The domain name aftermarket is dynamic. No two domain name assets are the same, and it is very difficult to accurately place a value on a domain name. Many companies do their best to offer domain name appraisal services, and this article will discuss domain appraisals and the valuation of domain names.
A domain appraisal is the valuation that is given to a domain name based on a variety of metrics. There are a number of factors that are considered when valuing a domain name.
Domain Appraisal Factors
- Monthly search volume for keyword (# of times the keyword is searched on a search engine)
- Domain extension (.com, .net, .org, .biz, .ventures)
- CPC for keyword (How much advertisers pay per Google Adwords click)
- Comparable sales
- # of other extensions registered for the keyword
- Age of domain name (when it was created)
- Current market conditions
- Marketability and brandability
Although many of these factors are quantitative, there are also qualitative factors to consider as well. Comprehensive domain name appraisals have a “human factor,” and they involve an expert in the domain market looking over the entire appraisal in order to ensure the accuracy of the appraisal.
Many domain appraisals will give a valuation range for the domain name. For instance, a domain appraisal might have a range of $5,000 – $15,000, meaning that if the appraisal is accurate, a person or company could conceivably pay anywhere from $5,000 – $15,000 for the domain name, depending on how badly they need the domain name for their business or website.
Domain name appraisals can be subjective, and because of the dynamic nature of the market, there is no guarantee that a domain appraisal is accurate or close to accurate, even if an expert in the field of domain investing is giving the appraisal.
Most companies that offer in-depth domain appraisals charge for them, although the fee depends on the service as well as the number of domain names that are being appraised.
There are some automated domain domain appraisals available, and two of the services offer a free domain appraisal. Appraisals from automated services are generally based on qualitative measures and they do not have a human looking them over to ensure accuracy. Free domain appraisals are based off of algorithms created by the owner of the appraisal service. Estibot offers an automated domain appraisal and GoDaddy recently a domain appraisal tool, which is also automated and free to use. The GoDaddy appraisal service is called GoValue.
DomainInvesting.com has written a number of articles about domain appraisals. There are discussions about how they may be used to sell domain names as well as some flaws with the domain appraisal process. There is even an article about domain appraisal scams.
Domain Appraisal Services
