Determining how much a domain name is worth can be a challenging, complex ordeal. But it also happens to be crucial if you’re considering buying or selling a domain name. Each domain has unique properties that help it stand out from any other domain on the internet – with some being good and others being detrimental. In this article, we’ll cover some of the pieces to keep in mind when looking at domain name appraisal.
DOMAIN NAME VALUES – WHAT’S IMPORTANT
Domain names can be considered one of the most important assets for an online business. They’re part of the face of your company or entity, and your audience is sure to engage with them in some way or another. This contributes to the value of a domain name. But this value does depend on several factors when evaluating just the domain name itself. This includes its age and popularity among users as well as its reputation and traffic from websites with relevant content. The most important value indicators are:
- TLD types - TLDs top-level domains are the main way of identifying the value of domain names in the world. The top-level domain “.com” is for commercial organizations, “.edu" is for educational institutions, and so on.
- Traffic and Revenue - it allows you to track what kind of content might be effective in attracting new leads. Domains that enjoy good traffic are typically going to be more valuable and generate more revenue.
- Name Length - the shorter the domain the more valuable it is and the less likely someone will be to misspell the name.
- Keyword Popularity – they should be very specific in a niche because they work for a business or a blog, having good keywords makes the website easy to remember and track.
- Characters, Numbers and Hyphens - if a domain contains hyphens then the value is drastically reduced, unless we are talking about a numerical niche, then numbers and hyphens are a huge advantage.
- Brand Strength and Trends - if the domain has branding potential then it could be a good one. Domain names representing trends can be valuable if the trends are predicted properly and all preparations prior to the trend are made.
- Backlinks - the more backlinks you have the higher your PageRank will be hence the value of your domain.
Let us talk about methods you can use to evaluate the worth of the domain.
1. SIMPLE EVALUATION
One approach is to do an appraisal of the domain name yourself. In order to properly evaluate a domain, you need to have an understanding of the value indicators mentioned above, along with additional research to help gauge the domain’s potential value. This method is best for evaluating the brand domain names, domain names of small businesses and domain names used as personal portfolios.
Just like selling a business or profitable entity, you should consider the pros and cons of the domain, along with the domain’s existing traffic.
It requires a lot of skill and hard work to accurately determine your domain’s value and worth. One of the most important elements in doing your own evaluation is your experience evaluating domains – the more time you spend gauging approximate values, the better you’ll be at labelling a price range. There are some factors that will help you appraise domains yourself:
- Understanding the market - In order to determine a domain’s value you must know what audience you are trying to address the same as their behaviour and needs.
- Understanding the domain name type – depending on the type of the domain name can have a higher or lower value even if the same keyword is used.
- Understanding domain name authority – number and health of backlinks can strongly influence the authority, this also influences the value of the domain. The higher the authority the bigger the value of the domain name.
- Breaking down all past domain sales – proper analysis of the history of a domain name can greatly help appraise the domain name.
One of the great resources like NameBio can help you practice domain evaluation. You can see which letters are available in your desired language and what different extensions would look like and how they have been sold through time. NameBio makes it really easy to visualize them all at once
2. PROFESSIONAL APPRAISAL SERVICES
Another approach for domain name appraisal is using a professional service. Different brokers available can assist in appraising domains if you don’t have the time or experience evaluating domains yourself. Just be aware that they will charge you for the service they are offering. A professional domain name appraisal can help you by giving you an expert opinion on a domain`s value before you buy it or sell it.
When selecting a professional appraisal service, you’ll want to look for one that has credibility, a background in evaluating domains, and ideally experience in your business industry.
Each professional service is different. Most common are scientifically-backed appraisals which include domain analysis based on several factors, such as search engine suitability, advertising effectiveness, selling or buying prospects, and selling indicators with sales of similar domains (domains that have similar value indicators), and potentially previous selling prices.
3. DOMAIN VALUATION TOOLS
Domain appraisal tool uses available statistics/metrics to estimate domain value. The TLD, domain length, age, keyword popularity, previous sale analysis, and existing backlinks are key factors when it comes to determining the value of the domain name. These tools will use this data to try and determine an accurate selling price through an algorithm.
This method can be okay for a quick domain name evaluation of value for parked domains or expired domain names that have a high number of backlinks.
Unfortunately, these tools often lack the “cognitive value” that a real person would utilize when evaluating a domain name. As a result, using this strategy can cause a domain to be underpriced or overpriced because some values require human interpretation.
While these tools will give you a calculation, their best used in conjunction with these other methods mentioned above. The Dynadot forums are also a good place to get community valuations/opinions. Members can create and share their estimates to help users buy/sell domains. NamePros is also one good source for community evaluations where you can get people's opinions.
Appraisal is the process of determining the value of a domain name. And while appraising domain names can be tricky, but it doesn’t have to be difficult. It just takes time and patience to do properly.
Domain appraisals can help companies or individuals with their decision-making process to determine whether they should sell a precious domain they’ve had parked or keep hold of their business property.
Appraisals can be helpful even when you’re looking to buy domain names on a domain aftermarket, as it may save you from overspending or help you find the true gems. Just keep in mind the various methods you have to evaluate (self-evaluation, professional appraisals, and appraisal tools), along with the value indicators, and you’ll be able to determine domain prices in no time.