Need help with $300k+ domain evaluation

[Daisy9]

Hello to all, :hi:

This is my first post in this forum and I desperately need some good advice. I apologize in advance for being vague about my question, but I can’t divulge any specifics in fear of “letting the cat out of the bag” so to speak.

I work in the marketing department for a large company, in a very large industry. I have been asked to do an evaluation of a domain name that is apparently for sale, or will be soon. Sorry, I can’t say the name, but I can give some information and examples that should help.

I have not been asked to skew my evaluation in any way as to weather we should or shouldn’t buy this name, but rather to give my best estimate as to what the name is worth.

Here is some information that might help.

The Business

1) Our business is in an industry that has revenues of over 25 billion dollars a year.

2) We currently have about 18% market share of this industry.

3) We also have a web site that basically describes our products/services, as well as gives information about the company. The usual stuff, but we do no direct business on the web site.

4) Although we do wholesale and retail sales, it is not done over the internet and there is no intention to do so.

The Domain Name

1) The name is short, very memorable, and easy to spell.

2) The domain represents our entire industry perfectly.

3) There is no other domain that my bosses would consider as a substitute for this one, as it is the actual name of our industry.

4) Our competitors would likely view the domain in exactly the same way as us, and that also needs to be considered. What would it cost us not to own it.

Other Considerations

1) Our industry is subject to criticism from a number of sources including health and environmental groups. It has somewhat of a negative social aspect to it. For this reason, the name is attractive to our management as a platform to rebut this criticism.

2) Along with the above, our management does not want this domain to fall into an opponent or competitors hands.

3) The name is generic and is used in everyday language.

4) The term is searched for often online to find information about our industry.

I know I am asking you all to guess at a value without telling you what you are evaluating, but I hope you understand, and will give it a shot. I will be happy to provide additional information, albeit in the form of similarities rather than specifics.​

I guess what I am looking for is the likely value of a domain name, in relation to the market it represents.​

 

[0lgi]

Hello and Welcome to NamePros !

Personally i think that the value of that short , memorable domain name might be something between 200 000 - 300 000 $

Thanks

Olgi

 

[gazzip]

4) Our competitors would likely view the domain in exactly the same way as us, and that also needs to be considered. What would it cost us not to own it.

2) Along with the above, our management does not want this domain to fall into an opponent or competitors hands.


Only you truly know the cost of above - ie: what would it cost you not to own it.

without knowing the name it is pretty impossible to fire off a price - If you take a look at some of these previous sales for top generics you may find it usefull to get an idea what they go for and what they "can" be worth.

These generally are the best sales in the last three years.

2006 so far - http://www.dnjournal.com/ytd-sales-charts.htm

2005 - http://www.dnjournal.com/archive/domainsales/2005-expanded-ytd.htm

2004 - http://www.dnjournal.com/archive/domainsales/2004-expanded-ytd.htm

Hope this helps you out a little



.

 

[identity_00]

When was the domain purchased by the company.

 

[JBebbington]

To be honest, the name you describe, a few thousand bucks. Is the internet the only way you get business, or does it bring in none at all? If it brings in none, will this new name improve that. Basically, I am using website valuing techniques here, will this domain generate more revenue over a period of say, three years, than it cost? If so it is probably worth the price the person is asking.

 

[Spade]

I think your companies first mistake is to hire someone to understand a market in which they have never been in. Thats like walking into a neighborhood and guessing at the prices of homes without knowing what makes a home valueable or where you are. I think your request is a bit silly and your company should simply hire an individual who has been in the business long enough to give you a fair valuation. Asking a forum without giving the domain name is rediculous. Do you think this makes sense?

 

[Damion]

The Business

1) Our business is in an industry that has revenues of over 25 billion dollars a year.

2) We currently have about 18% market share of this industry.

Hi Daisy and welcome to Namepros.

If above figures are right and the people responsible for the overall company strategy seriously think that "Our competitors would likely view the domain in exactly the same way as us, and that also needs to be considered. What would it cost us not to own it." then the amount of the domain purchase should not be an issue whatsoever.

I mean 18 percent of 25.000.000.000 that are still a lot of zeros And if it it is that important for the company then cheap skating over 300K is kind of silly.

Also if we know nothing about the domain then there is not much to evaluate. your description is very VERY vague.
If the domain is so important to the company then i would suggest to your supereriours to make a decision.

Short generic domains come with a price just look at the sales Gazzip presented to you so keep this mind.

Costs and benefits.....

 

[RJ]

3) There is no other domain that my bosses would consider as a substitute for this one, as it is the actual name of our industry.

Your desciption of the industry, your company and the domain would lead me to believe it probably is worth six figures, but a one-of-a-kind domain really has no limit to its value. A domain is ultimately worth whatever a willing buyer will pay for it, so it's going to be very difficult for anyone other than your company (or your competitors) to determine the true value of this domain.

Keeping in mind that the one time purchase of this domain essentially lets you use it for life -- will the use of this domain ultimately lead to an improvement to your company's bottom line?

Best of luck,

RJ

 

[Daisy9]

Wow, I think maybe I stirred something up here. I’ll try to clarify.

Gazzip, Thanks for the links, I reviewed them and they were very helpful. Those names are the best measurement tool I have seen, so far, as to what this name might be worth.

Identity 00, We do not own the domain yet, but are considering bidding on it.

Domainspade, I am not employed as a domain consultant, however hiring one for this project might not be a bad idea. I am sorry you think that the “Newbie” area of a website dedicated to discussing domain names is not an appropriate platform for newcomers to ask questions about domain names. Seemed like the perfect place when I found it.

Damion and RJ, Wonderful response, and I think that upper management feels the same way. This name already sold for nearly $300k many years ago, and so everyone involved seems to feel fine at that level. But as you both pointed out, hard to say what the ceiling on it’s price could be. Also as Damion mentioned $300k would be cheap based on our market share and I agree, but we know it likely sell for much more. That is simply the starting amount. Thats' why we've been asked to try to place a number on how high we are willing to go. Thank you both.

 

[gazzip]

Keeping in mind that the one time purchase of this domain essentially lets you use it for life -- will the use of this domain ultimately lead to an improvement to your company's bottom line?
Best of luck,
RJ

I'm sure the likes of honda motorcycles owning the domain name www.motorcycles.com has paid for itself many times over - and that's for life unless they get careless. :hehe:

Advertising is never cheap but owning a quality domain can bring you thousands of additional customers on a regular basis, those customers could end up at your compeditors instead.

As a matter of interest can you type your domain in this link and see what the results are for monthly searches - type it in as ..... thename.com

http://inventory.overture.com/d/searchinventory/suggestion/

motorcycles.com has a result of 2568 with extension for example
diamonds.com is 1441

.

 

[softgroups]

W

i don't think , we could help you very much if you don't tell us the name...

 

[Spade]

Daisy -

The issue is not that you are new to the industry but what you are asking with the information you are providing. If your post contained the name, I would not have posted what I did. I think it is rediculous to describe specific aspects of the domain name and ask for an appraisal. That is why I suggest that an outside contractor be brought in.
I do understand why you havnt posted the name. Im not questioning your motive behind it. But I would never ask a real estate appraiser to appraise a house that has 4 bedrooms and 2 baths and is painted red, in a nice neighborhood? Too many factors... What city, what state, location to schools, size, recent comparable sales... ect. There are even more factors in a domain name that drive its value. Good luck regardless.

 

[airnike764]

Your question is very simple....You can't evaluate a domain name without knowing what it is. Only newbies will try to predict its value. Its value is $0 without knowing the domain name.

 

[whitebark]

I agree, determining value without knowing what it is, is like running around a house in the dark. oh and the $300k part of your title suggests you already have a ballpark figure.

 

[wearenotabot]

Just offer them a grand, they will either take it or counter........

 

[BMFX]

wearenotabot

One Grand, thats it?!?! i could see it go for six figures as the way it sounds...

I have a a few ideas for what bussiess style it is but i can't be sure and i am thinking even not knowing the domai a mid $XXX,XXX sounds fair.

 

[Archangel]

You describe the domain as perfect in every way for your business. How much is it worth? WHO CARES?! lol I'm being realistic, here. If it's THAT PERFECT of a domain, DON'T risk your competition getting it. Go for broke -- pay a million dollars for it if you think it's perfect for your business. Personally, I wouldn't even bother to ask how much it's worth. I'd ask a different question: Can I afford it? Or: Would I kill myself if my competition got this? Don't worry about value -- there's more to it than you realize. Even if you wind up paying north of $500,000 it'll be the best investment your company could make online. If your company acquires this "perfect" domain, you'll reap a billion rewards; if your competition gets it, you'll reap a billion sorrows.

 

[labrocca]

IMHO...the question is not really what' it's worth..the question is what will you have to pay to buy it. You may need a broker and I suggest Moniker. They are very pro at what they do. I bet they can help you acquire the name at a fair price. Looking at domains in general...they aren't reaching over 250k for the most part. Most are under 100k. The question is what is the current owner doing with it now? Parking it? Finding out his revenue and offering 10 or 20 years would most likely be what the seller would want. Realistically...it's not worth more to you. As you say...you don't sell on the internet nor intend to so I wouldn't shell out too much to have a presence in a market you don't go after. I do understand that you would rather own it than the competition...but for every industry there is more than 1 domain. It may be cheaper to buy 10 domains getting 500 uniques a day than this one that get 5000 (if it even gets that many).

Good luck.

 

[Dotplanners]

Professional Domain Consultant

Hi Daisy,

Check your PM box for contacting me for moving ahead on finding successful answers to you questions.

Stephen Douglas
SuccessClick.com
Successful Domain Management™
DomainRelevance.com
"Own Your Competition™"

Hello to all, :hi:

This is my first post in this forum and I desperately need some good advice. I apologize in advance for being vague about my question, but I can’t divulge any specifics in fear of “letting the cat out of the bag” so to speak.

I work in the marketing department for a large company, in a very large industry. I have been asked to do an evaluation of a domain name that is apparently for sale, or will be soon. Sorry, I can’t say the name, but I can give some information and examples that should help.

I have not been asked to skew my evaluation in any way as to weather we should or shouldn’t buy this name, but rather to give my best estimate as to what the name is worth.

Here is some information that might help.

The Business

1) Our business is in an industry that has revenues of over 25 billion dollars a year.

2) We currently have about 18% market share of this industry.

3) We also have a web site that basically describes our products/services, as well as gives information about the company. The usual stuff, but we do no direct business on the web site.

4) Although we do wholesale and retail sales, it is not done over the internet and there is no intention to do so.

The Domain Name

1) The name is short, very memorable, and easy to spell.

2) The domain represents our entire industry perfectly.

3) There is no other domain that my bosses would consider as a substitute for this one, as it is the actual name of our industry.

4) Our competitors would likely view the domain in exactly the same way as us, and that also needs to be considered. What would it cost us not to own it.

Other Considerations

1) Our industry is subject to criticism from a number of sources including health and environmental groups. It has somewhat of a negative social aspect to it. For this reason, the name is attractive to our management as a platform to rebut this criticism.

2) Along with the above, our management does not want this domain to fall into an opponent or competitors hands.

3) The name is generic and is used in everyday language.

4) The term is searched for often online to find information about our industry.

I know I am asking you all to guess at a value without telling you what you are evaluating, but I hope you understand, and will give it a shot. I will be happy to provide additional information, albeit in the form of similarities rather than specifics.​

I guess what I am looking for is the likely value of a domain name, in relation to the market it represents.​

 

[Daisy9]

Thanks to all for the advice in both this forum, and the PM’s I received. Archangel and labrocca, I think your points hit the nail on the head. I will try to incorporate all of this into a recommendation to the people at the top, and they will have to try to determine what they want to do.

I will be meeting with colleagues this afternoon and will be discussing some of the suggestions you all have given me, but in the end, the Brass will just have to decide how much this name is worth.

Thanks again!