There are a few steps the average consumer can take to effectively assign value or better understand the assigned value for a domain name. The domain name’s value is sometimes a vital component and requires an understanding of what makes it valuable and what to look for in a name.
For many years, domain names have been used to house Websites, Portals, Ecommerce or potentially are parked with a simple landing page and potential monetization. What is a domain name worth and how is value assigned to the domain name? We will review two metrics below to assign value in our how-to methodology.
At Name Experts, we use our own process to value domain names and specialize in the short, .com top-level domain. The .com has the longest track record of success for commercial commerce, not only in the United States, but certainly around the Globe.
The .com domain name is considered the beachfront real estate and most valuable inventory. All other TLD’s fall in line accordingly in most instances with .ORG, .NET, .US, .CO, .IO residing further and further away from the Ocean.
The Domain Name valuation process starts with the Anatomy of the domain name. The Anatomy takes into account the makeup of the domain name as outlined in Example #1:
Ex. #1 Tape.com—A four-character CVCV .com domain name that is short, Brandable and Generic
In this example, the domain name Tape.com meets or exceeds the checklist items to qualify the name as valuable. Those items include the fact that the domain name follows the”
- consonant vowel, consonant vowel pattern.
- The domain name ends in .com
- The domain name holds brand appeal
- The domain name is generic in nature
Further Domain Name Anatomy Characteristics:
- Exact Match Keyword Search Volume. Don’t get caught up in the Global Data, Use Local Exact Match for better valuation metrics.
- Competitive Landscape for Keyword based on Advertisers
- Average Cost-Per-Click related to specific Keyword
- SEO -Friendly? How hard is it to rank for Keyword?
- Popularity of Keyword
- Length of the Domain Name
- SEO History? What is the history of the Domain name?
Once you have a chance to comb through the research related to the anatomy of the domain name—then its time to stat finding other similar market comparable sales. There are a few decent resources to use to track selling history related to the domain name market. Some of the better solutions for users include both DN Journal as well as NameBio.com The market comps should always consist of recent sales occurring within the past three years. Similar to traditional real estate, we can use these fair market comps to help determine the fair market valuation of a domain name.
Sometimes, you also need to consider current popularity related to a certain segment, or keyword. Domain name values can increase if they are tied toward a trend, or specific time of the year. Political domain names can increase in popularity when an election is looming.
Which TLD’s Matter the Most?
Finding the right domain name that adds credibility and holds value is not always a simple feat. There are a few common principles to implement to assign the proper value:
.com is the top globally commercially accepted TLD.
.org (on average) 1/8th-1/10th the total value of the .COM
.net (on average) 1/12th–1/15th the total value of the .COM
.info (on average) 1/20th the total value of the .COM
.CO (on average) 1/6th-1/10th the total value of the .COM
.IO (on average) 1/8th-1/12th the total value of the .COM
In the above findings that we see in the market, these are averages and it should be noted that there are many TLDS that sell for more than a specific .COM, as it relates to certain segmented niches. A perfect example of this would be the medical field. Most reputable Health organizations operate under their relevant .ORG top-level-domain and that becomes much more valuable to that brand—more so, than the .COM.
Alternatively, the .COM becomes the beachfront real estate when the inventory meets the following criteria:
- Follows a Pattern
- Disrupts Technology
- Satisfies a Need
- Appeals to the Masses
Choosing the right domain name for your brand is a vital step in developing, growing, and scaling any business. It’s important to understand what makes the domain name valuable. Take the time to understand the Anatomy of the domain name, as well as other inventory that is selling in the marketplace.
Search market comps related to the TLD you are looking to buy. Hire an expert domain broker to help you in your navigation. A properly seasoned domain name expert can add exceptional value to your search and bring ideas that you might have thought were available.
We always welcome your feedback and encourage you to get in touch if you have a new potential acquisition, or need help valuing your domain name.