There are multiple factors that determine the value of a domain name. I’ve covered them in detail in this post about domain naming tips but to recap, here they are in summary:
- Domain extension – .com best
- Positive radio test
- Avoids name hacks
- Avoids numbers and hyphens
- Shorter is better
- Incudes descriptive terms, keywords and locations
- Older (aged domains) are better
- Dictionary words better
There are several possible ways to get an estimate of a domain names potential value. These are the two most useful:
GoDaddy Domain Valuation tool
The GoDaddy domain appraisal tool uses comparable sales, keywords and the domain extension to provide a (fairly) accurate estimate of the value of a domain name.
The NameBio domain valuation tool requires a bit more guesswork, because it only returns completed domain name sales and not an estimate of value.
Using our example domain name “sydneymuscle.com” did not return any results.
But by separating that name into its two components you can arrive at an approximate value. Here’s the result for “Sydney”:
And here’s the result for “muscle”:
So, a fair price in the current domain market might be a few hundred to around one thousand $USD – roughly the same as the GoDaddy evaluation. When figuring out an estimate, remember two things:
- They are just guides and may not be what you can get if you try to buy or sell tomorrow!
- The domain name market is dynamic (just like the property and share markets) and prices are always open to negotiation.
Like any asset market, sellers will try to get as high a price as possible while buyers will try to get the lowest. However, the domain name market does tend to be a sellers’ market because:
- The supply of domain names (especially .coms) is finite
- If a domain is on the open market one of your competitors might buy it before you do
- Once a domain has been sold to an end-user (the name for a business who will use the domain name in a niche, rather than a domain flipper or investor) it may NEVER be available for purchase again.
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