Domain name valuation is more art than science!
Like most things that are for sale, a domain name is worth whatever someone is willing to pay for it. But since sellers and buyers want to have some idea of where to begin negotiations, there are some factors and guidelines that they can consider.
Comparables
A good place to start is to take a look at recent sales of domain names as similar as possible to the one you are evaluating. One good place to do that is NameBio.com. I am not affiliated in any way with NameBio.com, but I like it because it is simple to use and it seems to be updated frequently. There are other sites that provide a list of recent domain sales, as well. Just be sure to use a dependable site because getting good comparables is an important part of domain name valuation.
Automated appraisals
I’m not a big fan of these services because all things considered, domain name evaluation can be very subjective. If someone really likes and wants a domain name, they will pay whatever they think it is worth to them if they can afford it.
Still, there are some factors you can consider
To be clear, nothing is written in stone. Some factors are pretty obvious but some are more opinion than anything else. So keep these things in mind as you do your domain name valuation.
Is it a .com, .net, .org, or something else?
Even with the new Top Level Domains (TLDs), the .com extension is still king. For example, “car.com” is worth more than “car.net.” However, good .org names are sought after by non-profit organizations and country-specific buyers look for good “country code” TLDs. This does not mean that other domain extensions have no value, but they are generally less valuable than the examples above. Again, take a look at past sales and get familiar with the current domain market, and remember, domain name valuation is more of an art than a science.
Does the name have keyword commercial value?
To use the “car” example again: “car.com,” “goodcars.com,” and “goodusedcars.com” all have excellent keyword commercial value. So if you are thinking of becoming a seller or buyer of domain names as a business, it’s always a good idea to do some research on keyword values.
Length of the domain name
Shorter is usually better than longer. But don’t be too rigid about this. What if you are a manufacturer of baseball caps and no other kinds of caps; would “caps.com” or “baseballcaps.com” be better? My choice would be “baseballcaps.com” for obvious reasons.
On the other hand, if you are in the domain name business, and you can buy a 3 letter domain name at a good price, you probably should simply because they are rare and in demand. Again, domain name valuation has no exact rules so learn as much as you can and use your best judgment.
The Radio Test
This is a little common sense test. If someone heard the domain name on the radio, would it be absolutely clear to the listener so that if they typed it into a Web browser they would get it right? For example, if the listener heard the domain name “hearhere.com” there would be a problem. You might want to factor this into your domain name valuation.
What is your purpose?
Before you begin the process of domain name valuation, you should be clear about your purpose. Are you looking for a good name for your existing business or for a new business venture? Or do want to invest in the profitable domain name business? Either way, do your domain name valuation and then make a decision. And while you’re here, take a look at my domain names—I think they are really good and if you have looked at other sites, I think you will agree.
MacsDomains.com = “Good names—great prices!”
