advice My Personal Domain Appraisal Strategy

[Eric Lyon]

IMPORTANT: It doesn’t matter who or how many people you ask about the value of a domain, each appraisal will vary based on a person’s individual experience with a niche and their research. You can crunch all the data in the world and still not hit the same number that a potential end-user is willing to pay. There is no way possible to hit the exact value of a domain on the head due to a wide spectrum of variables that change slightly with each target market.

Why focus on reseller value? Because as domain investors it’s comforting to know that there is still meat on a bone so that we don’t pay too much with little return or end up in the red with a loss.

You wouldn’t ask a Plumber to do a heart transplant and you wouldn’t ask a heart doctor to fix your clogged sink. Chances are, neither of them would be very good in each others industry. The same rule applies to successfully appraising domains. It really comes down to hands-on experience in each industry niche (Separately) to get a closer look at the real potential value of a domain...

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[Hypersot]

Thanks. That was greatly needed!

 

[deez007]

Why all this complicated data crunching and research...I found this really cool tool that can give you an appraisal.. it's called Estibot.com

JUST KIDDING!!!

Thanks a stack for this post @Eric Lyon some valuable and much-needed insight here.

 

[Eric Lyon]

Why all this complicated data crunching and research...

I found this really cool tool that can give you an appraisal.. it's called Estibot.com

JUST KIDDING!!!

Thanks a stack for this post @Eric Lyon some valuable and much-needed insight here.

I added a tidbit about automated appraisals and why to avoid them in that article as well.

 

[DNWon]

Excellent article Eric! There is nothing worse than putting a name out for an appraisal and getting either zero responses or worse, responses with no thoughtful analysis on the domains value "today". 9 out of 10 times you get people throwing "zero values" or reg. fee values out there and not even having the decency to check comparable "recent" sales, keyword or serp checks or offer anything useful to the inquiry! If people are going to interject themselves into an appraisal thread, there should be some data presented, any data, even if it's just personal sales data, and by that, I mean an actually sale, not, "I couldn't sell this domain, so yours must be worthless too!"

 

[Hypersot]

I added a tidbit about automated appraisals and why to avoid them in that article as well.

One of the things I personally liked was the fact that you straightened out some myths regarding Age and Alexa. Kudos for that!

Soon I'll make a formula out of your article .. wonder how it'll change my current valuations

 

[DNWon]

Soon I'll make a formula out of your article .. wonder how it'll change my current valuations

Let me know when you do, I'd like to partner with you on this!

 

[RJ]

Great post, Eric. This is among the most comprehensive explanations of premium domain valuation that I've ever seen written. Next time someone asks me how I came up with a value for one of my domains I'll just link them to your post. Well done.

 

[RJ]

One of the things I personally liked was the fact that you straightened out some myths regarding Age and Alexa. Kudos for that!

Soon I'll make a formula out of your article .. wonder how it'll change my current valuations

Let me know when you do, I'd like to partner with you on this!

This is exactly how Estibot came into existence: from a discussion thread on NamePros about using formulas to valuate domains.

 

[Hypersot]

Let me know when you do, I'd like to partner with you on this!

Nothing fancy to be honest.
I believe the best approach to such a clearly thought out article is to get an 'estimated' base value and work from there.
Everything else (like premium letters, etc.) can add or reduce the base value depending upon -as very well Eric put it- the experience of the user.

 

[frank-germany]

"if you have to ask someone if a name is good
-it's not"
Rick Schartz

 

[Hypersot]

"if you have to ask someone if a name is good
-it's not"
Rick Schartz

...or, he is more experienced than you

 

[frank-germany]

...or, he is more experienced than you

after 18 years ... ???

 

[Eric Lyon]

"if you have to ask someone if a name is good
-it's not"
Rick Schartz

Rick has vast industry experience and I've even learned a little by researching his strategies. However, I also have my own opinions and experience.

In my experience, most don't know how to evaluate a domain properly and because of this, it would be impossible to blanket every investor under that quote of Rick's.

Now, if we are only considering the psychology behind it (if a seller isn't confident, they lose money on a sale), then I would have agree 100%.

 

[frank-germany]

Now, if we are only considering the psychology behind it (if a seller isn't confident, they lose money on a sale), then I would have agree 100%.

yes I guess thats what applies to the masses:

I you are not confident and have doubt
just choose another domain

 

[namerav]

I agree with the statement "each appraisal will vary based on a person’s individual experience with a niche and their research"

 

[Eric Lyon]

Nothing fancy to be honest.
I believe the best approach to such a clearly thought out article is to get an 'estimated' base value and work from there.
Everything else (like premium letters, etc.) can add or reduce the base value depending upon -as very well Eric put it- the experience of the user.

With so many different niches and variables, I don't think you can slap a blanketed base-value sticker on domains. In theory, it sounds like it might work, however, It's my opinion that you would need a separate base value for every single niche/sub-niche. As soon as you cross over from one niche to another, the variables can alter the value dramatically.

For instance, you can't create a base value on a "Law Enforcement" domain and then use the same base value on an "Attorney" domain. The markets are completely different. Additionally, even with a domain like "Law Enforcement", the variables will slightly change again as soon as you sub-niche to say; "Law Enforcement Equipment".

 

[Hypersot]

With so many different niches and variables, I don't think you can slap a blanketed base-value sticker on domains. In theory, it sounds like it might work, however, It's my opinion that you would need a separate base value for every single niche/sub-niche. As soon as you cross over from one niche to another, the variables can alter the value dramatically.

For instance, you can't create a base value on a "Law Enforcement" domain and then use the same base value on an "Attorney" domain. The markets are completely different. Additionally, even with a domain like "Law Enforcement", the variables will slightly change again as soon as you sub-niche to say; "Law Enforcement Equipment".

What you say definitely makes sense. What I do to somewhat balance things out is, I use the CPC and Competition for the country that I'm doing research on.
I believe that the above metrics (taken from Google) can help in gauging the differences in the various niches.

Ofc that's just what I do and it could be wrong but it has helped me to quickly get a 'feel' of what the base value should be.

Note that, so far I used Rosener's equation to put some value on domains. I totally loved his approach. With the new info you offered though, I think I'll be creating some new formulas soon

Thanks again for a very valuable article.

 

[Bullock]

Hi @Eric Lyon,

I would add an other parameter beside point 3. Domain Length, characters/words, namely syllables.


Indeed, most top domains have two syllables, i.e.:

NamePros = neɪm + prōs

 

[Martin Scurry]

Great Article Thanks For True Information and Tips.

 

[Name Trader]

@Eric Lyon - Interesting article Eric. I've bookmarked it. How long does it take you to come up with a price for a domain in a niche, you are not an expert in, but know quite well?

 

[Eric Lyon]

@Eric Lyon - Interesting article Eric. I've bookmarked it. How long does it take you to come up with a price for a domain in a niche, you are not an expert in, but know quite well?

It really depends on the niche itself and how deeply targeted it is. It's not uncommon for it to take 30 minutes up to 2 hours of research and compiling just to appraise one domain thoroughly. Then you may have to even factor in more time to compensate scheduling and meeting up with a local shop owner to discuss their personal experience in that niche to make sure you didn't forget anything. The longest time-consuming appraisal I have ever done (Which includes local shop collaboration) took just under 3 days (based on 6 to 8 hours per day = 18 to 24 hours total time spent).

In my experience, I've found that most mom and pop shop owners (Founded by people that came out of the same industry to do their own thing) are very receptive to brainstorming/collaborating when there is no sales pitch involved. With that in mind, it benefits an investor to have their own local contact list of individuals they brainstorm with but don't target for selling. Small cooperative groups from various industries like that are an asset to everyone involved.

I think the trap door in appraising is when people look for the quick number or base their value on incomplete data. I see lots of investors falling through that trap door and having a hard time climbing back out.

 

[Serengeti]

@Eric Lyon , Thank's a ton for The sum of experience and hard work....

 

[davidc1]

Nice post, but it depends of the type of domain you are interested in.
general domaining, niche master, parking revenue, seo domains, traffic domains, etc,... for each type appraisal is different.

 

[Eric Lyon]

E

Nice post, but it depends of the type of domain you are interested in.
general domaining, niche master, parking revenue, seo domains, traffic domains, etc,... for each type appraisal is different.

Exactly! I agree! Which is why I made sure to address that in the article a few times.