Domain Name Tutorials

Domain Appraisal- Is your domain name or the one you’re considering buying really worth 7 figures? Domain appraisal is a good way to get a firmer grip on the going price for domain names. Read on for more information about domain name appraisal.

Two Times for Domain Appraisal

There are two times to consider a domain appraisal. One time is before you purchase a domain to make sure that you’re spending your money wisely. The other time iswhen you’re selling a domain, at which point a domain appraisal helps to make sure you’re asking and/or holding out for an appropriate price. A domain appraisal is separate from a site appraisal, which considers not just the domain name but the website that has been built up with that name.

Because an appraisal is done by a third party, it is useful to have in a transaction. If you have an appraisal from a reputable appraiser that says that the domain name you want to buy isn’t worth as much as is being asked, you may be able to talk the seller down, using your appraisal as evidence. If an appraisal is for a domain name you own and are selling, you can use it to justify the price to a buyer who is trying to get you to accept less.

How a Domain Appraisal Works

Domain appraisers use a combination of known factors combined with their own "secret sauce" the way they’ve devised to rate these factors in assigning a value to the domain name. In other words, domain appraisals are educated guesses based on a combination of fact and opinion on how well a domain name will perform, all other things being equal. The factors involved in ascertaining a domain’s value include facts about the domain name itself, as well as external facts.

Among the factors about the domain name itself are these:

•　How memorable and easy to type it is- A common top-level domain (TLD) especially .com, the length, the catchiness, and use of letters only (as opposed to inclusion of hyphens, underscores, and also numbers, in most cases) are likely to make a domain name more memorable, as well as reduce misdirection due to inaccurate memory or typos

•　Translates easily from spoken language to written language- This is a combination of a domain name that is easily pronounced, memorability and choosing words with unambiguous spelling

•　What it means- Popular topics and real words are likely to draw more traffic than random characters or esoteric topics; in addition, some topics are more suitable for commercial development than others (for example, an unusually spelled proper name is less likely to fit a product), and whether it is a generic term or a brandable term may come into play. In order to avoid legal issues, the domain name and/or typos that are likely to be made of it should not infringe a trademark.

External factors include these:

•　Previous traffic- A domain name that has been nurtured and grown will have more value than one that wasn’t; this also tends to make older domains more valuable. Recent traffic may be considered separately: a current event or movie can make a site that had previously performed unimpressively a sudden hot item

•　Search performance- Whether or not the site has been developed, a large number of searches can make it a desirable property, so domain names that include popular keywords tend to be more valuable.

•　Value of comparable sites- The appraisal price, asking price, and selling price of closely related or similar domain names can also give clues as to the potential value of a domain name

Obtaining a Domain Appraisal

There are free domain appraisal services and those that are paid for. A site that will broker a sale for you may offer appraisal as a service. Appraisals may be based on more or fewer factors and have a range of prices to match how extensive they are. Some appraisals will help you put your domain name in the context of other similar domain names, and break down the analysis for you. If you have multiple domains, you may receive a price break for appraisals, and the appraiser may offer you a figure for the collective value of your holdings, as well as individual values for each domain name.

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