What is domain name appraisal valuation?

Domain name valuation is a collective opinion of assessors who estimate the value of a domain based on criteria determined by the market demand and industry standards. Domain appraisers do not determine the rule but set the standards for what is considered to be a valuable domain name. Assessors are typically seasoned domain sellers who know what factors makes a domain more or less valuable than others. Getting a domain appraisal by a third party can be helpful when determining a listing price for a domain and can be used as leverage during negotiations. All assessors usually price the domain to sell at fair market value so all estimates should be treated as a range rather than an absolute to make it easier to sell.

Factors Used when Evaluating a Domain Name

Evaluating a domain name involves weighing all of the following factors to properly appraise its value

Domain name extension

The value of any domain name depends on the extension: .com, .net. org. info and etc. Domain names that end in ".com" are generally the highest valued names since ".com" is the most recognizable and popular name extension

Meaning of the domain name

The meaning of the domain name may matter but there are domain names that do not represent anything but are still able to get traffic to it based on its content.

Marketability of the domain name

If the domain name is a popular word or term, it may make the name more marketable to potential buyers, hence making the domain name in demand.

Memorability of the domain name

What good is a domain name that no one can remember? Domain names should be easy to remember like a home address or phone number.

Number of words in the domain name

Desirable domain names should contain no more than three words because that may make it harder to sell.

Search volume of keywords in the domain name

Getting accurate traffic information can help determine if a domain was intentionally searched or resulted from content relevancy

Length of domain name

Longer domain names are usually harder for domain investors to sell, but there are instances where that isn’t the case. For example, some end-users use variable spellings of their company name. The importance of the domain length is determined on a case-by-case basis.

Brand-ability of domain name

This appraisal criteria is based on the fact that certain words can easily be branded and be synonymous with a business, making it more value. However, this is not true in every instance. There are cases where some of the oddest words have been branded by businesses

Pronounceableness of the domain name

If someone hears the domain and cannot make sense of it, they certainly won't be able to spell it right and won't be able to get to the domain so it is important that good domain names can be easily spoken and heard

Current related industry condition for domain name

The value of a domain name also depends on demand. Some industry research will be required to properly determine the value of industry-specific words.

Numbers present in domain name

Numbers usually lower the value of a domain name because it becomes too specific and not generic enough for most people to remember.

Amount of hyphens present in domain name

The use of hyphens lower the value of a domain name because it breaks up the domain and most people would forget to include it.

Domain name misspelling

These errors will reduce the domain name value because it won't redirect people to the correct site so in order to combat this would be to buy all possible spellings of the domain name and redirect it.

Age of domain name

The age of the domain is an indicator of when the domain was in demand. It can also be an indication that has been more than one type of content under that domain that took traffic there. Sometimes traffic still comes to the domain based on the old traffic or the exact opposite can happen too where traffic doesn't go to the domain based on the old traffic

Domain name singular or plural

This small difference may result in different valuations. While both singular and plural domain names can be sold quite easily, it really depends on the demand coming from sellers and purchasers

Amount of traffic domain name receives

While it is important and valuable to know how many times this page has been viewed, this number needs to be taken into context. Sometimes a page is viewed many times but people never come back to it because the content was not relevant to what they were looking for. So analyzing the value of a domain based on traffic also required a full analysis of the site content.

Comparable sales

Knowing this can help set a good jumping-off point for determining a value for the domain but it still needs to be like comparing apples to apples. The sites need to be of equal length, age and quality of content.

Fair market value

The bottom line is comes down to a realistic estimate of how much a domain will sell for based on the set criteria for appraisals. A domain can have all good markings but it its value is based on the standard acceptable price that it would probably sell for based on user demands.