October 18, 2024

How to Value A Domain Name

written by

Joe Uddeme

Joe Uddeme

How to Value A Domain Name

Domain Buying Guides

Name Experts provides premium
domain service to:

MAX
MAX
MAX
Hope Channel
MAX
MAX

Did you make a speculative investment in a domain name some years back and are now wondering what it’s worth? In this article, domain name specialist Joe Uddeme provides expert insight into how to accurately value what you have in your portfolio.

 

How to Value A Domain Name

Valuations can be confusing whether you are the buyer or seller. “What’s my domain worth?” is a question that many owners ask themselves. “Why are domains so expensive?”, an intending buyer may ask after seeing the price of the asset they want.

Utilizing an appraisal services tool is crucial to accurately assess the value of certain names for various purposes, such as buying, selling, or evaluating brand name changes.

We will dive deep into domain valuation and the factors that affect the value of a domain, but first it’s helpful to understand why they cost money in the first place.

 

Key takeaways

  • Domain name values rise and fall as with other asset classes
  • Accurate domain name valuation ensures both buyers and sellers leave the negotiation table happy
  • Understand what makes one domain name more valuable than the next
  • Access evaluation tools to help you arrive at a fair price

Understanding Domain Value

Domain value is a crucial aspect of the online business world, and understanding it can help individuals and businesses make informed decisions about their digital assets. Remember, values could rise and fall according to market trends and the desirability of a name to a particular buyer at any point in time.

Knowing the value of a name is essential for both buyers and sellers, as it ensures fair transactions and helps in strategizing future investments.

In this section, we will delve into the concept of domain value, its importance, and the factors that influence it – as well as offer a complete review of the best-known domain appraisal services.

What is a Domain Worth?

Domain worth refers to the monetary value of a name. It’s an estimated amount that an asset could be sold for on the market. This estimated value is influenced by various factors, including the domain’s length, keywords, and extension.

Domain worth is a critical factor in determining the value of a business, as a high domain worth can significantly enhance a business’s overall value. For instance, a memorable and relevant name can attract more traffic, improve brand recognition, and ultimately lead to higher revenue.

Why Do Domain Names Cost Money?

A domain name is an online property – and property is not free. They are scarce by design; once a person buys an asset, it belongs to them as long as they pay the renewal fees. Likewise, it costs money to maintain the vast computing infrastructure that powers the internet, and selling digital domains is a way for registrars to recoup their costs.

Expertise in buying premium domains is crucial to ensure accurate appraisals and competitive pricing, helping buyers avoid over-payment.

Why Would You Need To Value A Domain?

It is important to have an estimate of what a name is worth, whether you are the buyer or seller for any potential sale. Understanding a domain’s worth ensures that a buyer won’t overpay for an asset and a seller won’t sell their domain for a price far below what they could have gotten from another acquisition partner.

Domain name valuation helps buyers or sellers assess the worth of a domain and pay or receive a fair market price.

What Makes An Asset Valuable?

The Top-Level Domain (TLD)

The TLD refers to the last segment of a domain name that comes after the “dot” symbol (.com, .net, .ai, .co, .xyz, etc.). It plays a big role in the value of your asset due to supply and demand insight and data. For instance, .COM is the most popular option for buyers, so domains with this TLD tend to be more expensive than others with less interest. Some other TLDs also have a reputation for being expensive because of a strong market, like .ai and .io – according to current data.

Domain Length

The number of characters of an asset also affects its value metrics. The rule of thumb is that the lesser the number of characters, the more valuable the asset.

Number of Words

Similarly to length, the number of words in a name affects its valuation. The lesser the number of words, the more upside an asset has. This happens because domains with one or two words are easier to remember and thus command more brand power.

Age or Domain History

How long a domain has been owned by someone else contributes to its value. The longer the period of ownership, the higher the chances of that domain being recognizable. So, domains owned for a long time tend to command higher prices than new or short-lived ones.

Domain Popularity

If a name is already in use, the volume of the traffic on the site using it contributes to its value. High-traffic domains are more expensive because the new owner can leverage the existing traffic to drive eyeballs to their own website.

Likewise, if an existing asset has backlinks from other websites, it will command a higher price because backlinks improve search engine rankings and help generate organic traffic.

Understanding the domain marketplace is crucial for accurately estimating values and optimizing URL investments.

Availability of Alternative Domains

Can the purchaser find a similar asset elsewhere? (for instance Trucks.com > Trucks.co or Trucks.net or the .org). If the buyer can’t find a similar name somewhere else, then they may be more willing to pay a higher amount for it.

Market Interest and Characteristics

Market interest and characteristics are two essential factors that influence the names. Internet market interest refers to the level of interest in a name, which can be driven by trends, industry relevance, and the popularity of certain keywords.

Characteristics, on the other hand, refer to the attributes of the name, such as its number of characters, extension, and keyword density.

A URL with high market demand and desirable characteristics can command a higher price. For example, short, memorable domain names with popular extensions like .com are often more valuable sales due to their high demand and ease of recall.

Google search box to denote the importance of a domain name

 

How To Determine A Domain’s Value

There is no specific formula for this activity. However, there are some free tools and services to help you estimate the cost of a domain name.

1. Research Tools

The first step in figuring out how much a name can sell for is checking out the rate of similar domain names. Thus, you can use a research tool to see what similar domain names are selling for and compare them to your own. This will help you select a fair market price. Some sites are free to use while others charge a fee.

DN Journal is a good example of a platform that collates sales figures and displays them to readers for free.

Namebio, much like DN Journal does a great job cataloging recent names with an easy to use scan tool. They offered a monthly service fee for multiple inquiries.

Domain Name Wire is another free resource. You can find blog posts about notable domain sales to help you estimate what you can sell yours for.

Godaddy is a great resource to see what names may be available. They also offer a fast transfer service.

There are many others, but these a few good places to start.

2. Use An Appraisal Service

A domain appraisal service estimates the market value of a name. They appraise a domain based on many factors, including popularity, search engine ranking, social media shares, TLD, and by comparing it to similar domains.

These domain appraisal services platforms make it easy to get an educated answer on how much a domain is worth.

A free valuation tool can give you an overview of the appraisal value, such as godaddy.

3. Find Out What Others Are Willing To Pay

A more direct way to answer the question of “what is a domain worth?” is to understand the domain sales marketplace and see what others are willing to purchase it for. The easiest way to do this is to list your domain on a marketplace like Sedo and Afternic and see what offers you receive to purchase. Create cool landing pages to help drive leads. This data can help set better pricing. You can use the offers as the yardstick for valuing the domain.

Combining AI and Human Expertise

To accurately determine domain value, it’s essential to combine artificial intelligence (AI) and human expertise. AI searches can analyze vast amounts of data, including market trends, search volume, and similar domains, to provide an estimated value request. They are vast resources for information.

These automated tools can quickly process information and identify patterns that might not be immediately apparent. However, human expertise is necessary to interpret the data, consider the nuances of the domain name, and provide a more accurate appraisal.

Experienced domainers and brokers can offer insights that go beyond raw data, such as understanding the potential for future trends and the strategic value of a domain within a specific industry.

How To Increase Your Domain’s Value

There are several ways to boost the value of a domain, including:

Search Engine Optimization (SEO)

This refers to optimizing a web page such that it ranks high on search engines. You can do this by including relevant keywords in your niche and getting backlinks from other websites. If people can find your website on Google algorithms, they will click on it more often and give you higher conversions, which translates into a higher domain value when you analyze the data.

Market Your Site

You can advertise your website on appropriate venues like social media services, search engines, or even use free word of mouth for your Company. This lets people know you exist and will likely drive higher eyeballs to your domain, giving it a greater value.

Availability of Other Domains

People are less willing to pay a high price for a domain if they can get something similar for cheaper elsewhere, e.g., Cars.com > Cars.co. One way to avert this is to buy the keyword across multiple TLDs, e.g., Box.com, Box.org, Box.net, etc. This way, the intending buyer will have less leverage.

Build An Online Presence

You can create profiles on social media platforms to build an online presence. This gives your domain more brand power and, in turn, a higher evaluation figure.

Types Of Domain Name Valuations

There are three main types of domain name valuation:

Retail Pricing

These are domain names directly offered by the owners to end users with a clear use case. The end users already have something in mind to do with the domain, usually for a website, so are more willing to pay a higher sum than the estimates.

Liquid Pricing

This comes into play when domain names are being offloaded by an owner, court order, or a bankruptcy proceeding sales. The domains are typically sold as a group and are cheaper to buy because it is a fire sale. However, the chances of finding domains with liquid pricing estimates are slim compared to the others.

Liquid pricing is usually between 20% to 30% of retail pricing.

Investor Pricing

This is when domain names are offered for sale by professional domain brokers or flippers. You can find these types in an auction where you will likely bid against other people to acquire a domain. Some people may exchange domains with other Internet portfolio investors or team up to acquire a single valuable name for their domain portfolio.

Investor estimates pricing between 40% to 60% of retail pricing.

Working with Domain Investors and Brokers

Domain investors and brokers play a crucial role in the domain name market. They help individuals and businesses buy, sell, and appraise their names, leveraging their expertise to ensure fair and profitable transactions. Brokers, meanwhile, act as an expert go-between the buyer and seller of a domain name.

Role of Domain Investors

Domain investors are individuals or companies that buy and hold domain names with the intention of selling them at a profit. They often have a deep understanding of the domain name market and can provide valuable insights into the value of a domain name.

Investors typically maintain a domain portfolio as part of their business, which includes a variety of domain names that they believe will appreciate in value over time. By analyzing market trends and leveraging their experience, domain investors can identify undervalued domains and acquire them at a lower cost, with the aim of selling them at a higher price in the future.

 

About the author

Joe Uddeme is Director and Principal of NameExperts.com, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact us at: [email protected]

Subscribe for More Domain Buying & Selling Advice

Related posts

Family of people of various ages crowded around a computer as if investigating domain name services online.
What Is the GoDaddy Domain Broker Service, and Is it Worth It?

Everybody’s heard of GoDaddy, whose services include quick, cheap registration of available domain names. In this post, NameExperts.com Director Joe Uddeme explores their other services – and whether they’re the right option for premium domain name buyers.   GoDaddy is the world’s largest domain registrar, with over 90 million domain names registered and counting. Thanks to never-ending marketing, the average person likely thinks of GoDaddy when they want to buy a new domain. It’s common for people to visit GoDaddy, type the domain they want to buy, and see that someone else has already taken it. But GoDaddy doesn’t leave the user hanging– it suggests an alternative domain name or advertises its domain broker service, as seen in the image below:
Image looking over a person's shoulder to indicate anonymity when securing a domain name
Domain Privacy and Protection: How and Why to Hide WHOIS Information

If you don’t tread carefully, anyone in the world can find out who bought the web address you just snapped up. Domain name expert Joe Uddeme shares his top tips for staying out of the limelight.   In the rush of excitement that comes with securing a name – especially a desirable, premium domain name you’ve been after – it’s easy to overlook one of the most basic elements of name registration: shielding your identity. Millions of people before you have forgotten to do it – precisely because it is so easy to overlook. Or perhaps you spotted the option to stay anonymous but didn’t quite understand what it meant – or felt it wasn’t worth the cost. Here’s how to stay out of the WHOIS database when buying a domain name – and why you might want to. Key takeaways: Understanding your Domain Privacy options Discover which countries keep your name secret by default The benefits of keeping your information private How to ensure your name stays out of the picture Discover Domain Privacy FAQs   What Is Domain Privacy? Domain privacy is a service domain registrars offer customers to hide their information from the public WHOIS database. Customers pay for privacy from their registrar, which replaces their contact information in the WHOIS database with a forwarding address.   What Does Domain Privacy and Protection Do? It removes a domain owner’s information from the public WHOIS database and preserves their privacy. The WHOIS database is a vast database operated by the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN is the agency that oversees domain names, and every individual or company that buys a domain name must provide their contact information to this agency. ICANN, in turn, lists all contact information in a public database called WHOIS. Anyone can search the WHOIS database to get the contact information of a domain’s owner. Many owners are uncomfortable with their contact information being listed publicly, so they pay their domain registrars for domain privacy and protection. The registrar replaces the customer’s contact information with a forwarding or proxy address on the WHOIS database, so people can’t look up the real contact details.   Do I Need Domain Privacy? You need to pay for privacy protection if you’re uncomfortable with your email address or phone number being posted online. Many spammers and telemarketers scour the WHOIS database for the contact information of domain owners to sell them products. Domain name privacy protection prevents this from happening. People residing within the European Union (EU) don’t need to pay for domain privacy because they get it by default. On 25 May 2018, the EU passed the General Data Protection Regulation (GDPR) ruling. This ruling mandated companies serving EU residents to give customers control over their data. EU customers were granted strict data privacy under this law, so domain registrars began hiding their information from the WHOIS database by default. Many other countries have passed laws similar to GDPR, such as Turkey, South Korea, Argentina, and Brazil. The United Kingdom (UK), a former EU member, also passed a similar law. You may not need to purchase a domain name private registration if you reside in these countries. However, customers in other countries need domain privacy and protection to hide their contact information.   How Important Is Domain Protection? It is important because it lets you hide your contact information from the public view. Without this protection, your personal information will be available to anyone who wishes to find it, and malicious actors may take advantage of this freedom to target you with cyberattacks and domain name scams.   Benefits Of Privacy Protection 1. Protects Personal Information Buying privacy protection when registering a domain removes your personal information from the public eye. People won’t be able to find your contact information by looking up your domain name on the WHOIS database. Instead, they’ll see the contact information of your domain registrar, which they can’t trace back to you. 2. Minimizes and Prevents Spam Spam is the biggest problem on the internet. It refers to any irrelevant and solicited message sent over the internet, usually to advertise products or steal information via phishing. Spammers search every possible medium to harvest emails and phone numbers, including the WHOIS database. Domain protection hides your details from this database so spammers can not target you with unsolicited messages. 3. Anonymity Many people are uncomfortable with their personal information being on the internet for whatever reason. Domain privacy and protection grants you anonymity even when you control many domain names. 4. Prevents Competitive Data Mining Businesses often mine public databases for information about their competitors. For example, if you run a popular blog anonymously, rival blogs may want to discover your identity and research potentially damaging information about you. Domain privacy and protection ensures that competitors can’t trace your identity through your domain name. 5. Prevents Domain Theft Hackers often target owners of valuable domain names with phishing messages to steal their registrar login details. They do this by sending a link to a website that looks exactly like your domain registrar’s page but is actually a different web address. The end game is to log into the owner’s registrar with the stolen details and transfer their domain name to another account. Purchasing domain privacy means that hackers won’t find your contact information in the first place. You can hold onto your valuable domain names without fear of being targeted by sophisticated cybercriminals. (Check out our post about what to do if you lose your domain name). How To Get Domain Privacy And Protection When Buying a Domain Most registrars display the option to add privacy protection to your cart when you choose to buy a domain name. It’s an effective method of upselling because they know many customers want privacy. Look for “hide WHOIS information,” “domain privacy,” “domain protection,” or a similar phrase on the domain registration box and select it. Head to the checkout page and pay for the registration, privacy protection, and any other item you selected. After paying, you’ll automatically have WHOIS protection for your new domain. Add To An Existing Domain You can always buy privacy protection for a domain name you already own. Follow these steps; Log into your domain registrar account. Head to the domain management section. Click on the specific domain name you need privacy for. Open the Security tab, and you’ll likely find a button that prompts you to buy WHOIS protection. Click on the button and proceed to your checkout page to pay. Wait for some time after the payment confirmation for your registrar to update the WHOIS database information. There are dozens of domain registrars, and the steps to add privacy protection to an existing domain are similar to what we explained above for each of them.   FAQs on Domain Privacy Should I add privacy protection when buying and selling domains? Yes, you should add the option to hide domain registration info because it has many benefits. It prevents spam, competitive data mining, and potential domain theft. It also guarantees anonymity on the WHOIS database, which is desirable for privacy-conscious customers. If you are working with multiple domain names, especially high-value ones, an experienced domain consultant can ensure all of this is taken care of on your behalf. How Do You Buy A Domain With Privacy Protection You’ll usually see an option to buy privacy protection on the page where you search for an available domain. Add the privacy protection item to your cart alongside the domain name and pay, and you have successfully acquired privacy protection for your new domain. Is privacy protection available on all domains? It’s available for most domains, but there are some exceptions due to government rules. These include .US., .CA, and .FR, among others. Is there a cost to domain privacy and protection? Most registrars charge between $10 and $20 annually for privacy protection while registering a domain. However, a few offer it for free, e.g., NameCheap.   About the author Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Need help? Contact us at: [email protected]
Two professionals looking at documents to imply safety checks when buying a premium domain name
How To Safely Purchase Premium Domain Names

Almost every good domain name you can think of has already been registered – meaning you’ll need to buy it from someone if you want it. NameExperts.com Principal Joe Uddeme explains how to do it the right way.   We are living in a time when there are more active domain names than there were people alive in the 1920s. There are over 1.8 billion websites, and this doesn’t even include the ones that aren’t active. This doesn’t leave a lot of room for you to find an original domain name that will instantly connect with your market. If you want your business to succeed in the online world, you will likely need to buy a premium domain name that is already owned by someone else. Keep reading to learn everything there is to know about premium domains and how you can successfully purchase them – with or without the help of a top domain broker. Key Takeaways Understand premium domains and what they can do for your business Top tips for purchasing a high-value domain name How a domain broker can simplify and streamline the whole process   What Are Premium Domain Names and Why Do You Need One? You want your business to be successful right off the bat, and premium domain names might be the best first step. Here, we discuss what premium domain names even are and share a few tips to help you purchase them. Elements of a premium domain name Premium domain names are short, easy, and highly marketable names that are usually already bought by someone and are available for sale for a “premium” value. They are priced higher than normal domains due to a few factors: They have high marketability thanks to their unique and trendy names that are instantly recognizable by the target audience. Premium domain names tend to be shorter in length and are easier to remember. (Example: Facebook bought “fb.com” as it was used almost as much as “facebook.com”). While not on our list of most expensive domain names ever sold, it certainly commanded a high price. They have optimized keywords that are hard to find in new domain names. They usually end in the popular “.com” extension. There are a few other things to consider and a few criteria that are used to qualify your domain name as premium. The first is if they are generic or single word domain and whether they have a .com or another globally driven brand. They should also be pronounceable and meaningful and should have a desired commercial appeal. Similarly, does the name you want to have a clear path to developmental success or is it random and highly specific? A premium domain might also already have a rich-SEO history and what we call a “white-hat” SEO past. Your domain should be catchy, brandable, and most importantly – scalable. Basically, you’re looking for a timeless domain that won’t go out of style or be easily forgotten. A domain name consultant can advise here, and can prove invaluable when investigating your intended domain name’s past. When you’re looking to add a domain name to your business, it’s important to focus on some of these pointers above if you want to add value and long-term equity to your overall brand. If you plan on selling your business someday, you want to choose a name that can be resold; try and give yourself a little digital curb appeal for if the business doesn’t pan out down the road.   Why Premium Domain Names Are Necessary For Your Business While they’re more expensive, premium domain names offer a range of benefits that often match that price and provide a pay-off in the long term. The first benefit you can take advantage of is a higher reach and resonance with your audience. A memorable domain name will stick in consumers’ minds and create a more credible image around your brand. If they remember your domain name, they’re more likely to search directly for it. Check out our guide to choosing a strong brand name for your business. Premium domains will typically contain relevant keywords that are used frequently by consumers of your chosen business segment. This provides a potential pool of traffic already searching for your domain – readily available for you to access. Premium domain names are not essential when you’re first starting out and do not have a lot of capital. They are often expensive and might be a risky investment at the beginning. Once your business starts growing, a premium domain name will help take your online presence to the next level and open you to a world of new opportunities. The Name Experts team regularly helps provide detailed strategies about great business names to help your startup off the ground. Our Tips For Purchasing Premium Domain Names Buying domain names can be stressful if you do not have much experience with the process. Here are a few tips you can follow to successfully purchase a premium domain. Hire a Domain Buyer Broker with a successful track record. They will help you perform a WHOIS search easily and aid you through the process of your purchase. Make sure you get your broker to sign an NDA to protect your information. Contact the owner professionally. Keep a list of alternatives. Be honest and flexible in your negotiations. No one wants to deal with dishonest or overly-rigid buyers. Ask your broker any question that comes to your mind. Why Choose a Domain Broker for your Premium Domain Name Purchase Though this is a quick and general list, we highly suggest reaching out to an experienced broker to help you with the process. A well-established firm like Name Experts offers a full-service domain name brokerage experience for clients. With over 16 years of industry experience and a proven track record (including helping Monday.com to rebrand), we can help you buy a premium domain name your business needs to boost its online presence. We’re highly skilled at tracking down and reaching out to owners of off-market domain names, as well as negotiating the best price for our clients. Buying high-value domain names is a process, and our services ensure that you’ll get the best deal with the least fuss.   About the author Joe Uddeme is Director and Principal of Name Experts, one of the world’s leading domain name brokerage services. He has overseen domain name sales and acquisitions totaling more than $150 million and is renowned worldwide as a go-to expert in buying and selling premium domains. Contact him at: [email protected]

Why Work with Name Experts

Name Experts offers personalized domain brokerage services, assisting clients in buying or selling premium domain names with expert appraisal, negotiation, and complete transaction management while ensuring confidentiality.

Free Consultation

Some of our most
successful stealth acquisition and sales

Aid.com

Fit.com

Mine.com

GLD.com

Jeff.com

Fora.com

Nori.com

Secure.com

Guitar.com

F*ck.com

Radian.com

MetaData.com

Prize.com

Link.com

Loop.com

Programs.com

Claim.com

Quince.com

Hook.com

QXO.com

NQ.com

Rest.com

Humani.com

Max.com

Need help buying or selling premium domains?