tips Cost to value ratio for maybe/standby lists

[Reddstagg]

Good afternoon.

I just thought that I would share a little piece of wisdom that I have picked up along my short journey.

Do you have a list of names that you wish to register or buy one day? Do you know the cost and potential appraised value for each one?

I've set up an Excel spreadsheet with my maybe/standby list and I spend a fair bit of time running each one through the Godaddy Appraisal tool. It is not perfect, but it can at least give an indication of which domain names are perceived to be more valuable than others.

The spreadsheet simply lists the cost to register/buy the domain name and the expected/appraised value. It is then simply a matter of dividing the value by the cost to purchase which simply gives you a cost to value ration.

Again, it is not exact science but it at least gives me an indication of which domain names I should be registering rather than registering something that is either too expensive of or not valuable enough.

For example, if two domains were registered and they cost $10 and $20 and were valued at $2,000 and $1,000 respectively then wee would be able to calculate the cost to value ratio for each as follows

DomainA.com - $2,000 / $10 = 200
DomainB.com - $1,000 / $20 = 50

In this instance we can see that the ratio of 200 is greater than 50 which means that DomainA would offer a potential better Return on Investment (RoI) than DomainB. The higher the number, the better the potential return.

P.s...if anyone is even remotely interested I should have also included the following information:

I have a maybe/standby list which has 1,100 domain names on it.

The GD appraised value is $543,000
The expected cost is $ 24,000

This gives a potential of a cost to value ratio of 22

There are many changing parameters so this can only ever be used as a guesstimated guide only.
It is not a foolproof system but it works for me and I'd love to hear your views or answer any questions that you may have.

Enjoy your journey.

Regards,

Reddstagg

 

[Bob Hawkes]

I think keeping a spreadsheet of possible names and some parameters makes sense. It is often good to let a possible acquisition sit there to see how you will feel after time has passed. Yes you lose some, but regret fewer acquisitions.

With respect to your ratios, keep in mind that the reliability of automated appraisals is not strong. Also, they are much worse for some types of names. Have you tried making your own likely price estimates based on comparator sales, and do those ratios as well as thae appraisal ones?

Thank you for your contribution, and best wishes in domaining.

Bob

 

[Reddstagg]

I think keeping a spreadsheet of possible names and some parameters makes sense. It is often good to let a possible acquisition sit there to see how you will feel after time has passed. Yes you lose some, but regret fewer acquisitions.

With respect to your ratios, keep in mind that the reliability of automated appraisals is not strong. Also, they are much worse for some types of names. Have you tried making your own likely price estimates based on comparator sales, and do those ratios as well as thae appraisal ones?

Thank you for your contribution, and best wishes in domaining.

Bob

Good evening Bob and thank you for your reply.

I think that the only thing that is almost guaranteed to succeed is the shortest possible .com.

After that, I feel that the field is quite wide and open for the next big thing in branding, advertising and domain investing in general. There is a new breed of kid on the block. I'd say that they are not necessarily driven by wealth but success and social acceptance by their peers. They are becoming more aware of environmental and humanity issues and they will pick a domain name that helps to spread their particular message.

Someone who can build a brand successfully will do so with a domain name they like rather than one that costs a considerable amount of money or will be more valuable at a future date.

The spreadsheet simply tells me at a glance which domain names will provide greater value for money using my limited budget. The secret I suppose is to spend the least amount of money whilst getting the best potential RoI.

It is just one of the tools that I use and sometimes I will just hand reg a few names with no logic or reason just because I have a 'feeling' about them or just know that they will add value to my portfolio.

There is no replacement for wisdom or experience. My portfolio is split 50/50 with .coms and it really is z diverse portfolio and I'm not backed into a corner with any particular niche so if things change quickly, which they invariably will then I can adapt and go with the flow.

I'm too small a fish for anyone else to worry about for now so I'll just keep swimming on the bottom.

I'm enjoying the journey and spending money I can afford to lose so it's not all bad.

Hope you're keeping well and enjoying your journey too.

Regards,

Reddstagg