You hear quite often that domain names are similar to traditional real estate. There are many similarities and differences in the two. Domain Appraisals are vitally important to both buyers and sellers and should be completed by experienced domain name experts. Domain name values are extremely volatile with domain names ultimately worth what someone is willing to pay on the asset.
Domain appraisals help owners understand the value and should be manually performed to accurately gather data points relevant to the current market conditions. The appraisals should also base values on current market comps. That is, comps that are no more than 24 months old. You can be a startup entrepreneur looking for domain names for your new venture, or an established business who has been approached by a seller offering a domain name that’s related to your brand. Or you can be a domain investor with a vague idea of the worth of your domain and are worried about not selling for the right price.
Before you think of selling or buying a domain name, it is important to know its true worth. At Name Experts, we offer domain appraisal services to help clients understand how much they can buy or sell their domain for. While it may be true that the value of a domain name ultimately depends on what the buyer is willing to pay, there are other factors that determine the price of a named asset. Some of these factors include:
Domain Appraisals: Key indicators
Comps – review names that have been sold previously that are similar to your domain name. Check out NameBio.com and DNJournal.com
.com is king – everything else plays second fiddle. Know the value of your TLD. Know how to price additional TLDs, based on the value of the .com
Keyword – Understand the keyword value, Cost-per-click, and competition around the keyword.
History and backlink profile – is the history of the URL clean?
Number of search results – how many searches are conducted per month on the search engines?
Generic and brand appeal – how likely is your brand to be remembered, or hold value?
SEO Commercial Interest – how competitive and aggressive is the SEO around the keyword?
Length of the domain – shorter is always better for value and long-term equity.
Spelling – is the domain name hard to misspell?
Industry Targets – how many leads can you market the domain name to?
Marketability – how marketable is the domain name?
Market Trends – how favorable is the market?
Timing – how is the timing? Time of year? Maybe a company just got a funding round?
The domain name valuation process should cross-reference all criteria and dig deeper into the anatomy and history of the URL. Deeper research around the asset can help add value to your brand. It’s also important to review the three types of domain buyers:
A domain name’s web ranking, age, its likelihood for a Google penalty or Facebook ban, etc. are determinants of its value. There are many automated appraisal tools, but very few of them are accurate because there is no accurate way to calculate a domain name’s exact value. An experienced domain appraisal expert takes into account multiple factors, including the industry that’s likely to benefit most from the name, advertising effectiveness, and current trends before offering a detailed report to their clients.
At Name Experts, we have been working in domain name valuation for many years and have helped hundreds of clients get the most out of their investment. Contact us if you’re a buyer and are looking for a domain name in the aftermarket. Call us if you are a domain investor with a name asset profile – we’ll assess the monetary value of every web address name in your portfolio.
We know every web address is different and so is its web worth. Our experts perform domain name valuation for all of your individual websites so that you are more than prepared for negotiations.
Types of Domain Name Valuations:
There are three types of domain name valuations or price points that are outlined below:
- Liquid pricing.
- Investor pricing.
- Retail pricing.
Let’s dig deeper into each level of pricing:
Liquid Pricing – Domain names are being unloaded by an owner, bankruptcy, or court-filing. They are typically sold in a lot—or as a portfolio. Most of the liquid inventory is sold by private companies or independent domain brokers. Liquid pricing is usually 20-30 percent of the total retail price. There are very few opportunities in the marketplace around the liquid pricing structure.
Investor Pricing – Domain names that are offered by domainers, typically looking to turn-over inventory. Most investor-priced domains could be acquired via Auction or directly between domainers in the space. Sometimes, domainers trade with other investors or become partners on certain domain names with other like-minded domainers. Investor pricing is usually 40-60 percent of retail.
Retail Pricing – Domain names that are offered by domainers, to end-users. These buyers are typically the ones that benefit the most from owning the digital real estate. They have a clear use, and understanding for the URL, and have conducted due-diligence and effective research on the opportunity.
Domain Appraisals can be used for Negotiation, Tax/Estate Planning, Divorce Proceedings, Business Valuations, Asset Diversification and many other uses. They are valuable pieces of information that will help you not leave money on the table.
What are you waiting for? Contact us for a domain name appraisal and remove the guesswork in predicting your domain’s true value!