How Much Is a Website Really Worth?

November 27, 2023

I met today with a small business owner (a florist) who has just paid $20,000 for an ecommerce website. The site works OK technically, i.e. customers can buy a product, checkout and pay with their credit card.

But from a marketing viewpoint, this $20,000 website is an absolute disaster. It’s a disgrace to the web company that built it (a well-known New Zealand agency, which markets itself aggressively and sucks in unsuspecting business owners).

So, how much is this $20,000 website really worth?

Well, given that its purpose is to sell flowers – the kind of product where people search online and check out a few websites before buying – I suspect the site is going to be a dismal failure.

There’s no real sales message on the home page to entice a visitor to buy flowers. The banner headline, such as it is, is almost impossible to read against a busy background. And even if you can read it, it appears to have been thought up by someone without the faintest idea of how to write an effective sales message.

Furthermore, the site doesn’t display well on a mobile phone. For $20,000, you’d expect that at the very least.

I cite this example as one of many that I come across in the course of my work. Some web companies are little less than crooks. They are charging exorbitant prices for websites that are simply not going to achieve the promised results i.e. generate enquiries, leads and sales.

Web programming has become a commodity

The reality is, the technical side of a website – the programming – is not worth much at all today. Ten years ago, it was different. But web programming has now become a commodity. There are thousands of capable web developers pouring out of universities in India, the Philippines, Eastern Europe and other countries where wages are low. (Many web companies in New Zealand now outsource to those countries and the standard or work is excellent.)

Furthermore, there is a vast selection of website templates, which will meet the needs of virtually any type of business. Thus, it’s possible to build a professional looking website, which functions well and resizes for a mobile phone, very cheaply.

That’s why, at the lower end of the web design market, you can get a site built for $1000 or less.

But you will NOT get a truly effective website for $1000!

While at one extreme, charging $20,000 for an ineffective website is a crime – at the other end of the scale, paying $1000 for an equally ineffective website is no advantage to you either.

What you can probably get for $1000 is a website that looks OK and functions well technically. But it’s not likely to be effective at selling anything.

That’s the harsh reality. A website that sells effectively, is almost certainly going to cost you more.

A website is like a blank piece of paper

Back in the days when the printing press was first invented, businesses were probably saying, “Wow, this opens up a whole new opportunity for selling things! We won’t have to rely just on word or mouth any more. We can write our sales message on paper and share it with the world!”

The same thing happened when the Internet arrived in the late 1990s. Every business was told they needed a website. But a website, in itself, has about as much value from a marketing viewpoint as a blank piece of paper.

It’s the platform on which you can write your sales message. The technology behind building a website is irrelevant from a marketing viewpoint. What really matters is the WORDS and images that are on the page. That’s what conveys your sales message!

This is where the REAL value is in a website

If you want to be hard-nosed about it, a website’s value is directly proportional to the amount of additional revenue and bottom line profit it generates for your business. So, if your website brings in $20,000 of profit per month, which you wouldn’t otherwise have had, then how much is the website worth? In that case, $20,000 would be a bargain to pay for the website. You would make it back within a month.

But if a website is going to bring in $20,000 a month, or more, it needs to have a lot of time and thought invested in writing the sales message. There’s no way around that. You won’t get that kind of profit-making website from a bunch of web geeks and techies who know nothing about marketing.

Value comes from an effective sales message

It’s one thing to build the technical platform (the website) – it’s another thing altogether to write a sales message that entices people to pull out their credit card and buy something from the website. Or, submit an enquiry form or phone you, if that’s how you are going to generate revenue from your site.

So, how much is a website really worth? The answer is directly related to the value it adds to your business. Nothing more. Nothing less.

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