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domain The Unofficial NP Domain Appraisal Guide

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skyraider

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Hey everyone,
Here's my first attempt at a helpful article for us NP'ers: Domain Apprasial. If this isn't in the right section, please move it ;)

Article: How to better help a domain owner determine a domain's value


Many appraisers on NamePros simply post "Low to mid $xx" or "Low $xx IMO" or "High $xxx" without stating a reason for his/her valuation. In this thread, I hope to better the NamePros appraisal forum by providing suggestions for how appraisers can better assist the owner of a domain determine the value of his/her name in several different situations. To start off, let's look at the different types of major extensions in the most common order of what they're worth.

.com is the commercial extension. Typically, .com domains are worth the most.
.net used to be a "network" extension; however, it fits forums well and is used when the .com version of a domain isn't available.
.org is the most 'restricited' of the top 3 TLD's. By 'restricted', I mean that many .org names aren't worth much at all unless they are obviously useable for a nonprofit organization. Recently, however, with many other TLD's being taken, the value of a good .org has increased.
.biz is the business extension. Although not widely used, some businesses do have .biz domains. A commercial keyword ending with .biz can be quite valuble.
.us means .United States. Domains that would be usable to a United States reseller aiming its products at the U.S. market can be worth a good amount in .us.
.info domains are an intereted batch. .info domains can be registered for under $3; additionally, a premium .info domain is typically worth less than a premium .com or .net. There are exceptions; some buyers do indeed value .info's over other domains because of factors such as universality.

When appraising a domain, be sure to keep the following factors in mind: keyword frequency, length of the name, extension and relevancy of the extension.
Keyword frequency in search can be determined using the Google AdWords Keyword Tool. The more searches conducted on a particular keyword or set of keywords, the more valuble that keyword or set of keywords is as a domain name.
Length of the domain name is another important factor; users have an easier time remembering shorter names. In addition, longer domains may recieve less traffic than competitors because users simply don't want to type in computerdiscussions.com when they could go to pctalk.com, which is (let's pretend, at least) of similar or equal quality.
Relevancy of the extension is the most important factor in appraising a domain name. For example, EuropeanUnion.us does not fit its extension in that the EU is not a United States body. Another example: buycars.org may try to be a commercial site. However, since .org is typically used for non-profit groups, the site may not have much success.

Remember to keep all of the factors in mind when appraising a domain. Also, say more than "Mid $xx". Tell the owner what he/she needs to know to develop a sense of the domain's value.

~ Also include what you would pay ~

Recently, many appraisals here at NP have been based around what the appraiser thinks the value of the domain name is to a another reseller and to an end user. That's good, but it may not be all that helpful to the owner of the domain being appraised. Why?

The real value of a domain is what it sells for.
If you think that someone else may pay $250 (low $xxx) for a domain, but you're a frequent domain buyer and you're only willing to pay $25, then you should state that in the post. Tell the owner what you would pay, even if it's only $5. Here's why: if 5-15 appraisers are only willing to pay $5, the domain is likely worth $5 in the reseller market.

Example: if your domain recieves 10 appraisals, and 8 people say that it's only worth $10 because they aren't looking to develop a website around such a topic, then it gives the owner a good idea of what the domain is actually worth to domain resellers.

However, if the two remaining appraisers would pay $xxx because they plan to develop a website around that topic or may be interested in or capable of doing so, then the owner has an idea of approximately what percentage of the domain/website development market his or her domain name is marketable to.

Summary: in addition to reseller & development value estimations, tell the owner of a domain what you personally would pay for the domain, no matter how low, because a domain is only worth what it sells for.

~ Example: ~

Sports.us is the domain being appraised. You'd go to Overture and find that many people searched for "sports". You realize that sports are played in the United States, so the extension is relevant. The domain is short and sweet, adding to its value. Also, there are tons of results on Google for "sports". So you'd say:

"Since 'sports' had X searches this January on Overture and since it's very short and memorable, I'd say you could sell it for [price] to an end user and [price] to a domain investor. The extension doesn't hurt if you can find a user with a sports site targeting the United States market."

~ Example #2: ~

MarketForums.net is the domain being appraised (using this one b/c I own it). I'm the appraiser. I go to Overture and find high results for 'market' and 'forums', but not 'market forums'. On Google, however, there are surprisingly many results for "market forums", probably meaning that there's a large interest in the subject. So, search results are OK for this domain. The extension would be better in .com; however, .net does not bring the value down too much considering that many .net is often used for forums.

For an international market forum, this domain is good. To a developer wanting to start up a United States stock market forum, however, MarketForums.us may be better. To a domain investor, MarketForums.net would be the pick over MarketForums.us.

~ Example #3: Country Code Extensions ~

Beaches.sc (also mine) is the domain up for appraisal. On first sight, you might say "Registration fee; the extension hurts it." However, upon using your friend Google to research the .sc extension, you find that the ext. was created for the Seychelles, a beautiful French archipelago and a great tourist/vacation destination. In your appraisal, you should include that because the U.S. market for tourism to French lands is down at the moment because we're munching on freedom fries, beaches.sc could be used as .South Carolina.

Overture tells you that there are hundreds of thousands of results for beaches in South Carolina like Myrtle Beach. Enlighten the domain owner to the fact that with a good amount of development as a South Carolina beach information site, beaches.sc is an excellent keyword domain and would be worth [price]. However, to a domain investor, .sc may mean "source" (like whois.sc); "beaches source" makes no sense and wouldn't be worth much at all.

~ Example #4: 3-Letter Domains ~
When your appraise three-letter domains, take two main things into consideration: if the letters mean anything or are an acronym and the quality of the extension. FYI.co.in is likely worth more that QYX.com because FYI means "For Your Information", whereas QYX does not have a widely known meaning. 3-letter domains (LLL - Letter Letter Letter) are typically more valuble than LNL (Letter Number Letter) or NNL or NLN names because they're easier to pronounce.

~ Helping the domain owner: ~

Tell the person who posted the domain all of this info, including what market(s) the domain would be most valuble in and why. It helps him/her get a better feel for the value of the domain in different situations with different buyers. You should also get a feel for the value of certain extensions and for whether the market is "bull" or "bear". To keep up with the market, frequent sites such at DNJournal.com and the NamePros sales forums to see how much names are going for.

If you enjoyed my article and think other NP'ers could benefit from it, please send some $NP this way so I can sticky the thread.

Happy appraising! B-)
 
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The views expressed on this page by users and staff are their own, not those of NamePros.
True_Snake said:
That might be a good idea; except folks who do it sincerely might be at 'loss' here.

About turning NP$ off in the Appraisal forum: don't you think that True_Snake is right? A better way is to extend the minimum post length to, say, a line, IMO.
 
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I would agree with turning NP$ off, there is at least on person who just seems topost "reg fee" or low $xx on every single domain appraisal thread....
 
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Zeeble said:
I would agree with turning NP$ off, there is at least on person who just seems topost "reg fee" or low $xx on every single domain appraisal thread....
Wouldn't the minimum one or two line minimum do the job and still reward those making good appraisals?
 
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SkyRaider ~

Outstanding article. Well written and VERY topical. Thank you.
The ext. values are of course, like all appraisals, personal opinions and shouldn't be dwelled upon as much as nature of the article.
-RJ-
Is there a way to turn NP$ and revenue sharing off in just the appraisals forum? This will discourage fake appraisers and eliminate junk replies.

This is too extreme and will only cause other sections to carry the load from members who disregard the true essence of this forum and disrespect everyone else by assuming post=status.

The offending posts in all the sections can be reduced simply by member re-inforcment. Positive and negative. Like we do our children.
Good behavior = Praise.
Bad behavior = ?... that would be Admin's call.

NamePros has many of the most highly regarded and respected people in the Domain BUSINESS as members. We are privileged to be given the opportunity to listen and learn from them.

Thanks again SkyRaider, kid5150

wot said:
I live in Thailand and we can hire hitmen very cheaply, possibly just a few NP's will do the trick
I believe you.
 
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skyraider said:
Wouldn't the minimum one or two line minimum do the job and still reward those making good appraisals?

I think your right actually.....
but I do think that something should be done to stop the constant "reg fee" which is still given out for a 2 letter .org, making it obvious that some one is just posting for NP$
However, making it so that you have to write 2 lines will put some people off.
 
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skyraider said:
About turning NP$ off in the Appraisal forum: don't you think that True_Snake is right? A better way is to extend the minimum post length to, say, a line, IMO.

Or a 100 character minimum (with spaces) for each post in the appraisal forum.

AmCy
 
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www.AmCy.org said:
Or a 100 minimum (with spaces) for each post in the appraisal forum.

AmCy

Yes; that would greatly help in churning out higher-quality appraisals.

By the way, I added Example #3 to the article: tips for appraising CCTLD's.
 
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The article is very well written and informative. Kudos. Well deserved sticky.
 
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Good article....
I didn't notice "brandability" entering into the evaluation...I believe it does & will continue to be a stronger determination of value....especially with end user sales..
That has been my experience to date anyway...

I don't even bother with submitting names for appraisals in the appraisals section anymore...I think that for most (NOT ALL) it is just a way to get NP$....
I do read them for a chuckle sometimes....(sorry but that is how I view many of them)..No offense intended to those who really take it seriously...you know who you are.
When I have taken the time to appraise a name I really try to look at all avenues if possible & give a thought out opinion (that's what it is really).
I would like to see positive changes in this area...(I might even hold my breath..)
Nice to see so many getting involved...
Just my 2 cents worth...

Jim
 
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How about this one. If you post “regfee” for a name that is clearly worth substantially more you loose NP$ instead.

How you define this is clearly open to interpretation, but I have seen people shout regfee without checking a single “reseller” type stats such as OVT w/EXT, Linkpop, Alexa, whatever.

There's nothing wrong with lots of people saying regfee. If a name is really worth nothing this just reenforces it. But I think if anyone wants their NP$ 1 for repeating it they should have to do their homework.

Gosh, I hope I don't loose all my NP$ for appraising crap 3chars as regfee :)
 
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Something has to be done - it gets worse and worse - I see 35 appraisals within 27 minutes by one member today. I see 20 appraisals of a single domain none of which none say anything more than "Low $xx" or "mid$xx" or "reg fee" with no reasoning.

I think "no NP$ for appraisals" is required at this point.

cera
 
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Great article. Gives a bit more insight to the appraisals thrown around.
 
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a good read sky...! but names apart from .com are subjective and relative to the buyers "feelings"

a seller or appraiser might think its worth lots....but buyer think otherwise or vice versa;)
 
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Well written indeed.
Rep point delivered, and good choice for a sticky sir armstrong.
-Allan
 
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IAmAllanShore said:
Well written indeed.
Rep point delivered, and good choice for a sticky sir armstrong.
-Allan

Thanks, Allan.

If/when I think of more examples to add, I'll post those as well. -RJ-, what do you think about the suggestions concerning NP$/minimum post length in the Apprasials forum?
 
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Nice post Sky....

I too thought of regged beaches.sc but i went for an acronym of same theme....

www.ibm.sc ..... incredible beach moments :lol: ;)
 
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Midano said:
-RJ-
Is there a way to turn NP$ and revenue sharing off in just the appraisals forum? This will discourage fake appraisers and eliminate junk replies.
:bingo: Alot of times it seems like certain people just post anything in the appraisals section just for the heck of it.
 
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HellFear said:
:bingo: Alot of times it seems like certain people just post anything in the appraisals section just for the heck of it.

It also seems like "mid $xx more if developed" is copied and pasted into virtually every appraisal. Come on, we know it's worth more if developed. We would like reasons for valuations please :)
 
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Very helpful article :)

I think the ordering by value may be not quite right and will certainly change over time.

1) .info's almost always make higher prices than .biz is very niche so the end user market much smaller.

2) .us as a ccTLD of the worlds largest economy will become like .co.uk and .de . ccTLDs in major economies routinely sell for more than .net and .org

3) Corporates often do not like .orgs and corporates are the end users willing to spend the most.

Generalized ranking is difficult but I would rank
.com .us .net .info .org .biz (We're in England so don't own any .us's so no bias!)
 
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Ahh! So many people continue to post "Low $xx" or "great name high $xxx" with no stated reason whatsoever for their valuation.

I think some people may actually copy and paste "mid to lox $xx" and go around and post in the Appraisal forum. People like that might appraise sports.com as "mid $xx" and might be copying "high $xxx" around when interwebnetissocoolanditrocksbecauaseithinkitdoes8343.bz is posted for appraisal.

Please take the tips in my article into considering when making a valuation for a domain owner ;)
 
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skyraider said:
Ahh! So many people continue to post "Low $xx" or "great name high $xxx" with no stated reason whatsoever for their valuation.

I think some people may actually copy and paste "mid to lox $xx" and go around and post in the Appraisal forum. People like that might appraise sports.com as "mid $xx" and might be copying "high $xxx" around when interwebnetissocoolanditrocksbecauaseithinkitdoes8343.bz is posted for appraisal.

Please take the tips in my article into considering when making a valuation for a domain owner ;)

I think you may be p*ssing in the wind my friend. Utopia will never be achieved here all the time there is a tangible gain to be had in through appraising domains...

I personally thing the domain appraisal forum gets lower and lower in relevance as the days go by and am deeply surprised Ron and the boys appear somewhat 'laissez faire' when it comes round to addressing the issue/problem....
 
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Badger said:
I personally thing the domain appraisal forum gets lower and lower in relevance as the days go by and am deeply surprised Ron and the boys appear somewhat 'laissez faire' when it comes round to addressing the issue/problem....
But what would you suggest the mods do? Remove your thread if it only says Mid $XX? Remove it if you have less than ___ posts? I'm really not sure that the mods can do anything about it without causing some major problems.
 
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domain.addict said:
But what would you suggest the mods do? Remove your thread if it only says Mid $XX? Remove it if you have less than ___ posts? I'm really not sure that the mods can do anything about it without causing some major problems.

Errrrr, did anyone mention removing NP$ for posting...????

There are at least 10 members I could name (but wont) who post 10/20 appraisals within 5 minutes. Now thats research for ya....

Now, you might say they are just trying to learn and they have as valid opinion as anyone else... And I say b****** to that.... The only reason the serial (waste of time) appraisers even bother to turn up is to work their way to 700 np$ (or whatever it is) to earn themselves their (in most cases) 1st domain...

And what this does is turn the appraisal forum into a mockery...

You have the time, i'll show you at least a dozen appraisals given in the last few weeks where utter rubbish is being posted. And posted by people without a shred of knowledge or interest for that matter of what they are talking about... I may bleat on like an old woman about it whilst my fellow domainers sit back and keep quiet with the view that "why do i bother myself trying to change things, you know what your domains are worth"... And I say, I learnt a lot here and have made a lot of money doing so.. And thus i want to give back something and not let scammers (for thats all they are) ruin it for the next bunch of NP members

The end....
 
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Badger said:
Errrrr, did anyone mention removing NP$ for posting...????
Yes, many times. Both NP$ and revenue sharing.
 
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