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How do you define a domain name value?

Located in Domain Beginners started by Njtnelav, Feb 5, 2019.

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  1. Njtnelav

    Njtnelav Established Member

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    Which kind of researching do you have to do in order to get a realistic estimate for your domain? Actually the only methods i know are typing the domain in some value appraisal site like Estibot or GoDaddy Value or comparing similar names on Namebio.
    Do you know some other ways to do it?
     
    Last edited: Feb 5, 2019
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  2. gilescoley

    gilescoley Top Member PRO VIP ★★★★★★★★★★

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    Welcome to NP

    Never use Estibot or any automated appraisal tool, the new domainers biggest mistake

    Read this forum from top to bottom, dont register any names before you have done that

    Check out dnjournal.com and namebio.com to see recent sales and get an idea of what makes a name valuable.

    Dont take offence to people on here if you get bad appraisals on your names, we have all had them at some stage, be willing to learn and take advice

    Some basic rules and advice that apply a lot of the time...

    Shorter is better
    Brandable
    Easy to spell and pronounce, search "radio test" on namepros
    Dont mix letters and numbers
    Stick to .com or strong cctlds, preferable just .COM until you understand the industry more
    Stay away from hyphens
    Stay away from strange, obscure extensions, even when a good keyword is available
    Stay away from company names/products/trademarks
    Dont register a .net, .info or other cctld because the .com sold for a nice amount, it doesnt work like that.

    Good luck
     
  3. Njtnelav

    Njtnelav Established Member

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    Thank you for your time, i'll use those tips wisely
     
  4. andydotlol

    andydotlol Upgraded Member Gold Account VIP

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    Good tips. I disagree about never using automated appraisals. Don't just look at automated appraisals but do use them as another data point. Other things to look at

    Original reg date of domain
    Archive.org
    Number of TLDs regged
    Exact monthly search volume
    First few pages of Google (eg. Google "example" if looking to buy example.com)
     
  5. gilescoley

    gilescoley Top Member PRO VIP ★★★★★★★★★★

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    Yeah, I mean never use automated appraisal tools to appraise your names,

    I just use Archive.org and WHOIS for most of that, Estibot charges for the use of those other tools, plenty of free options out there. All there others like Evaluate etc are just rubbish
     
  6. andydotlol

    andydotlol Upgraded Member Gold Account VIP

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    @gilescoley yea I only look at GoDaddy Appraisals to be honest and it certainly isn't the only thing I look at. It takes 30 seconds and at the very least you get comp sales that don't show on Namebio.
     
  7. gilescoley

    gilescoley Top Member PRO VIP ★★★★★★★★★★

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    No problem, I've always found GD appraisals to be a joke to be honest but each to their own
     
  8. andydotlol

    andydotlol Upgraded Member Gold Account VIP

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    @gilescoley so you don't use the GoDaddy Appraisal tool at all?
     
  9. biggie

    biggie Top Member VIP ★★★★★★★★★★

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    Hi

    if you feel you have to use an appraisal tool, then that may be the problem.


    until you become tool free,
    and can evaluate a domain... based on what you see

    then forever a slave to AI you will be,

    all while paying a yearly subscription fee

    :)

    imo….
     
  10. Njtnelav

    Njtnelav Established Member

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    This is gold, i will stick it onto my notebook! :)
     
  11. andydotlol

    andydotlol Upgraded Member Gold Account VIP

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    Lol... Agree to disagree but nice rhyme
     
  12. gilescoley

    gilescoley Top Member PRO VIP ★★★★★★★★★★

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    100% true, once you understand domains and the value of names, you can tell a valuable name just by the length, keywords, extension etc,


    Thats correct, I don't use any appraisal tools, they just make up figures most of the time, you are better off researching the following

    1) How many end-users out there for your name(s)

    2) What size companies they are, its easy to find out network, financial figures etc (Google, Bloomberg, Yahoo Finance etc)

    3) Who is the CEO, Business Development Manager, Legal Counsel at the company, dont just email random people at the company or the WHOIS email address, email the decision maker or the email will be deleted (LinkedIn, Google, their website)

    4) What other names do these companies own?

    Not sure how you can disagree with what biggie said, you really wont need those tools in a few years, it just takes time to understand domain value, anyone who has been in the game for a while will tell you that.

    Good luck
     
  13. Sami Ketolainen

    Sami Ketolainen Top Member VIP

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    Most important tool is your own head. If you have been at business world, you don't have to even think that has this particular domain name value.

    Ask always from yourself, would I use this domain name for my own business if I would have money to run own business.

    It's always good to check out comparable sales, how many searches there are but with experience you will start to see with your eyes which domain name is perfect for example travel agency, brokering service and so on.
     
  14. andydotlol

    andydotlol Upgraded Member Gold Account VIP

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    @gilescoley I agree that you should do everything you just said. Then you should spend another 30 seconds to do a GD Appraisal. Again, there are a ton of sales reported on the GD Appraisal that you won't see on Namebio or anywhere else. That alone makes it worth using. Also biggie said "until you become tool free". Google, whois search, Namebio, hunter.io, email, etc are all tools.
     
  15. biggie

    biggie Top Member VIP ★★★★★★★★★★

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    I precluded that, with "if you feel you need to use an appraisal tool"
    and from my perspective, none of those you mentioned, are appraisal tools.

    imo...
     
  16. Bob Hawkes

    Bob Hawkes formerly MetBob NameTalent VIP

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    A few months ago I published on NameTalent a piece on how to evaluate a potential domain name acquisition. You can get the full article at the link below but it starts with a consideration of potential end users and the value they would derive from the name, then moves on to general popularity, and then cost/benefit including a look at past sales and trends. I do suggest consulting appraisals as part of the multi-step process. Aesthetics of the domain name are important but hard to evaluate. Generally names that are elegant being only as long as needed are best, and names that are positive and feel fresh. There are different types of domain names (6 according to DNAcademy classification) and different name structures.

    https://nametalent.com/2018/11/evaluating-a-potential-domain-name-acquisition/

    Bob
     
  17. andydotlol

    andydotlol Upgraded Member Gold Account VIP

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    I was being fastidious :)

    Great post @Bob Hawkes 👍
     
  18. gilescoley

    gilescoley Top Member PRO VIP ★★★★★★★★★★

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    Total waste of time, may as well put some figures in a hat. close your eyes and just pick one out :xf.smile:
     
  19. andydotlol

    andydotlol Upgraded Member Gold Account VIP

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    Lol of course... The GoDaddy Appraisal Tool is just a random number generator right @Joe Styler ?
     
  20. gilescoley

    gilescoley Top Member PRO VIP ★★★★★★★★★★

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    Try some names that vary in value and you will see. If you need confirmation from someone who works for godaddy then there is not much more to discuss. What do you think Joe will say? 🙄
     
  21. Joe Styler

    Joe Styler Aftermarket Product Manager GoDaddy Staff Afternic Staff PRO VIP

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    Our tool was developed by a guy with a PhD from MIT in A.I. and machine learning. It is based on that and using big data sets to look at the potential value and probability of a sale etc. We only show one number on the site but there is a lot of other data behind the scenes being looked at. It is hard to showcase that with one number.
    I think the tool has value, especially when used in bulk for various reasons.

    I do not think it is something you should rely on to price your domains as the end all and be all. We say that on the tool page itself in the disclaimer. I do think it has value as another data point to look at. I've been doing this for longer than I care to say :) and I can spot a good name on my own, and give a decent price point etc. But I can't spot them all. I only know a couple languages, I don't know all the different fields of study and verticals for various businesses etc. If the tool pops up a high value for a name I may overlook because of my lack of knowledge in that area it gives me something more to look into on my own. I also like the comps for various reasons. Who's buying?, when did they buy? same people? lots of people? etc.

    For a new person @Njtnelav, I would take any valuation, human or machine with a grain of salt. My advice to you would be read a lot of the forum, ask a lot of questions. Start very small, 4 or 5 domains. Buy them in an area you already know about. What fields do you know well? Before buying a domain think about why it would make sense for someone in your field to own. What difference would it make for them or a competitor to have that domain? Can you easily explain that value to them? Would you buy it to help your business in that field? Why or why not? Then start asking friends in the field what they think. Would they use that domain? Why or why not? How much do they think that is worth to their business. Then call some people you don't know in the same field. Try and sell them the domain. See what they say. If they don't want it ask why. You'll quickly learn why a domain is valuable.

    The problem most people have when they start buying domains is they buy the wrong kind of domains. They spend a lot of money buying very bad domains and come into it with a get rich quick, or lottery type mentality. Don't spend a lot of money until you learn what you are doing and you know yourself what makes a domain name valuable. Start with an area you know well. If you put in the time and ask all these people about the domains you buy and get their feedback and hear from real people on why they would or wouldn't buy your domain you'll quickly figure out what makes a domain valuable to a buyer and why without buying a lot of worthless domains you can never resell.
     
  22. Njtnelav

    Njtnelav Established Member

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    Oh wow, what a honor, thank you very much for your words of wisdom.
     
  23. biggie

    biggie Top Member VIP ★★★★★★★★★★

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    Joe, you hit the typical newbie on the head with that line.
    well said!

    most think they can just buy any domain today and resell tomorrow,
    and assume folks are just sitting around waiting to receive their email

    :)




    imo...
     
  24. Michael

    Michael NameBio.com NameBio Staff PRO ICA Member VIP ★★★★★★★★★★

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    How is a comps database not an appraisal tool? It's literally the only appraisal tool in this industry worth looking at. Comps are the foundation for pretty much every appraisal in every industry that has them, be it domains, Real Estate, art, you name it. You can't appraise the price of something accurately without knowing what similar items have sold for, otherwise you're just pulling a number out of thin air.

    Even if you have intimate knowledge of the industry that the domain serves, you probably wouldn't be able to do it. Go ask a CEO with no domain aftermarket knowledge what a domain that is perfect for his business is worth, he won't be able to give you a good answer. He'll probably say $500 or less. Maybe if he's really smart he might be able to put a dollar value on the benefits it would bring to his business, apply a reasonable multiple to it, and come up with a sane number. But probably not if we're being realistic, otherwise it wouldn't be so difficult to sell domains, even ones that are good.

    There's a reason that when looking at our traffic logs, the absolute biggest users by a mile are all the big brokerage houses and marketplaces. They use comps to justify prices to their buyers, and it works. If they do it and they have centuries worth of experience on their teams, certainly a newbie should be doing it.

    Granted there are no truly good automated appraisals out there, but that is because they aren't good at filtering and digesting the sales data and knowing which are truly comparable and to what degree. I'm not 100% convinced software could ever do that. It is not a reflection on the usefulness of comps to a human.

    Nobody was born knowing how to appraise a domain name, not even you. While you're probably pretty good at it, that is based on decades of experience and hundreds of negotiations under your belt, hearing about the sales other have made, and so on. Newbies don't have that luxury.

    There are only two choices for a newbie. You can learn the long and hard way through trial and error, and probably burn a lot of money making mistakes. Learning what sells and for how much, and what doesn't sell, by buying 4-5 domains and trying to sell them might work but it will take an eternity. Or the other alternative is that you can get decades worth of experience just by reading what others have done.

    While your poem was super cute, the message was misguided. If you left it at not relying entirely on automated appraisals it would have been sage advice. But not using any tools is just silly. And even automated appraisals add value to the equation, even if that value isn't in the dollar amount they spit out.

    Someone who has no experience appraising domains and has no sales under their belt should absolutely make use of tools to help them. Not just comps although that is the most important starting point, but also ones others have mentioned, like Google to see how many companies might use it, SpyFu to determine demand and commercial appeal, DomainTools to see how many other extensions are registered, and so on. Some domains might require other tools in addition, like a given name you'd want to know how many people have that name. For a Geo you might want to know population, median house values, salary level, tourism numbers, and so on. For a prodserv you might want to see how interest is trending over time.

    That said, none of those supplemental tools actually help you put a real number on a domain name in a vacuum. They only help you determine which comps are really close and which aren't. You can't say "Oh, this domain has seven large end users, thus it is worth $xx,xxx" without using any sales data at all.

    Even if you have a lot of experience in the domain industry, you don't know everything and could still benefit from doing similar research. It might not be worth the effort since most of the time you'll get it right, but certainly not always. As Joe said you can't know everything about everything.
     
    Last edited: Feb 10, 2019
  25. Argentum

    Argentum Established Member

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    If you will find great domain and it's still available make thread on Namepros asking to appraise that domain before registering.
     

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