NameSilo
Bob Hawkes

Taking A Close Look At Domain Name Appraisals

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By Bob Hawkes, Mar 5, 2021
  1. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    Not wanting to be provocative, but surely that can't be always true. What about a new technology? By definition no prior sales. I think that prior sales, to the degree we know them and there are some reported, are an important criteria but not the only criteria. I think focus on any single criteria, including prior sales or automated appraisals, is problematic.

    What if my main purpose to buy a domain name is to improve traffic via SEO. Surely there are considerations other than whether a similar domain name sold for a lot that enter into how much I would pay for the domain name, such as search volumes and how much I would have to pay to purchase equivalent advertising.

    By definition most made up brandables do not have prior sales (agree sometimes similar) but daily there are many of them selling at $$$$ to $$$$$ and occasionally more.

    If domain appraising could get more accurate, and as noted with AI I think it is possible, then end users would have more confidence that they were getting reasonable value. Many businesses and organizations require some third party indication that amounts to be spent on major items are reasonable. I don't think we have that currently. More accurate appraisals, whether by experts, panels or machine learning bots, would move things forward. It is also crucial for domains as an asset class to take off with fractional ownership.

    The probable value of a name will also depend on competitive valuations. Let's say I have a great name in the .co extension. But the same term is offered in the .com and .io for just high $$$. That drags down the price I am likely to get. The converse is true if the .com will never be on market and the .io is priced at $75,000.

    Sorry to be argumentative. But needed to say what I believe. And that is that many factors are important, sometimes critically so.

    Bob
     
    Last edited: Mar 7, 2021
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  2. VadimK Iberica

    VadimK Iberica Established Member

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    Same experience here. It's simply nobody there at support for a few months. And I tried to contact them on several occasions, including recent problem to upgrade to higher membership level (which I never did at the end due to non-responce). Also back in November I was trying to contact the owner thru LinkedIn - same, no reply, althrough he accepted the invitation. I don't think someone there is ''actively behind'' now, it's seems like this platform is run by inertia...
     
    Last edited: Mar 7, 2021
  3. Mike Goodman

    Mike Goodman Established Member

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    Close enough? Previous sales? Based upon what? Inter-domainer sales? End user sales? Auction sales? All sales mixed up as reported by NameBio? What proportion of end user sales get reported? We can't even agree on that.

    You are each attempting to compare apples with oranges. Those are no comparisons at all. Aftermarket domains are used goods. Like eBay, arts markets, car boot sales, house auctions, etc etc, you'll get a good price one day, a bad price the next.

    Who put estate agent and trust in the same sentence??? (That's a joke). Truly, though, realtors/estate agents have a single method for assessing house prices. We don't. The truth is, You don't like my method and I don't like yours (generality, not specifically you the person looking at this and me writing it).
     
  4. Sutruk

    Sutruk Top Contributor VIP

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    Hi Bob. When I say "The only thing that can give you a close picture of a domain value are previous similar sales, that's a fact," I mean previous similar sales with those keywords.

    That would be obviously an exception, Bob.

    And that's another exception. You can virtually ask from $1 to $10K or whatever for a brandable or invented word. It if sounds good to the buyer and he is willing to pay whatever for that invented word, that's up to him.

    I also don't want to be provocative here, but I totally disagree with that. In fact, the only valuation of a domain value if that of its owner.
    No external valuation will say for what I am going to sell my domain. But that's the aim of the automated valuations, to make you believe that's the value of your domain.

    If that would be true and we had to believe on domain appraisals, Mr. Schwartz would have never sold a domain over $10k, never ever.
    Sure, and their third party indication will tell them that your domain is worth $10 bucks. Again, if I had to believe on the buyer's valuation of my domain names, I would never have sold them over $100.
     
    Last edited: Mar 7, 2021
  5. Sutruk

    Sutruk Top Contributor VIP

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    Previous similar sales based on the same keywords.
     
  6. Mike Goodman

    Mike Goodman Established Member

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    Not necessarily so. I repeat, this is a used goods market. Like historical art, but it is also financial assets so very like the AIM shares market in this country and the early days of Nasdaq in the USA. I really don't think there will ever be a price consensus along with a thriving domainer level of activity. The biggest single reason is that we are not pricing for one market. The auctions and wholesale are generally inter-domainer. The end user is mostly unpublished and what is has to be priced by business/industrial sector and niche within each sector. Extremely complex. More so than being a supplier in a specific market. How can any team of "experts" or an algorithm accurately decide prices in that melee?

    A true, robust and long lasting fact.
     
  7. Mike Goodman

    Mike Goodman Established Member

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    So are we talking auction, inter domainer (wholesale) or end user? I don't think your "similar sales" exist beyond your own imagination and the silly, impractical, comparisons the platforms suggest.
     
  8. Sutruk

    Sutruk Top Contributor VIP

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    Preferably and obviously, sales to end users. My own imagination does not place any sale report on Namebio or DNjournal, my mind is not so powerful, for the moment.

    I prefer to check previously sales, than automated worthless bot appraisals.
     
    Last edited: Mar 7, 2021
  9. Mike Goodman

    Mike Goodman Established Member

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    The problem with that approach, @Sutruk, is that you are assuming end user data when in actual fact the vast bulk of what NameBio publishes and we don't know what proportion by DNJournal are actually not end user sales. You are not making a case here. You are making my point.
     
  10. Sutruk

    Sutruk Top Contributor VIP

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    Only check that list for end user sales, obviously. Do not check the auction sales because those don't count for end user sale requests.
    Just go to Namebio, check for the keyword you are looking for, and then click on "Price" to order them from top to bottom. The top ones are typically sales to end users.
    Another way to do it is selecting the report by "Venue". Only check end user marketplaces. Do not check Godaddy or Namejet, as they are usually auction sales at reseller price.
     
    Last edited: Mar 7, 2021
  11. Mike Goodman

    Mike Goodman Established Member

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    I shan't be checking them for anything, @Sutruk. I don't believe they are more than marginally relevant, nor do I believe they are sufficiently accurate in sorting which are retail and which wholesale to be useful for productive purposes.
     
    Last edited: Mar 7, 2021
  12. Sutruk

    Sutruk Top Contributor VIP

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    The ultimate word about the value of your domains is yours, and nobody else. And even less from an automated bot order. Value your domains as you think they are worth, that's all.
     
  13. oldtimer

    oldtimer Do some good for humanity and the environment VIP ★★★★★★★★★★

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    It's true that you and only you can put a value on your domain, but at what point is the domaining community with their collective knowledge and experience is going to tell you that your prices are unreasonably high or that you are leaving money on the table by asking too little.

    Assuming that AI is going to surpass the collective knowledge and experience of the domaining community soon ( if not already) then it's not unreasonable to assume that AI will consider not only the metrics and factors that are usually mentioned by the domaining community when it comes to domain valuations, but that it will have the ability to consider thousands or even millions (billions ?) of other metrics and factors that our minds and our simple robotic scripts can not handle and comprehend.

    I like to see the day that AI can tell us exactly who might be interested in a certain domain name and how much is the maximum that they are willing or able to pay for it. :xf.wink:

    IMO
     
    Last edited: Mar 7, 2021
  14. Future Sensors

    Future Sensors 78% of human domainers will be replaced by robots Gold Account

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    Let's take this one more level. AI will negotiate with other AI, at that time.
     
  15. Mike Goodman

    Mike Goodman Established Member

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    That is one huge assume, @oldtimer. AI's current capabilities are being grossly exaggerated. The expectations being built up of what it will be able to do are, in my view, utterly unrealistic. It can emulate smatterings of human activity and that will improve. But reflecting complex thought processes and true decision making? Dreamworld now and for a very long time to come.

    Assuming your moniker reflects your age and especially if you are anywhere near my vintage, the two of us just ain't gonna see anything like that!!!
     
    Last edited: Mar 7, 2021
  16. oldtimer

    oldtimer Do some good for humanity and the environment VIP ★★★★★★★★★★

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    You might be right as far as having a fully autonomous AI that has reached "General Intelligence" and gained "General Awareness" and that is capable of having "Independent Judgment".

    But AI is being used by many big corporations and businesses as we speak and is gaining expertise in many different areas beyond that which humans have been able to achieve.

    Keep in mind that our knowledge increases incrementally over a very long period of time and we all have to start from zero with every new generation,

    But AI advances exponentially and is learning around the clock nonstop,

    So things could happen a lot sooner than you might think. :xf.wink:

    IMO
     
  17. jim h

    jim h Upgraded Member Gold Account

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    Thanks for sharing, Sir.

    It's really complicated to evaluate the value of domain names. Among the domain names I once sold, some of them sold for $50000. Before that, I was not so confident. But for buyers, they thought it's a very reasonable price. Though the value curve is sometimes not clear , generally accepted value standards always exist.
     
  18. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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  19. NameBuyer.com

    NameBuyer.com Top Member PRO VIP Gold Account ★★★★★★★★★★

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    Thanks Bob for the great writeup on the subject. Sorry I'm a few weeks late. I've been on here, but just haven't done a search for biix for some time.

    For the record, biix was just Soft Launched in August of 2020, so I don't believe the reference that it "hasn't been updated in a very long time" could be factually true.

    Today, we've also just released a White Label option. You can see some example sites at BetterNames.com & ProdigyDomains.com (test environment).

    I think it's important to keep in mind the number and the type of support requests that I get regularly and that the site is still in "Beta Launch" mode. Because of such, I've had to prioritize inquiries and I may not have gotten to yours in a timely manner.

    For example. I just spent over an hour this morning responding to 1 customer inquiry. This was an investor with 1000s of domains who is interested in listing them and he sent me an email today. The investor was also a "prior" NameWorth subscriber.

    What I've had to do to keep up with emails and to keep things moving is group them into categories and prioritize them.

    Taken Care of Within Hours:
    • Sales Related (biix Sales) - 100% are taken care of within hours
    • Refund related (refunds on NameWorth) - 95% are done on the same day
    Taken Care of Within 24-48 Hours
    • Customers wanting to upgrade or downgrade (NameWorth) - 95% within 24-48 hours
    • Customers having a technical issue (uploading domains at biix, or something not working at NameWorth) - 90% within 24-48 hours
    Taken Care of Within a Week
    • Advice requests for Sellers who are actively making sales on biix or current NameWorth customers - 90% within a week
    Taken Care Within a Month or Longer
    • Open ended requests. I had one a few days back that said, "I have 5 domains I want to sell, how do I get them listed and sold". I'm all for helping new people, but you need to make some level of effort. Try to sign up for an account or try to add your domains first and then I'll be happy to help if you get stuck.
    Likely Won't Get a Response
    • Requests for consultation. A couple weeks ago someone asked me to call them because they have 100 very valuable domains, which ended up being very mediocre. I'm really not interested in scheduling a call, interrupting whatever I have planned and talking on the phone about a custom plan for selling mediocre domains. I have nearly 8,000 domains of my own (many of them also mediocre), am trying to run 2 businesses and start up a 3rd so I'm somewhat short on time and I don't have the time to get on the phone whenever someone feels the whim to do so. They kept insisting we talk on the phone for their open ended session of inquiries, so I just ignored them eventually. Don't get me wrong, if a buyer wants to talk on the phone, I'll be on the phone within minutes or hours. But while I'm in a "beta" phase of releasing something, I'm not going to take a call like this. Mainly because I know it won't be the last call. This will just be the first of many requests from this customer.
    • Appraisal Confirmations from users that have no names listed at biix, and just a free account at NameWorth. For some customers who really need some direction, I've spent many hours sending detailed responses to all the various requests. But for those who aren't making an effort to sell on biix, or to spend some time looking at NameWorth results, my time has limits.
    • Repeated requests to fix something that doesn't fall in the current development timeline. If you have a good idea, I'll add it to the development queue and I appreciate that, but repeated requests for the same feature will end up getting your emails ignored. (unfortunately, I think yours fell here, even though the active request was for a support request regarding help uploading domains (mixed with a repeat request), so I apologize for that, but I had been accustomed to several of your emails before this being only about development efforts that were falling outside of my current efforts).


    Thanks for the support and for the concern. Admittedly, after the great year that 2020 was (sarcasm), I took about 6-10 weeks off in early 2021 and purposely didn't care about anything and just reflected on things. If a sale came through I would get to it the same day, or if a refund request came through, I'd try to get to it within a day (wasn't always successful). So if you wrote to me some time between January and February, you may have been disappointed.

    My time off was somewhat like this scene in Office Space.




    I think I talked to you about this via email sometime in March (or before), but you'll never get 3-4 companies to come anywhere close to agreeing on the price of domains. For many years, and probably now, KBB was the leader in car values. There were other guides out there, but no one used them.

    As far as comparing NameWorth to other services, I'm going to have a biased opinion when talking about any other appraisal service. The reason for that is because I started NameWorth after being a domain investor for over 15 years and realizing that no appraisal services worked. I never used them and despised them like many domain investors.

    The reason I didn't like appraisal services was because I would typically sell domains at 2-100 times higher than appraisal services were stating. Below are my sales via lease with the estibot estimates next to each sale. There are only 2 estimates that were in my favor out of 19! That is an accuracy of 10.5%. The other 89.5% of the time it would have lost large amounts of money for me. The biggest offenders were fluux.com which I sold via lease (below) for $15,000 in 2019, while the estibot value is $70, and PlanToGrow.com which I sold in March 2020 for $24,500, which estibot originally priced at $400, but now they've changed it to $25k after-the-fact.

    unnamed.png


    So my plan isn't to come together and start some sort of collaborative effort in determining the most accurate price. It's to become the de-facto standard for pricing domains and after the release of version 3.0 in the next 1-2 months it will either be at that quality or very close to that quality level.

    Keep in mind, NameWorth just had it's second birthday in March, and has been through several small and 1 major release, most recently in January of last year. But if you look at the sale of Recursion.com, I believe NameWorth was the only appraisal service that was anywhere close at the time. It had estimated a price of $300k with a ballpark range of $300k-600k) and the sales price was about $900k. I believe even the $300k number was 10-21 times more accurate than any competitor. The competitors have had much more time and one of them does over $3 Billion in sales per year. That is a lot higher than my budget.


    But what would it be worth to you and your customer to have a domain appraisal they could trust that closely matches your valuation? Could that reduce buyer uncertainty? I think so.

    Hi Vadim, I did receive 2 emails from you during my 8 week vacation period. Your first one looks like it corrected itself and the second one about upgrading I didn't have an easy fix for as there was some exception that was happening in this case. I apologize for the delay and have responded to both.


    This is true. You can price your domain at any level you want and that will obviously be the sales price (or no sale). But there is going to be a plane of value in which the Objective Value of your domain can be calculated. Based on the quality of the domain I can tell you that ZeroRecursion.com will not sell for the same price as Recursion.com, but it probably has some value (which is probably why it is registered). I can also predict that More.com will sell for more than GetMore.com. And both of those will sell for more than GetMoreToday.com, and YouCanGetMore.com will likely sell for less than all of the other choices.

    My suggestion, would be taking this Objective Value, and when you reach your pinnacle of doing deals, do what Rick does and get the most from the sale by maximizing the Subjective Value. Rick sold Teem.com (which NameWorth estimates at $1 million), and I think sold it for between $35k-$40k cash. But he did that with an equity agreement that totaled $972,000 or more after the company sold to a larger company.

    So my suggestion is go off of the Objective Price and say, yes this is what it is valued at, but "I really have an attachment to this domain", or "it is really worth much more to me", and float the equity idea. When a company has made nothing, negotiating future equity that doesn't exist yet may be easier than trying to double the current negotiated price, and as in Ricks case can add 25-30 times more value to the deal.

    Related to this same subject, look at the sellers of FitBit.com & Vivint.com. Both of these domains sold for $5,000 early in the founding of each company. Vivint sold for $3.2 Billion to Sunrun in July 2020 and Fitbit sold to Google for $2.1 billion in 2019. Ten million dollars would be a 0.476% equity stake of $2.1 Billion. Do you think a 1/2 percent equity would have been hard to negotiate for their ideal name? Probably not.
     
    Last edited: Apr 6, 2021
  20. Sutruk

    Sutruk Top Contributor VIP

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    Thanks for taking the time to respond with such an extensive reply.
    If it helps, I think your appraisal site is the most "accurate" from all the appraisal sites, so I will give you again my thoughts and feedback about what I would do... think about the GD appraisal, it's free and it has become a "standard" for some domain investors... now think if everybody could see your appraisals freely and without having to register.
    I think that gaining visits and "name" would make your site more popular and stronger in the long run. If it appraises domains higher (and better) than GD and Estibot, I bet your site would gain quite a nice track between domainers (and ultimately end users clicking on domainers link to the domain appraisal).
    What do you prefer, having a few registered users, or having thousands of daily visits? These are just my thoughts thinking about improving your appraisal site because I think that your appraisals are more accurate than the GD or Estibot ones (for the few appraisals that I have seen from your site).
    Just my two cents. (y)
    Anyway congrats for your appraisal site (y)
     
    Last edited: Apr 6, 2021
  21. Mike Goodman

    Mike Goodman Established Member

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    @NameBuyer.com Hi Garett, welcome back. Great to see you here and loving the news about the sites' latest developments and plans. Wishing you every success with them.

    My only comment regarding what's happening now is to suggest you try to get a part time administrator who could be trained to answer many of the simpler questions. I'm sure that could be done at a reasonable cost and would pay for itself with higher subscription numbers. Maybe over time add a FAQ or knowledge base section to each of the sites, too, whether open or restricted to subscribers only.

    You are providing a very valuable service, for which Estibot, for instance, charges a lot more. Others, similarly, only allow a small number of free appraisals then charge, most of them more than you do. You already have a reasonably generous free limit and your subscription fees are hardly testing for most people.

    On the other hand, we all have to accept that most of us are intrinsically lazy. If you can make a profit from their lazy-led questions (including my own - if somebody else will tell me I often don't go to the trouble of finding out for myself), go for it.
     
    Last edited: Apr 6, 2021
  22. oldtimer

    oldtimer Do some good for humanity and the environment VIP ★★★★★★★★★★

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    @NameBuyer.com

    We haven't communicated before, but for what it's worth here are a few suggestions:

    1- Make it possible for people to get 2 or 3 Simple and Basic appraisals without having to subscribe or create an account. In the long run this might help you get more subscribers.

    2- Offer a more detailed appraisal for those who subscribe to the paid version by including such things as an assessment of the Probability of Making a Sale in regards to different scenarios such as in a Wholesale or Retail setting and also for Short or Long Term commitments. We all have seen a lot of those domains that sell at wholesale prices in the four figures between domainers and then are sold to end users later on at retail prices in the five or even six figures. So a thorough assessment of all the inherent potentials in a domain name could create an added value to the services that you provide.

    3- Familiarize yourself with AI and find out about new ways to train your system so that it can learn the inherent value and importance of the keywords in the domain and the added value that certain keywords can create when combined together in the right order. The problem that most current appraisal systems have is that they lack these basic understandings and abilities.

    Good luck and try to stand out amongst the competition by being ahead of the times.

    (keep in mind that these are just some suggestions from the perspective of a potential future customer, ultimately you should rely on your own judgement as to what’s best for your business.)

    IMO
     
    Last edited: Apr 6, 2021
  23. Mike Goodman

    Mike Goodman Established Member

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    @oldtimer, much of what you are suggesting is already available with each assessment. I am a subscriber and find these aspects very useful in setting my own price - I don't always agree with NW's. Unless I'm missing something in what you say?

    Try the free version. It only allows a restricted number of searches per month but it's enough to get a clearer idea of what's in there. Which is a lot better than most. Don't forget to scroll. There's a lot more below the first visible screen.
     
  24. oldtimer

    oldtimer Do some good for humanity and the environment VIP ★★★★★★★★★★

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    There is a difference if you are playing chess against a computer script or if you are playing against an AI that has mastered the game.

    Unlike the AI the computer script doesn't really understand the game, it's just programmed to make certain moves without having the ability to predict and counteract your strategy.

    And that's at the heart of the issue here, if appraisal platforms start to employ AI and train it to master the domaining game (same as it has done with chess) then you would be able to have as much faith in the appraisals that you get from these platforms as the ones that you might get from the most experienced and knowledgeable domainers and brokers in the Industry.

    AI is being employed in many other Industries as we speak and it's learning to master those Industries pretty fast. The most advancements that we have seen in the domain Industry so far is that Godaddy is fixing to add the Buy Now option to its sales landers after 10 years. :xf.frown:

    The domain Industry needs to catch up with the times too specially when it comes to training AI so that it can be integrated into the existing platforms and operations.

    IMO
     
  25. Mike Goodman

    Mike Goodman Established Member

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    @oldtimer your faith in AI is quite touching. And, if I may say so, very premature.

    In fact it's too early to predict with any clarity what effects AI may have on the domaining sector but I fear it won't be in the positive ways you predict for the typical NP member. The smaller players.

    Who are going to be the first to employ and exploit it? I strongly suspect it will be the monoliths. Those big enough to directly employ the required expertise, whether directly, per project or on a consultancy basis for those already with capable development teams in-house. And it won't be for our benefit. Purely for their own.

    My own philosophy on this is make hay while the sun shines. It is shining now.

    The clouds are already on the horizon, though, with too much consolidation by big players in order, again not to help us, but to grab a bigger slice of the pie without sharing any of it. And that is the more likely way, if at all, AI will eventually be deployed.

    IMO.
     
    Last edited: Apr 7, 2021
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