Determining The Value of Your Domain Names

You’ll find many companies that are happy to assess the value of your domain name. Some offer this service free through an automated "valuation wizard" type approach, others charge a fee for a more customized, personal valuation. Fundamentally, all these appraisal services suffer from the same flaw: domain names are UNIQUE!

So while there is certainly some merit in looking at the current domain name market and trying to find "parallels" with recent sales, it’s impossible to base the valuation of one domain name on the valuation placed on another, no matter how much some domain name valuation services would have you believe otherwise.

At the end of the day, a domain name is worth exactly what a buyer is willing to pay for it, no more and no less. You could have what you consider to be the most attractive domain name in the world in your portfolio of names, yet if you don’t succeed in tracking down a potential buyer, and no such buyer presents themselves unbidden, then any discussion on the value of that particular domain is idle, since any value is latent until it is unlocked by a purchaser.

If you are still keen to have your domain name appraised, it is best if you avail yourself of a free service, since paid appraisal services (which cost from $10 upwards, with many around the $30-50 mark) may frankly cost you more than the domain name itself is worth. Also, remember that no paid appraisal service is going to tell you point-blank that your domain name is worthless, since that would guarantee that they would lose the chance of any repeat business from you!

To revisit a theme that has been brought up several times on this site already, please bear in mind that 90% of domain names are essentially worthless.

Example: Cars.com may be worth enough to retire on. SportsCars.com may be worth enough to buy a second-hand car on. PerformanceSportsCars.com may be worth a few hundred dollars. ePerformanceSportsCars.com is worth NOTHING!

This is what no appraisal system, free or for-fee will tell you: your domain name may (often) be worth LESS than you paid for it: it may be worth $ZERO.

This is especially true if you’ve had to substitute numbers for letters, like go4broke.com or if your domain name relies on multiple hyphens, like a-long-domain-name.com

You need only visit a large domain auction site such as Afternic to realize that supply FAR exceeds demand.

Of course, you can always generate value in a domain name by developing it into a website (no matter how "bad" the original domain name was). A domain name with a track history as an established site, with incoming links and steady traffic, will usually be worth more than the same site left undeveloped.

Enough of the doom and gloom – the fact remains that some domain names do have value, and some have significant value. Here are a few guidelines to help you understand the potential value of your domain name…

A) Do you receive unsolicited offers to buy the name?

If you get emailed offers to buy the domain name without it being listed for sale anywhere, that clearly shows it has SOME value to somebody. Essentially, you have a new base price when trying to establish a valuation: the amount of the unsolicited offer.

B) Is the domain name a ".com" name?

.com is still king of the domain name hill. Generally, a .com domain name will have 5-10x or more the value of the same name with any other extension. Cars.com may be worth millions – but nobody’s going to pay millions for Cars.net!

C) How long is the domain name?

Generally, the shorter the better when it comes to domain names – as long as this shortness doesn’t come through throwing away words or letters, or substituting numbers for letters. GoForIt.com is a nice little domain name, with some value. Go4It.com is worth less than that. GoFrIt.com is essentially worthless.

D) Is the domain name hyphenated?

Sometimes, hyphens help to preserve clarity, but generally they reduce the value of a domain name. Sports-Cars.com will most likely sell for less, even much less than SportsCars.com…

E) Is the domain name spelled correctly?

If there are any misspellings in the domain name, you can knock 99% or more off the price of most domain names. SportsCars.com (to wear this example a little thinner) is a nice domain name. SpertsCars.com most likely wouldn’t fetch $50. If in doubt, always consult Dictionary.com

F) Is the "thing" the domain name refers to generally a singular or a plural "thing"?

This is one of the hardest value factors to consider, given how subjective it is. Still, the effort can be rewarding. BuyTicket.com is most likely worth less than BuyTickets.com, but Chat.com is most likely worth more than Chats.com.

G) Does the domain name resort to prefixes or suffixes?

Prefixes or suffixes can REALLY hurt the value of a domain name. For example, add an "e" or "i" or "my" in front of the domain, or a "site" behind it and you’ve just destroyed most of its value. (Exceptions exist of course, such as EBay.com which is worth millions of times Bay.com, but that is because of the tens of millions of dollars poured into branding the domain name. Seen totally independently of the site/service it relates to, eBay.com is worth much less than Bay.com)

H) How many words are there in the domain? How common are these words?

Generally, the more words in the domain name, the less it is worth. But common two-word expressions are worth more (sometimes MUCH more) than rare one-word expressions. And common three-word expressions can be worth more than rare one-word expressions. Example: SportsCars.com is worth more than Semantics.com. FreeEmailAddress.com is worth more than Superiority.com.

When comparing domains with the same number of words, think of the likely audience and the commercial applicability of the domain name. Example: Cars.com is a very obviously commercial one-word domain name. Semantics.com, while having some value, doesn’t have a very clearly defined audience or potential use, and is much less commercial. Cars.com might ultimately be worth more than a thousand times the value of Semantics.com, yet they’re both one-word domain names.

Just because a domain name is in the dictionary, it doesn’t automatically make it valuable! It’s a frequent myth on many domain name discussion and auction sites that any one-word domain name must be worth thousands – WRONG!

If the domain name has no COMMERCIAL value, it generally has little or no value, period.

Example: "Gerontocracy" is in the dictionary, but you’re not going to get rich off Gerontocracy.com

Armed with the answers to the above questions, you can at least get some idea of the value of your domain name.

At one end of the scale, if you receive frequent unsolicited offers to purchase your correctly-spelled one-word commercially valuable .com domain, then you may be sitting on a real winner.

FAR off to the other end of the value scale (at the $0 point), if your domain name has 4 words in it, one of which is misspelled, you’re out of luck.

You may be feeling frustrated at this point with the whole concept of trying to establish a value for your domain name…; It’s worth persevering, since without even a ballpark idea of value, you’re going to find it much harder to locate a buyer for the name and close a deal. And if, after taking a long, hard, as-objective-as-possible look at your domain name, you come to realize that it’s not worth anything, then either:-

A) Develop a website using the domain name (this adds value to it)

B) Sigh, make a mental note that the domain name is not worth RENEWING (!) and move on to considering other domain names.

 

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