news New Domain Name Appraisal Instrument Fills Void

Do we need another automated domain name appraisal instrument? While automated domain name appraisals have their critics, and are certainly not precise instruments, some find them useful in certain circumstances.

While some instruments like Estibot, have been around for a very long time, and the GoDaddy appraisal instrument is the most accessed, neither is perfect for all situations.

This past week Saw announced the beta release of a new domain name appraisal instrument. In this article I take you through some of the features of that instrument, along with an indication of the sort of names that are best suited to each of the main domain name appraisal systems.

Do We Need Another Instrument?

It seems to me that there are limitations in the existing automated appraisal options, providing an opportunity for a new appraisal instrument.

1. The GoDaddy and Alter instruments both max out at $25,000, making them of limited value for high-worth single-word legacy domain names.
2. The existing instruments each focus on certain factors. I think there is room for an instrument to take into account a larger number of variables.
3. None of the existing instruments do a good job at the “match across the dot” critical to evaluating most new gTLDs. Some don’t even appraise new extensions. The GoDaddy valuation tool will appraise any extension, as will Estibot, but GoDaddy values most new extensions at the same value, irrespective of the match across dot.
4. Existing instruments seem not to have adapted to the recent rise in value of .xyz.
5. Some sellers do, occasionally, use appraisals in negotiations. A documented appraisal can be helpful.

In this article I will make mention of the appraisal instruments listed in the following table. I did not consider instruments primarily intended to appraise operating website worth, as opposed to just the domain name.



I only considered instruments that had some sort of free option. Keep in mind that the paid option may provide additional information and tools – for example Estibot Essential Tools, available on the paid plans, include things like a lead generator, backlink checker and trademark analyzer.

To use Alter appraisal you need a free Alter account. At time of writing they are not accepting new users, but if you already have an account, even if you don’t have domain names listed there, the appraisal tool is still fully working.

The Saw Appraisal Instrument

The Saw Automated Appraisal tool is a beta release, so improvements are still being made. I gave the instrument a spin, looking at how it valued names that had recently sold for high prices, and also for a variety of types of other names from my own portfolio.

Using the Saw instrument is free and easy. Just enter the name, and a few seconds later get the appraised value, along with a set of bullet points.

At the time of writing the instrument will appraise domain names with .com, .net, .org, .co, .io, .xyz and .ca extensions. Other extensions will be added at a later time. You can perform 8 free appraisals per day.

For each appraisal, if you leave your email address, you receive a two-page appraisal certificate. The certificate includes the domain name, appraised amount, and bullet points supporting the valuation. It arrives promptly as a pdf file, and looks nice.

Saw, founded by Jeffrey Gabriel and Amanda Waltz, has done more than 1000 domain transactions totalling more than $500 million in combined value. Saw offers a variety of services, including both buy and sell domain brokerage.

The Saw appraisal instrument, wisely, does not try to give a precise value for domain names it deems of limited value, simply indicating <$700.

The Saw appraisal instrument rounds valuations. Clearly the precision of any automated domain name appraisal instrument is not at the dollar level, so the Saw instrument handles this better than some of the competitors that suggest valuations like $3048 rather than saying $3000.

Saw also offer, for a cost, professional appraisals by their staff.

What Factors Does Saw Appraisal Consider?

The Saw instrument takes into account 216 factors for each appraisal. They provide this overview of some of the factors:

Comparable domain sales, search volume, length, domain name extension, word popularity, and our confidential sales data.

Click to expand...

Their background of working with many clients, and the private sales data they have, helps the instrument, particularly in high-value sales in legacy extensions.

The bullet points are an indication of the factors they consider important. I tried out their instrument with the name floor.com that has a listed NameBio recent $3.144 million sale. The Saw appraisal instrument suggested a current worth of $5.06 million. Other high-value names in legacy extensions with recent sales history generally showed a higher valuation than the sales price, but in same range.

Shown below are the bullet points for that particular domain name in the Saw instrument. This provides an indication of the factors related to the strong valuation price.


I also checked valuations for the same domain name in the other appraisal instruments considered here: Estibot suggested $3.22 million, while NameWorth appraised at $4.0 million. Alter and GoDaddy both maxed at >$25,000. Estibot seems to reset appraised prices approximately to sale prices after an announced sale, which is logical.

If the domain is a common and sought dictionary word in one of the legacy extensions, particularly if registered in many extensions and aged, as a seller you probably will be pleased with the Saw appraisal. Generally the appraised values for this type of domain name are higher in Saw than in GoDaddy or Estibot, at least for the limited number of domains I tested.

XYZ

As mentioned, there is a problem with existing instruments regarding .xyz names. The GoDaddy instrument does not seem to have taken into account the changes in the market over the past couple of years. Estibot does a reasonable job on certain .xyz names, while NameWorth does not appraise anything other than .com. Alter tends to be on the low side for the .xyz extension, since they seem to inadequately value the difference between .xyz and most other new gTLDs in the current market.

I first tried the Saw appraisal instrument with some high-value recent publicly-announced .xyz sales. In all cases, Saw appraised at significantly less than the sale amount, but generally not as low as Estibot or Alter, and in most cases much higher than GoDaddy appraisal.

As an example, momentum.xyz recently sold for $69,888. The Saw instrument suggested $5000, Estibot $1700, Alter $953, and GoDaddy $711 for this name.

I also tried Saw appraisal for a number of less exclusive .xyz, some single-word and 4-letter domain names. Most of the time, these were appraised by Saw in a range around $2000 to $2500, that I considered reasonable retail valuations for the names appraised.

Some comments in the Saw bullet points will be concerning if you plan to use the appraisal certificate to support the worth of an .xyz name, however. After pointing out that new gTLDs offer additional options, the Saw appraisal instrument goes on to add that “site visitors might be wary of visiting sites that support them.” There is research that suggests some users are hesitant of most extensions outside the main legacy and their own country code. The statement is perhaps fair, but not balanced by aspects such as the recent adoption of the extension by many web3 and other businesses.

The Saw adds to all .xyz appraisals the statement “This is one of the newest Top-Level Domains.” Perhaps the intention was to say that it is a new gTLD, but I think most would read this as, of all the new extensions, this is one of the newest. That is not true, since .xyz went into general availability in June 2014, well before the majority of other new extensions currently available.

While Saw does a better job on .xyz appraisal values, I think the beta version of the appraisal instrument needs to fine tune the supporting bullet point comments. Interestingly, the appraisal also adds “little or no value” as a bullet to domain names that it values in $2000 range, the range where most aftermarket retail sales actually fall.

Brandable Names

I tried a number of names of the type commonly found in brandable marketplaces – creative spellings, word merges, two-word combinations, speakable non-dictionary terms. In most cases Saw appraisal valued these well below NameWorth and Alter, and brandable marketplace listings, supposedly because the terms are not registered in other extensions, may not be aged, and don’t have search data.

Other Extensions

I tried the Saw instrument with a few other extensions. The domain availability check seems to have a bug, and a few .io and many .ca that I tried were indicated unregistered, but clearly that was in error.

Based on a limited number of appraisals, it seems to me that Saw appraisals of .ca are about right most of the time. GoDaddy appraisal also does a good job on .ca, while Alter tends to weigh the extension inappropriately low.

In the bullet points, Saw point out that .ca is a national extension and one needs a Canadian presence to be a registrant.

They add to all country code appraisals the bullet point “Being a CCTLD the regulations and restrictions can change at anytime with minimal notice.” I think worded that way it will scare most potential buyers. While I understand the point that these are not under ICANN regulation, it seems it should be reworded. For example, in the Canadian case, the first .ca registration was in January 1988, and I know of no significant change with minimal notice in the subsequent 34 years. There is a robust and trustworthy administration of the extension, at arms length from government. To imply any day a sudden change, without prior notice, might happen is simply not correct.

My overall impression of Saw appraisal is positive. I think they provide a service in providing evaluations for high-value legacy names, and do a better job than existing instruments for .xyz. The free certificate is well implemented and will be helpful to some. The instrument seems to consider more parameters than most of the existing instruments.

I think the main thing Saw needs to improve is to fix the bug with respect to saying domains are available when they are not, and to reword some of the bullet points to make them more balanced and less alarmist.

So Which Appraisal Instrument Is Best?

I don’t think there is a clear best overall appraisal instrument. The type of name will determine which appraisal instrument is best. The following are my personal opinions on instruments suited to some of the main types of domain names. Others may well come to different conclusions.

Estibot does a good job on single word names and on multi-word phrases where the reference is to a product or service. While ranking other factors, like prior sales, they place a lot of emphasis on search volume, both broad and exact, and cost-per-click and advertiser information. Saw and GoDaddy are also good choices in this category.

For a two-word or three-word domain, I think GoDaddy does the best job, for both legacy and the major country code extensions. They split up terms flawlessly, better than Estibot or NameWorth. GoDaddy appraisal indicates the worth of each term separately, have a large database of comparable sales, and give you great comparator data. GoDaddy Appraisal tends to overvalue worthless domain names, and undervalue great names.

If you have a brandable type name, that isn’t also a dictionary word, then your best bets are either NameWorth, but it only works at the current time for .com, or Alter. The emphasis on search volume, make Estibot a far from optimum choice for many brandable names.

If you have a high-value name in a legacy extension, probably a single-word name, Saw may be your best option. If the term has great search statistics, also check Estibot, and if a .com NameWorth. The $25,000 maximum means GoDaddy and Alter are not the instrument for 6-figure or 7-figure names.

For .XYZ Saw is probably best for valuations, but I am troubled by what I view as lack of balanced perspective in the bullet points for extensions other than the big three legacy. You can ignore these bullet points, but if using the appraisal certificate, one advantage of Saw, they will be front and center. GoDaddy seems not to have adjusted adequately for the rise in .xyz, and almost always their appraisals for this extension are too low for retail.

If you are into across-the-dot match type names, particularly with new extensions, none of the instruments work well. While GoDaddy appraise every extension, GoDaddy appraise on the SLD, and all new gTLD extensions get roughly the same appraisal value for that SLD. This leads to ridiculous valuations in some cases. Estibot handle such names in a more nuanced way, although still not handling across the dot adequately.

For .CO and .IO, it depends on the type of name, but all of GoDaddy, Alter, Estibot, and Saw may be helpful.

The narrow sales base data for many make national country codes difficult, and none of the instruments are particularly good. Probably GoDaddy is the best for country code names overall. Saw is useful for .ca, if you can live with the comment about rules can change at short notice. Estibot handles a number of country codes well.

A Brief Look At Alter Appraisal

Since I did not consider Alter in my previous article on automated appraisals., I wanted to share a bit more about it. First of all, it is incredibly fast. The appraisal is essentially instantaneous.

Another nice feature of Alter appraisal is the 6-dimensional graphical representation of the basis of the appraisal. I show below the representation for one of my names. The appraised value is too high, in my opinion, but it demonstrates the factors the appraisal views as strong and weak for this name.

For TLD, Alter give .com top ranking, .net and .org a step lower, then .co and .io another step down, and most new and country code extensions yet one more step lower.

For length, they rank 2, 3 and 4 characters at highest worth level. Characters simply refers to whether alphanumeric, hyphen, etc.

Alter don’t define precisely the factors, but it seems to me from many appraisals that memorable is simply an indication of how easy the term would be to remember and write correctly.

Appeal takes into account how valued the term seems to be, probably looking at factors like search and use in corporate names, and perhaps registered extensions.

The most interesting parameter is sentiment, which is, I believe, their attempt to rate the emotional feel of the name – positive descriptors, terms like love or best or help, get high sentiment rankings.

So wonder what sort of name scores perfection in the Alter appraisal? A name like love.com.

The NameWorth Approach

NameWorth excels for business brand names, although at the moment only appraises .com domain names. NameWorth does two things that none of the other automated appraisals implement.

One of them is found in the demand section of appraisal, part of which is shown below for the floor.com domain name. On the left, it lists 126 similar websites, including their Majestic ratings. This is a handy way to gauge how many existing sites might consider an upgrade. On the right, registrations of similar domain names are given. While dotDB would provide similar information, it is handy to have it right in the appraisal.



NameWorth provides 6 different valuations for each domain, ranging from what NameWorth call the RetailLevel®, the price if someone came wanting this specific name, to LiquidationLevel®, the price if the seller needed to liquidate the same domain name within a few days. I show the information from NameWorth for one of my domain names below.





They provide a chance of selling at each price. For example, they estimate that the chance of selling at RetailLevel for this domain name would be about 18% sometime during the next 20 years. On the other hand, if I price at IndustryLevel®, about 10% of the retail price, the chance of selling goes up to 50% in the next year. One can quibble with the figures, but this way of examining how sales probability and price are related is valuable for domain investors to consider.

Final Thoughts

Keep in mind that automated appraisals are far from precise and perfect instruments. You should not base any acquisition or pricing decision solely on an automated appraisal.

Sometimes an automated appraisal can be helpful as a second opinion, it may be a wakeup call to reconsider a name you were planning to acquire, or to rethink your price for a domain name.

Just over a year ago the NamePros Blog considered this topic: Taking A Close Look At Domain Name Appraisals..

Please share your views.

• Have your tried the Saw appraisal instrument? If so, please share your experience.
• Do you use automated appraisals at all? If so, how do you use them?
• Do prospective buyers ever ask about appraisal values?
• What are your own recommendations for which systems are best for which type of names?

Thanks to Saw, and co-founder Jeff Gabriel, for the new appraisal instrument, and to all of the services noted in this article.