Domain Valuation Guide: How Much Is Your Domain Really Worth?

Do you own a domain name but aren’t sure exactly how much it’s worth?  There are a lot of metrics that determines the value of your domain.

Forget 1 or 2 key factors and this mistake may cost you thousands of dollars in sales. Small mistakes add up to big losses in the long run. So here’s a few general guidelines to valuing your domain portfolio.

Reseller Prices

Reseller prices is the general guideline as to what you could quick flip your domains for via forums and domain investors. This is the industry bottom market price but it’s still a price floor so respect it.

  • 3 letter domains: $5k
  • 4 letter domains: $60
  • 5 letter domains: $20
  • 6 letter or more: reg fee
  • 2 words: $500 or less
  • 3 words: $179
  • 4 words: reg fee unless high CPC niche like weight loss or insurance

Where to find domain resellers?

End User Prices

The average end user sale is around $1,800 according to Sedo. The prices below reflect my personal opinion and experiences with domains. Feel free to leave your comments and opinions in the comments.

  • 3 letter domains: $10k to $100k
  • 4 letter domains: $4k to $5k
  • 5 letter domains: $1k to $2k
  • 6 letter or more: $500 to $100k
  • 2 words: $2k to $300k
  • 3 words: $150 to $1,000
  • 4 words: $20 unless high CPC niche like above

Where to find end users?

Refer to my past article on 10 ways to find end users to locate even more potential buyers.

Compare Past Domain Sales

Another way to value your domain is to look at recent past sales for similar domains. Here’s a few tools for checking out recent sales:

Domain Valuation Factors

I’m sure there is literally hundreds of valuation factors but I like these the most. If you agree or disagree, then state your opinion in the comments.

Length

One of the biggest keys in a domain’s value is length. The shorter the domain, the greater the value on average. If you check out the top 10 domain sales, you will notice a common trend: they are pretty short. Around 4 to 5 characters.

If you think about the most popular websites online (Google,Facebook,Twitter,), they are pretty short domains. This is not by accident. People forget long names. That’s why nicknames are so popular.

Which would you remember best:

Jay Z or Sean Carter?

There’s also scientific proof that companies with shorter domain names make more money. Of course, there are plenty of companies with longer domains that make a lot of money.

That is not my point.

The point is shorter domain stay on your visitor’s radar longer. Have you ever searched for an article on a website but couldn’t remember the domain name?

It’s all too common for most people, including myself. Shorter domains solve this problem. Educate your potential buyers about this problem then pitch your short domain as a solution.

TLD extension

Top level domain extension is what comes after the dot.

Generally, .com domains are the most valuable but many companies seek out alternative extensions like .org, .net, .info or even a specific ccTLD aka county code top level domain.

Refer to DailyChanges to get a quick overview of the supply-demand occuring in the domain industry.

ADAD

The general order in value from greatest to least is:

  • .COM
  • .NET
  • .ORG
  • .INFO
  • .BIZ

Most domainers recommend buying the .com but don’t let this false belief stop you from making some nice sales. Plenty of companies buy other extensions to save a lot of money upfront. .INFO domains are often 1/10th the cost of the .COM version yet still rank just as high in Google. If you find a good keyword domain in another extension, you can still flip it and make money. Here’s a prime example of how to flip non .com domains.

However, new TLDs are coming in late 2013 and could have huge changes on the industry. Opinions are mixed. Some even say .COMs will be MORE valuable.

Check out this video clip:

ccTLDs

This is one area where the options are endless because we live in a world with 200+ countries. A smart way to look at country code TLDs is to refer to the top countries by internet usage.

Africa and Asia is experiencing amazing growth, and they are opportunities to register AMAZING domains in countries like:

  • Nigeria
  • India
  • Brazi
  • Philippines
  • etc

If you live in a country outside of the USA, you have a unique opportunity to gain traction in a less saturated market. United States is super competitive when it comes to domains. Many medium to large-sized companies spend $X,XXX or more monthly with marketing firms that supply them domains.

Now, contrast this with a country like India. Many companies in India need domains and there are plenty of nice .IN domains available just waiting to be snatched up.

Number of Words

Great domains contain words and letters that are meaningful. The fewer words, the better. The difference in value between Insurance.com and InsuranceWeekly.com is staggering. Unfortunately, you have very little chance of owning a 1-word domain nowadays. Veteran domainers like Rick Schwartz bought dozens of 1-word domains back in the late 90′s.

But….

Merriam Webster adds new words to the English dictionary every year. If you follow the news closely, you will pick up on recently popular terms like TwerkingTebowing, and SWPL.

Just forget about owning Loan.com. Not going to happen unless you sell enough domains to become a millionaire :)

Two Words

This is a sweet spot because end users LOVE LOVE LOVE 2 words domains. They sound good and add lots of value to their business. This should be your sweet spot when buying and flipping domains. Also, try to hand reg 2 words domains too. Use Namestation if you need to discover some good ideas.

A good way to generate some 2 word domains is through GEO + Keyword.  Think Niche! It’s unlikely that AtlantaApartments.com is available. It’s too broad. Try registering BuckHeadApartments.com or find another smaller city within a metro city. Godaddy has a GEO finder tool that makes this process simple.

Three Words

Lots of companies use 3 word domains but I think they are too long and ugly. They only have 1 good use: lead generation. If you own SeattlePaintingCompany.com, then an end user could generate some BIG MONEY leads and direct them to his main website, JohnsonsPainting.com. Otherwise, 3 word domains suck. Great for lead generation. Terrible for direct traffic and branding.

Could you image Pepsi.com changing their name to SodaPopDrinks.com?

Exactly.

Should you buy and flip BostonDentalSurgery.com? Yes.

Should you buy and flip BestTorontoSchool? No.

I’ve sold a few 3 to 4 word domains but you’ll need to flip 5 to 10 longer ones to earn the same amount as 1 shorter domain sale. Work smarter, not harder.

Google Searches

If you type in your domain’s keywords into Google and see a bunch of ads, then that means advertisers are spending money to show up on page 1. These companies often never rank organic for free in Google so they pay for traffic. If you see ads, then open Google Adwords Keyword Tool and see how many Local Broad Match Searches your keywords get.

Pagerank

Most hand registered domains lack Pagerank but you may buy a domain on a forum or Sedo and try to flip it. If your domain has pagerank, it’s worth a lot more.

Digital Point Forums is one of the biggest resellers of pagerank domains and they sell for $30+ even if the domain is aacasdcafwefwf.com. Pagerank domains is another reseller with much higher prices.

It’s really easy to buy pagerank domains for $1 using Godaddy coupon codes then resell them for $30+. 1 or 2 sales per week could bring in an extra $300+ income to help you acquire some nice 2 word or shorter domains.

Domain Authority

Another SEO metric is called Domain Authority aka DA. Domain Authority is an algorithm that determines how likely a domain will rank higher in search engines. If you hand reg a domain, it may already have domain authority without your knowledge.

DA domains sell on Digital Point as well for $30 to $500+. A lot of domainers liquidate their portfolio on NamePros and DNforum for a few bucks each when the domain is worth at least $50 to an SEO client. It’s important to consider how easily an end user will rank in Google with your domain name.

Use Push2Check to quickly check these metrics all at once.

Domain Age

The WhoIS birthday of your domain determines the age. Older domains are generally worth more than newer ones on average. Age is important because it means someone before you thought the domain was valuable enough to purchase. It’s an excellent signal to show a potential buyer. He’ll own an aged domain that has years of trust behind it. His website will rank high in Google and send him more traffic, leads and sales.

Don’t sell the age itself. Sell the benefits of the age like more traffic, higher rankings, and more money while savings tons of cash on advertising costs.

Commercial Value

The commercial intent says a lot about a domain name. Product domains sell for more because an end user can setup a store and sell products easily. You need to figure out whether your domain will attract browsers or buyers.

  • SoccerShoes.com attracts buyers
  • SoccerTips.com attracts browsers

When you own a product or high commercial intent domain, make sure you receive at least $X,XXX for your domain. You’ll get lowball offers but be patient. I bought a product domain for $150 and flipped it for $6,000 because I was super patient. Lowball offers came in every week but I waited until the right buyer comes along.

Expiration Date

Lastly, your domain costs you annually so remember to factor in annual registration fees into your domains. If you bought the domain for 2 years in advance, then it’s worth an extra $15 for the reg fees. It seems small but can add some value to your sales. An end user would value a domain registered 5 years in the future more than domains that expire in the next 30 days.

Never try to look desperate because appearing weak is a sales destroyer in this industry. Show strength even if you have to fake it.

The Idea

The one metric that cannot be quantified is the idea behind the domain. Ask plenty of questions to discover the idea behind the buyer. This gives you clues on how much to price the domain at. Target people with big ideas because big ideas usually means big money.

Conclusion

You probably have lots of questions now and that’s perfectly normal. It takes time to get good at valuing domain names.

There is a learning curve to flipping domains. No, it’s not electrical engineering but it does take some skill!

Related posts:

Find Your Domain Now
Find a domain name now!
 
.com .us .biz .info .net .org .ws .mobi .me .co.uk .in .at .asia 

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