenues and profits are dependent on the quality of work.
The money you make is dependent on the skill of the marketer(s). They need the ability to identify and exploit new market opportunities. They need to produce effective copy-written material, etc.
Unless you are taking over a business with skilled staff, you proberly won't go very far with no experience/skill. It doesn't matter if that business made $1M the year before, or $100M. Business deteriorates rapidly on the web, without the necessary skill.
The only real thing, in a profitable affiliate marketing business, is the skill/ability of the affiliate manager.
What does the business website own?
Many affiliate websites do not have any tangible stock. Many lack any property (e.g. purchased offices) or machinery (most cases, unless you throw in your old PIII).
Company Assets.
In most cases (not all), websites are effectivly "junk" sites. They only require a day, or 3, to duplicate. Often (not all), those sites do not offer any recurring visit quality (the best ones do).
What you claim to value your company assets at is debatable. But, most likely, it is probably not a lot.
Unique business value.
The only thing the company has, of value (from a buyer's perspective), is the existing web properties, copywritten materials, and current search engine rankings.
Given search engine rankings disappear over night, they are not worth a great deal. However, this is all dependent on so many factors. An important one is, "How many websites *YOU DO NOT OWN* link to the site?"
Domain names.
If you are including "widgets.com" as a part of the sale, your asking price is
justifiably a lot higher than if offering "buy-widets-somecompany.biz".
Conclusion.
Remember this, something is only worth what people are willing to pay for it.
If you find someone to buy a company for an amount exceeding its realistic valuation, enjoy your new house/car/yacht/etc.