How To Value Your Domain Name
As a matter of fact, successful domain names have always held far more value that what most people thought. A good domain is like a piece of digital real estate. In case you own such a piece of internet property, there may be people who are willing to pay a significant price for it.
While the chances of holding one of the most expensive domains are pretty slim (some of the most expensive ever sold domains came with an eight-figure price tag), you may be holding a relatively valuable commodity.
Domain valuation is an important step in your sales process and coming up with a monetary value is a holistic process. There is no magic formula that instantly provides you with a price, but the valuation process involves looking at several factors and understanding the marketplace.
Why the knowledge about your domains value is important?
Knowing the value of a domain that you own can make a big difference should you ever decide to sell it. In today's digital world there's a lot of money to be made by buying and selling domains. There are only so many good domains around and having a good idea of what your domain is worth can give you the upper hand during negotiations.
Businesses rely heavily on domains for advertising and brand identity and recognition. The domain is also directly associated with the company and how it does business. You can use this to your advantage and gauge how much interest your domain name really holds with a potential buyer. Your knowledge about the domain's value can help you a great deal to get the most money possible out of a transaction.
Factors That Determine Domain Value
There's a lot to consider when trying to determine the value of a domain name. IN order to perform an accurate valuation, one needs to understand the importance of these factors and how they influence the valuation.
Having great keywords in the domain name can significantly drive up the value of teh domain. To get noticed online Search Engine Optimisation, which heavily relies on keywords, plays an important role. Keywords are what people use to find new products, websites and services pertaining to their particular search queries. A keyword right in your domain name usually means the website will appear higher up on search engine rankings and therefore get higher visibility. Companies may spend significant amounts of money (e.g. Google AdWords) just to get their website noticed, which can be mitigated with a solid domain name. This is the reason why this factor is very important. The most lucrative domains have utilised and broad keywords that can easily be adapted to the needs of the buyer (e.g. hotels.com, cars.com, insurance.com). Big companies snatched these keywords up for millions of dollars and have gone out to do big things, proving that the large investments were well worth it.
Popularity of Keywords
Google Trends provides information about the popularity of keywords, how it raises adn falls over time, and the number of searches that are made for a specific keyword. When determining the value of your domain, this tool is very useful to accurately gauge where the respective keywords currently stand. While a domain may consist of a recognizable keyword, that doesn't necessarily mean it's relevant to what end-users are after. Check how popular the word is to determine how it affects the domain's overall value.
While there are numerous TLDs around, most people are only familiar with the generic ones. The instantly recognisable domain extensions, like .com, .net or .org, have been around for a long time. As a result, most people stick to URLs that end with these extensions.
Established websites with existing audiences make things much easier for anyone who purchases the domain, and as such, are increasing the domain value. If the website is monetised, the value can go up even further. It's like having a stream of passive income, so monetisation efforts are always considered when appraising a domain name.
Age of Domain
Domains that have been around for a long time have a higher valuation because they help with SEO. Search engines tend to rank long established websites higher. This however only applies if the domain has been active. Parked domains or domains that only display ads for monetisation purposes aren't as valuable. Search engines liek Alexa and Google pay attention to value-driven content, which is not in favour of parked domains. The age of a domain is also a sales argument, since websites with years of content achieve a much higher value than those that were established only recently.
Branding refers to the look and feel of a domain, which can be difficult to express in monetary term, as a domain's appeal can differ from person to person. As mentioned earlier, the domain name is going to be associated with the company or the person who buys it. A unique and attention grabbing domain is much easier to market than one that's just a string of letters or numbers. Think about how a domain name could be applied to different industries. It doesn't even have to be a real word. If it sounds good as a company name, you may find a generous buyer for it. There have been many instances where businesses changed their name to fit a domain rather than the other way aroun
Number of Characters
When it comes to URLs, short is always preferred, as shorter domains are easier to remember and handle. Unfortunately, many short names have already been registered, specially those with the TLD .com. Most buyers would rather pay more for an availabel short domain than safe money and have a new domain that's difficult to type out.
How To Appraise Your Domain Name
Now we know what makes a good domain name and now we need to start getting information on our own. The details we have discussed in previous sections are important, but theoretical. The previous section information should be used to get a ballpark estimate. In order to get more accurate date, you can employ the following methods:
Compare Your Domain with Recent Sales
Many websites, such as DNJournal or ShortNames, offer information about recent domain sales. While you can't search these sites for an exact match of your domain, you can take a look at transactions from the past few weeks. Take a look at comparable domains and how much they went for. You can use the data to compare and contrast the quality of your own domain and come up with a reasonable starting price.
See What Buyers Will Offer For Your Domain Name Right Now
There's no better wat to get the real value of your domain than to put it up for sale. This may seem a bit drastic, but it's incredibly effective. The problem is estimations will only
get you so far, Your domain's actual value is how much real people are willing to pay for it. If a domain seemingly fits all the criteria, it doesn't mean that you'll get an extraordinary price for it. While on the other side, you may think that your domain name doesn't hold much value, only to find someone who has been searching everywhere for something just like it. This technique can be a bit tricky, but there are ways to minimise the risks. You are basically going to put an ad up for your domain on a marketplace website as if you were selling it. Then you wait to see what kind of offers come in. As mentioned earlier there is a way to ensure that your domain doesn’t actually get sold, namely by applying a reserve to your listing. This reserve prevents the sale from going through unless a certain threshold is met. On domain marketplaces sites like Flippa, the reserve amount can be set quite high and be hidden from buyers. Most domain auctions last for about two weeks. During this time people will view your ad, check out your domain and make offers based on what they think the domain is worth. Because your reserve is hidden, there’s no outside influence, but just real and honest information about the value of your domain.
Domain Valuation Tools & Services
In order to get most accurate information about the value of your domain, a valuation service presents a good option for you. Such services take care of all the research for you, they make comparisons with similar domains, and they consider every factor to come up with an estimate. The reports of valuations service companies are filled with hard data, and many tools provide analytics from page views to keyword values.
Domain Valuation Services to Check Out
Estibot.com is a free domain appraisal service that provides you with some in-depth information about your domain.