Value of a Domain Appraisal
On Labor Day, I wrote a blog post offering a free domain appraisal for anyone that was interested in getting one. As you might imagine from the number of replies, I was overwhelmed fairly quickly. Of course, my apologies to those who didn’t get a response due to time contraints.
Although I don’t believe domain appraisals are completely worthless, I don’t think they hold much value, other than being more of a guideline. I am a domain investor and I certainly don’t value domain names at the same levels end users might, unless I am going to be the end user. As the saying goes, a domain name is worth what someone will pay for it.
I don’t have experience or expertise in such a wide variety of businesses that I could give accurate insight to niche domain names. The same can likely be said about the companies that sell domain appraisals. They may be able to give an analysis of market conditions and how similar names sold, but with domain names being a unique entity, even comps aren’t all that accurate.
Some people are willing to spend more money on a domain name because a particular name gives them more authority. Others will spend more because they know the domain name will drive more business to them. There are many reasons why people pay more or less for a domain name, and every situation and domain name is different, making it impossible to give a precise valuation.
After I posted my offer, a couple business colleagues told me I shouldn’t have done it because it would be a no win situation. People tend to think their domain names are worth more than they will ever receive for them (count me in that same boat). Realistically though, a domain name is hard to put a value on, unless you are buying it for a reason and can put a value on what the domain name will bring to your business.
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