The perceived value of individual domain names is one of the most talked about subjects within the domain industry. Domain valuation is also one of the most difficult skills to successfully master, with a combination of sales data and experience often necessary to accurately determine a domain’s worth.
In this edition of our Expert Exchange, we ask our panel of industry leaders:
Nat Cohen (@Telepathy), Owner of Telepathy.com
Shane Cultra (@Domain Shane), Domain Investor & Publisher of DSAD.com
Frank Schilling (@Frank.Schilling), CEO of Uniregistry
Giuseppe Graziano (@Giuseppe Graziano), CEO of GGRG Domain Brokerage
Joe Styler (@Joe Styler), Domain Investor & Aftermarket Product Manager at GoDaddy
Tessa Holcomb, Co-Founder and CEO of Igloo Domain Brokerage
Andrew Rosener (@MediaOptions), CEO of Media Options Domain Brokerage
Morgan Linton (@domainflipper), Publisher of MorganLinton.com & Co-founder of Bold Metrics
Bill Sweetman (@Bill Sweetman), President of Name Ninja
These responses have been edited for clarity.
In this edition of our Expert Exchange, we ask our panel of industry leaders:
How Do You Determine What a Domain Is Worth?
Nat Cohen (@Telepathy), Owner of Telepathy.com
I think about the potency of the meaning or other qualities of the domain name, and how much value it could deliver to a company over a lifetime if used as a brand or identity.
Shane Cultra (@Domain Shane), Domain Investor & Publisher of DSAD.com
Past sales, financial savings and marketing value to a business, and cost to replace that domain with a domain of similar quality.
Naked instinct. I've been at this for 15 years, and I know my model works. I just repeat the model over and over, and it keeps working.
Giuseppe Graziano (@Giuseppe Graziano), CEO of GGRG Domain Brokerage
It depends on the domain name. I only focus on liquid domains (LL, LLL, LLLL, NN, NNN, NNNN, NNNNN, and LN & NL, whereL
is a letter andN
is a number in those patterns). For that reason, I am not able to give you insights on other domains like one-word .com or new gTLD’s.
For what concerns liquid domains, I typically determine how much a domain is worth by a combination of:
Joe Styler (@Joe Styler), Domain Investor & Aftermarket Product Manager at GoDaddy
I look at comps. NameBio.com run by Michael Sumner and Adam Strong is a great site. I also look at potential uses, potential buyers, margins on the businesses that would use the domain name, PPC comps, potential competition in the market, brand recognition, other TLD’s being used by end users, etc. Many factors.
Tessa Holcomb, Co-Founder and CEO of Igloo Domain Brokerage
As the saying goes, a domain name is really only worth what someone is willing to pay. However, when working with our clients to assess values, we take several factors into consideration including current comparable sales, search volume, Pay Per Click rates, any associated revenue, trending industries, etc.
Andrew Rosener (@MediaOptions), CEO of Media Options Domain Brokerage
That is a much longer question! But basically, it’s a formula of search volume, cost per click, length, age, and many other factors.
Morgan Linton (@domainflipper), Publisher of MorganLinton.com & Co-founder of Bold Metrics
I used to look up similar sales a lot, but now I have a bit more of a gut feel. I wish I could say that there was more of a science to it, but over time, I've just developed a sense for what I think someone would pay for a domain name. I'm not sure whether I would have that sense without looking at tons of past sales for years, so maybe I’m just looking it up in my head now?
That being said, determining the price of a domain differs greatly based on investment strategy. Some investors want to hold out for the highest bidder, that perfect buyer that really sees the value in the name. I'd rather sell a name for less and make a profit than wait around for the perfect buyer.
Bill Sweetman (@Bill Sweetman), President of Name Ninja
That is such a loaded question because I also have to balance what my client thinks a domain name is worth (and can afford) and what the domain owner thinks it is worth. It can take a long time to get those numbers to align.
For my clients, I show them what comparable domains have been sold for, and are listed for sale for, and I will sometimes take that approach with the domain owner. So much depends on the level of desire that the client (buyer) has for the target domain name, as well as how emotionally attached the domain owner is to their domain name. (By the way, I have found that many real estate agents are the most difficult to try to purchase a domain name from. They often think that every subpar domain name they own is worth millions!)
As we all know, however, a lot of transactions are not publicly reported, so the “comparables” dataset that we all have to work with is incomplete, but it’s better than nothing. One thing I avoid is trash-talking someone’s domain name or insulting the domain owner. Even if I think their asking price is completely unrealistic, I will make my case politely and professionally rather than get hostile. I try to never burn bridges, especially with domainers since I may be coming to you again in the future to buy another domain name.
These responses have been edited for clarity.