Calculating the value or ‘correct price’ of a domain name is definitely NOT an exact science. Ask 10 different experts to appraise a domain and you will likely get very different answers and a large range.
There are, however, several different factors that can help you appraise the value of a domain and decide how much you want to spend on buying it. Or conversely, how much you want to raise from selling it.
The State of the Current Domain Market
Domain names will go up and down in price depending on how active and hungry the market is. In a downturn, companies may have less available cash to buy a domain name.
During Covid, even though there was a downturn in the economy as a whole, many domain names increased greatly in value due to the influx of new companies being set up and wanting to find the correct domain name.
Individual Demand and Timing (aka. luck)
I often see that domains are bought and sold based on what a particular company is looking for at that particular time. For example, a year ago I was looking for a domain name for a singing competition. In the end, I was able to register a domain at my registrar (distansing.com – since let go), however, I did enquire about eligible domains and would have bought one had there been the perfect domain.
Similarly, I sold a domain this year which was LLNN.com eg. pg21.com. It was a new company, and it was pure luck that a company happened to want to call themselves that and therefore wanted the exact domain name.
The same is true with certain topics. This year crypto, covid, and NFT domain names are popular and have gone up in value because they are seen as emerging markets. 5 years ago, they probably would have sold for much less.
SEO Domains
Many domain names are sold simply based on the SEO value. This could be an exact domain match (eg. nurseuniforms.com) or because of the incoming links and history of that domain. Expired domains which keep their age are more valuable to SEOers than registering a new domain as they have passed the stage of having to earn credibility with Google.
Number of Words
I very rarely would buy a keyword domain of more than 2 words unless there was some obvious branding attached. eg. Just Do It (note trademark issues). I actually am surprised when I see domain names sold for 4 figures which are just keyword domains of 3 words plus where the third word doesn’t help it.
For example, some domains that sold yesterday were:
- LAMusicBlog.com – $1,505
- MyRightWay.com – $2,788
- SleepDisorderChannel.com – $2,000
Source: namebio.com
I have not researched any of these three domains, so there could be SEO or Brand, or other value that I am not aware of. However, they are examples of domain names that at first glance seem to be sold for more than I would consider buying them for.
lamusicblog.com limits itself with the word blog. lamusic.com would be a far better domain name although is already used by an active company. I can’t see how this domain name can be used for anything other than a blog about LA music. Which doesn’t seem to be very monetizable or brandable as a blog generally refers to reporting on something. As an investor, I wouldn’t buy it at all as I don’t think that I would ever be able to resell it.
myrightway.com is a phrase. I haven’t done the research and could have some value as it is already being used. Alternatively, it could be used in the future by the person who bought it. Or, they are hoping that someone else will want to use that slogan in the future. Here, it is the word ‘my’ that bothers me. Is ‘my’ more valuable than the, them, your, a, etc.?
sleepdisorderchannel.com is probably the domain that bothers me the most. Perhaps bother is the wrong word! Let’s say intrigues me as to ‘why?’. sleepdisorder.com could be a good domain. Not a GREAT domain as the word disorder is a bit high level and negative. The word channel is a bit weird though. Is this a TV channel – that is what would immediately come to mind. Or a channel, as in a way to treat your sleep disorder? I am assuming that this was bought by, or potentially for an e-commerce store selling products to help you sleep.
Is the word ‘channel’ going to a good match for a store or will it just confuse potential end customers? Purely from a marketing point of view, I would also focus on the cure rather than the problem in my domain name.
This post is getting a bit long, so will continue in another post!