How long does traffic take to die?

[Chabrenas]

Two competitors are going belly up and selling off whatever they can. One is a business that we believe we can usefully buy completely and merge with our own (it even uses the same supplier), re-orienting the two brand names to complementary parts of the niche. When we have the stats, etc., I'll consider asking EP for a valuation in the appropriate part of this forum.

The other has sold off most of her stock, and put a note on the website that the business was closing down. She is trying to sell the domain name, but I think the asking price (GBP2,000) is out of line. The only value to me would be the remaining clients who might go to the site - which I could then redirect.

Can anyone suggest a proper approach to valuing the domain of a recently-closed business?

[Slowdive]

Only way the domain is worth that much is if its an absolute scorcher regardless of business. Secondly you mentioned the company is going under, my experience is that as a company draws closer to its death rattle customer service at every level drops so you may not even be buying good will.
How old is the domain? How many backlinks does it have? Does the site have any value in it at all? I would go and snoop around for a comparable domain and add a few hundred if you really think you may pick up leads from the dot.com. It is very hard to begin to guess not knowing the site or the niche.
However the above warning does stand depending on the industry and how long the company has been in free fall, a lot of good will may have been burned away. My feelings anyway.

[Chabrenas]

Thanks, Slowdive. The site is perhaps 4 years old and sold brand name espadrilles and a few products from the same (western Pyrenees) area, a bit higher-priced than the ones we sell, but not really high-priced fashion stuff. They also had a B&M shop in their home town. Would you agree that it is evidence of repeat orders (i.e. customer loyalty) that would provide value, not one-timers driven by Adwords? In this case there's no way they can have enough to add much to the raw domain name value.

[eddiebooth]

a lot of their traffic may come as a result of the local b&m shop, when thats gone the traffic would follow suit

[Clinton]

Can anyone suggest a proper approach to valuing the domain of a recently-closed business?

There is no fixed approach. The value of such a domain would also vary depending on the buyer and what he perceives as things he can and can't do with the domain.

A good place to start is by listing all the assets / advantages YOU see. You might as well list them here: xx visitors per day, xx backlinks to the domain etc. Then put a figure to each one and tell us how much it is worth to you.

[eddiebooth]

Valuing the site varies from person to person. If you are certain you can make a lot of money out of it then it is of more value to you than to someone who cannot see how to do this

[Chabrenas]

A good place to start is by listing all the assets / advantages YOU see. You might as well list them here: xx visitors per day, xx backlinks to the domain etc. Then put a figure to each one and tell us how much it is worth to you.

Thanks, Clinton. I'm not the person talking to the seller (that's my CA colleague who owns 90% of our business) but I'll find out whether he is still at all interested. I think we'll probably give it a miss, because the seller claims she already has an offer for the domain. We are much more interested in buying out a different complementary business whose owner has told us he wants to sell.

[Clinton]

the seller claims she already has an offer for the domain

99.99% she doesn't.

With odds like that my standard response is to call the bluff. "I'm delighted you've got a buyer. Well done. I hope it all goes smoothly. Please do get back in touch if for any reason that falls through"

[Chabrenas]

We have no use for it as a separate site. Since the business has been wound down, I doubt whether the residual customer set is worth much. I think most of their sales were Adwords-driven, but we'll see what stats she can offer.

[DomainMagnate]

99.99% she doesn't.

With odds like that my standard response is to call the bluff. "I'm delighted you've got a buyer. Well done. I hope it all goes smoothly. Please do get back in touch if for any reason that falls through"

I've used a variation of that line a few times with mixed results. In some cases there was no other buyer indeed and the seller got back to me with some excuse and a reduced price, but a few times it cost me a good site that I was ready to pay more for. So I'd say use it at your discretion, it's not always a bluff, frequently sellers do have another buyer.