guide How do I valuate domains and set an asking price

[AbdulBasit.com]

Hello and Assalamo Alaikum,

One of my reader Sumit asked me how do I valuate and set an asking price for domains when I don't use any valuation tools like Estibot and others. I have also mentioned some factors which I don't actually consider while assessing domains.

It's an interesting question and many find it difficulty in setting up prices for their domains. Although I am not an expert or the domainer who mostly sell his domain in 5 and even 6 figures on regular basis. But if someone wants to know more as to how I operate my domain business, please continue reading.

When I was in initial stage of my domaining career, I did flipping and sold domains at sacrificing prices just in order to keep the cash flow going and must not stop buying and selling domains. But as I am quite settled now ALHUMDULLILAH, I can wait for the right buyer and play waiting game.

There are several factors in valuing my domains:

1) No urgent need of money. When you have good cash flow your sense of judgement gets change and you act accordingly. However, I have tried to get maximum out of every domain sale I can no matter what my financial position was. I admit of selling domains at lower price than I thought of their actual value but it was done purposely for the need of cash flow. Now when there is no urgency of funds, I feel I am on top of enduser and can demand what I actually want for every domain.

2) There are hundreds of domain I hold which are upgrades for companies but I have categorized several domains for which I have one specific buyer to target when selling. I won't mention any specific domain but you may check out the domain investment page to get an idea. When you target 1 specific buyer, you limit yourself selling the domain and requires lot of patience and wait for that buyer to knock your door first. But I tell you... the reward is really fruitful and sometimes life changer. But in such cases, I don't buy domains with having only one potential buyer on internet.

3) When targeting of one specific buyer, that company will definitely be having good backing of funds. If a company has got series of funding in millions of dollars, why cannot they spend a peanut of share on buying/upgrading their domain to a better one. The more time that buyer will delay, the more he has to pay because I have to consider many factors in increasing the price as the time goes by. My investment which is stuck for long time, aftermarket from where I buy domains is as always going up so my price will be adjusted accordingly.

4) That particular market is huge and has lot of potential. I don't need of going into much detail about this because we as domainers know which niche has what kind of potential. But this is one of the factor I take into consideration for valuing my domains.

5) I don't give much importance to exact searches and CPC of Google Keyword Planner. For most of domain acquisitions, I don't even check these metrics. Also the length of domain doesn't matter unless it has meaning, demand and potential. The more shorter, the better. Doesn't mean longer in length domains are not valuable but surely less desirable than shorter names like 2L, 3L.com domains.

6) Number of existing companies. I take this metric into consideration when buying and pricing my domains. I normally check when that domain is possibility of an upgrade. I use NameDroppers and ZfBot for this purpose. When selling any 4L .com, I don't see much benefit of checking existing companies through ND or ZfBot but Google is more helpful in such type of domains.

7) Registered in other extensions. Let's take an example of one of my domain (BeeGreen.com). I prefer checking/considering NameDroppers or ZfBot and Google and rest of the factors I have mentioned in the entire post but just looking if BeeGreen is registered in other extensions doesn't bother me at all. Yes, there is possibility of .net owner to buy the .com version but never sticking solely to this option of checking if BeeGreen is registered in lower extensions and decide how much to ask while selling the domain. The result will always be poor and I will leave plenty of money on table.

8) Language. Most of the domains in my portfolio consists of English words excluding 4L.com and brandable domains. I do have domains in many different languages but I try to buy good meaningful and very common words used in that language or has decent as well as common meaning in English language. I used decent because I don't buy domains which has relationship with alcohol/adult/gambling. It's difficult to sell less popular language spoken domain even in .com as compare to selling some German, Spanish, Italian words in .com. You have to see the domain you own is in which language and how much popular and common that word is in that language. Sometimes people prefer to have .de (German country code) domain than to have .com. Doesn't mean you should not buy German language domains in .com but research is must. But if you seek my suggestion, I would strongly say to stick with English words in .com and diversify your portfolio once you have gathered good quality along with decent number of domains.

9) Comparable sales. Oh well... This is seriously useless for me for setting up an asking price for my domains. I do keep checking DnJournal weekly sales report and NameBio but that doesn't mean I set asking prices after going through any comparable sales. Checking those sites keep me updated and helps me while buying domains so that I must not overpay it. But when I valuate my domains, I never check comparable sales because every domain is different. Demand of buyer is different, situation of seller is different and many other factors are involved.

10) The most important factor in my opinion is that buyer have to have the biggest idea for using the domain they are going to acquire from me. You will hear often from domainers who say that your domain is worth what the buyer is willing to pay. In my opinion, that's utter nonsense and that person giving such shitty advice have no idea about this business. I always valuate and decide the asking price to whatever I want and sell at my own price. If the buyer doesn't want at that price, he must not have the big idea for my domain. I simply pass which is difficult but that's the way you should deal if you are to make fortune and change your life for betterment.

I would love to see what others think about my way and curious to know how you guys valuate and price your domains ?

 

[SamDam]

Thanks @AbdulBasit.com , Great article,

 

[namerav]

Good Reading

 

[domeen]

I have too many domains. I keep it simple. I have 4 price groups:

1). $1998- basically domains don’t make any money parking. But are sellable. About %30 of my portfolio
2). $4888 little better ones. Some make money parking, but not reg fee in year.
3). $8888 domains that make at least reg fee on year.
4). $30000- some special ones are 50k. my best, and all 4 letter .coms. About 15% of my portfolio.

 

[AbdulBasit.com]

I have too many domains. I keep it simple. I have 4 price groups:

1). $1998- basically domains don’t make any money parking. But are sellable. About %30 of my portfolio
2). $4888 little better ones. Some make money parking, but not reg fee in year.
3). $8888 domains that make at least reg fee on year.
4). $30000- some special ones are 50k. my best, and all 4 letter .coms. About 15% of my portfolio.

Looks like you rely pricing on the $$ your domain makes per year through parking?

 

[domeen]

Looks like you rely pricing on the $$ your domain makes per year through parking?

Yes thats the value I watch the most. Other factors i consider also, but not as much

 

[AbdulBasit.com]

Yes thats the value I watch the most. Other factors i consider also, but not as much

I don't like it that way. I've sold plenty of names for 4-5 figures which made less than $1 per year through parking so depending heavily on that factor doesn't make sense to me.

 

[sharastar]

Thanks @AbdulBasit.com for this wonderful writeup.

Got lots of Golden nuggets in there from your journey of pricing and buying Domains.

I totally agree with your last point.

Thank You and Lots of Love

All the Best

 

[dennisok]

Thanks once again @abdulbasit and everyone who contributed to the enlightment of others here.

 

[AbdulBasit.com]

Thanks once again @abdulbasit and everyone who contributed to the enlightment of others here.

Thanks!
Just a small correction here - you've tagged the wrong person.

 

[Juniorsilver]

Insightful words for a newbie like me

 

[Manisha Pakhrin]

Thanks for the info.

 

[Alayna10]

When setting an asking price for a domain, you can think of its value as a combination of several factors.
A simple way to calculate this is:

Domain Value = (Base Price) × (Industry Potential) × (Memorability) × (Buyer Demand) ÷ (Urgency)

• The Base Price is what you think the domain is worth initially or what you paid for it.
• Industry Potential reflects how big and profitable the related market is — bigger markets mean higher value.
• Memorability measures how easy the domain is to remember or brand — shorter and catchy names score higher.
• Buyer Demand estimates how many people or companies might want the domain.
• Urgency accounts for how quickly you need to sell — if you need to sell fast, the price usually goes down.

For example, if your base price is $1,000, the industry potential is high (3), the domain is quite memorable (1.5), there’s moderate buyer demand (1.2), and you’re not in a hurry to sell (urgency factor 1), the calculation would be:

$1,000 × 3 × 1.5 × 1.2 ÷ 1 = $5,400

This formula isn’t exact but helps you think about pricing more logically based on important factors.

 

[Future Sensors]

The Base Price is what you think the domain is worth initially or what you paid for it.

And how do you start with setting this accurately?

 

[Alayna10]

And how do you start with setting this accurately?

Setting the Base Price can be tricky because it forms the foundation for the whole valuation. Here’s how I usually approach it:

• First, I look at what similar domains have sold for, but I don’t rely only on that since every domain is unique.
• I consider what I originally paid or the investment made to acquire the domain.
• I think about the domain’s keywords, length, and branding potential to estimate its value.
• I also factor in the industry and possible end users to guess a reasonable starting price.
  
  Well, setting the Base Price is a balance of research, experience, and intuition—getting it right takes time but makes the rest of the valuation much clearer.
  

 

[Future Sensors]

Right. The conclusion is, that it's not easy to condense this into any formula.

 

[HotKey]

Right. The conclusion is, that it's not easy to condense this into any formula.

found something that might help;
d=domain
D=delusion
everything else, ties in the formula

 

[Rodeo]

3) When targeting of one specific buyer, that company will definitely be having good backing of funds. If a company has got series of funding in millions of dollars, why cannot they spend a peanut of share on buying/upgrading their domain to a better one. The more time that buyer will delay, the more he has to pay because I have to consider many factors in increasing the price as the time goes by...

Really insightful article - thank you for sharing your experience.

I wanted to ask you about point three. When you’re targeting one specific buyer, how do you determine that this particular buyer is actually interested in purchasing your domain?

And second - do you usually wait for them to reach out to you, or do you contact them directly with an offer? Based on your experience, which approach tends to work better, and why?

Thanks for sharing your thoughts.

 

[AbdulBasit.com]

Really insightful article - thank you for sharing your experience.

I wanted to ask you about point three. When you’re targeting one specific buyer, how do you determine that this particular buyer is actually interested in purchasing your domain?

And second - do you usually wait for them to reach out to you, or do you contact them directly with an offer? Based on your experience, which approach tends to work better, and why?

Thanks for sharing your thoughts.

Thank you!

I never buy any domain with one specific buyer only. If there are multiple potential buyers for a domain, the price may be set up according to one of those potential buyers in mind. But that's not always the case. It depends on the domain name. For example, if the enduser is using scottsmiraclegro.com or globalracingoil.com and I've GRO.com, so they're my potential buyers.

I never reach out to any potential buyer for my domains.

 

[NameGroove]

Thank you!

I never buy any domain with one specific buyer only. If there are multiple potential buyers for a domain, the price may be set up according to one of those potential buyers in mind. But that's not always the case. It depends on the domain name. For example, if the enduser is using scottsmiraclegro.com or globalracingoil.com and I've GRO.com, so they're my potential buyers.

I never reach out to any potential buyer for my domains.

Do you still use NameDroppers or do you use DotDb or other service to check # of companies with the keyword in the URL now? (not sure DotDb was around when you first posted).

 

[AbdulBasit.com]

Do you still use NameDroppers or do you use DotDb or other service to check # of companies with the keyword in the URL now? (not sure DotDb was around when you first posted).

I used NameDroppers in the past but they're no longer good/updated in this business. I've been using DotDB for several years now and it's a great way to do research on a domain name.