Domain Name Value | How Do You Calculate Your Worth?

Knowing your Domain Name Value that you own can make a huge difference should you ever decide to sell it. Whether you own a simple blog or a thriving eCommerce site in our increasingly digital world. Eventually, there’s a lot of money to be made by buying and selling domains online. There are only so many good addresses to go around.

Having a general idea of what your investment is worth can give you the upper hand during negotiations. If you’re ever approached by a person or company that wants to purchase your domain, they’ve probably already looked at the hard data and appraised it themselves. The last thing you want to do is put the ball in their court and get ripped off.

By knowing how much it’s worth, you can offer a fair price and negotiate from there. From a practical standpoint, domain names are simply part of a web address. However, they also play a larger role that extends beyond the confines of the World Wide Web. Businesses rely heavily on domains for advertising and brand identity.

The domain is also directly associated with the company and how it does business. You can use this to your advantage and gauge how much interest your domain name really holds with a potential buyer. If the buyer is very serious about making a purchase, your knowledge of the domain’s worth can help you get the most money possible.

What Is A Domain Name?

Simplistically, a Domain Name is an address that you type into a website browser address bar, to get to a particular website. In short, it’s your website name or the address where Internet users can access your website. It’s used to find and identify computers on the Internet.

To enumerate, computers use IP addresses, which are a series of numbers. However, it is difficult for humans to remember strings of numbers. Because of this, domain names were developed and used to identify entities on the Internet rather than using IP addresses.

For example, the domain name for jmexclusives is https://josephmuciraexclusives.com/. And in that case, a domain name is unique to every website (just like a fingerprint), and cannot be shared between different websites. In other words, a domain name refers to the memorable part of the URL.

Think of a domain name value as your phone number and a website on your phone. While they are connected, they are separate items.

You can change your phone (website) at any time, and still, keep your existing phone number (domain name), and just connect it to your new phone (new website).

Or, you can move your phone number (domain name) to a different phone service provider (domain name registrar), and still, keep it connected to your existing phone (your website).

Confused yet? Let’s do a simple illustration:

• I can purchase a new domain name (let’s say www.brandnewdomain.com) and connect it to this website you are on right now. All the content on this site will not change at all.  But the website will have a new domain name of www.brandnewdomainname.com, instead of www.josephmuciraexclusives.com
• Or, I can build a brand new website elsewhere, and disconnect www.josephmuciraexclusives.com from this website, and reconnect it to the new website I’ve built elsewhere. So when you type in the web address, you will be taken to the new website.

The key is that your domain name is not permanently stuck with any specific website.

However, you can disconnect it and reconnect it to any other website you want. But, keep in mind that the domain name can only be connected to 1 single website at a time.

How Is A Domain Name Value Calculated?

Within the domain name itself, there are two elements that could affect the final valuation.

The first part is called the second-level domain, or SLD for short. This is typically the name of the website itself. Companies often use their own name in lieu of a separate identifier. For the address Google.com, “Google” would be the SLD.

Then, there’s the top-level domain. The TLD is the short extension that follows the SLD. The most popular TLDs include .com, .org, and .net. However, hundreds of new generic top-level domains are also available.

As I mentioned earlier, there’s a lot to consider when you’re trying to determine the value of your domain name. To perform an accurate appraisal, you need to understand how these factors can make a website successful and why they’re important.

1. Relevant Keywords

Having solid keywords in your domain name can drive up the value significantly. Getting noticed online is all about Search Engine Optimization, which relies heavily on keywords.

Keywords are what people use to find new products, sites, and services pertaining to their particular search queries. If you have a keyword right in your domain name, the website will appear higher up on search engine rankings. Thus, increasing visibility.

Companies can spend several thousands of dollars just to get their site noticed. Many will utilize Google AdWords and pay for exposure on certain keyword searches. All of that can be avoided with a solid domain name, which is why this factor is important.

The most lucrative domains have utilized broad keywords that can easily be adapted to the needs of the buyer. Some examples include Hotels.com, Cars.com, and Insurance.com.

Big corporations snatched these up for millions of dollars and have gone on to do big things, proving that the large investment was well worth it.

2. Checking the Popularity of Keywords

If you’re unsure about any words in your domain name, you can turn to Google for more information. Google Trends allows you to see how the popularity of keywords rises and falls over time.

You can even see how many monthly searches are made. When you’re determining your domain’s value, use this tool to accurately gauge where those keywords currently stand.

While your domain may consist of a recognizable keyword, that doesn’t necessarily mean it’s relevant to what end-users are after. Check to see how popular the word is to determine how it affects the domain’s overall value.

3. Top-Level Domain

There are numerous TLDs available. However, most people are only familiar with the generic ones. Domain extensions like .com, .net, .co.uk, and more have been around for a very long time. They’re instantly recognizable.

As a result, most people stick with URLs that end with these extensions. Despite all of the fun and quirky TLDs that have been made available in the past couple of years, Internet users still view the old favorites as more trustworthy.

4. Regular Traffic

The success of the domain can also be a driving force during valuation. Established websites already have an audience, which makes things much easier for anyone who purchases the domain.

If the site is monetized, the value can go up even further. You would be giving a stream of passive income, so monetization efforts are always considered when appraising a domain name.

5. Domain Name Age

Domains that have been around for a long time have a higher value because they help with SEO. Search engines tend to rank established sites higher up on results pages.

Though, this only applies if the domain has been active. Parked domains or those that only display ads for monetization aren’t as valuable. Search engines like Alexa and Google pay attention to value-driven content. And so, parked domains don’t have as much leverage in negotiations.

You can also use the age of the domain and its contents during sales discussions. Sites with years of content hold a much higher value than those that were established only a few months ago.

6. Branding

This refers to how the domain name looks and feels. It can be difficult to apply monetary value based on branding, as your domain name’s appeal can be different from person to person.

Like I mentioned earlier, the domain name is something that going to be associated with the company or person who buys it.

A unique attention-grabbing domain is much easier to market than one that’s just a string of letters. Think about how your domain name could be applied to different industries. It doesn’t even have to be a real word.

If it sounds good as a company name, you may be able to find a generous buyer for it. There have been many instances where businesses changed their name to fit a domain rather than the other way around.

7. Number of Characters

When it comes to URLs, short and sweet is always preferred. Shorter domain names are easier to remember and can be used in a number of different ways.

Unfortunately, many short names have already been registered. This is especially true with a basic TLD like .com.

Most buyers would rather pay more for an available short domain than save money and have a new domain name that’s difficult to type out.

How Do I Appraise My Domain Name Value?

Now that you know what makes a great domain name, it’s time to start getting information about your own.

The details in the previous section, while important, are all theoretical. They should be used as a guide to get a ballpark estimate.

If you want more accurate data, you can employ the following methods.

Compare Your Domain to Recent Sales

When people sell a car, they usually check out recent sales data to see how much they can get for it. The same thing can be done with domains.

Many websites offer information about recent domain sales. These include sites like DNJournal or ShortNames.

While you can’t search these sites and get an exact match for your domain, you can take a look at transactions from the past few weeks.

Take a look at the domain itself and how much it went for. You can use the data to compare and contrast the quality of your own domain and come up with a reasonable starting price.

See What Buyers Will Offer For Your Domain Name Right Now

There’s no better way to get the real value of your domain than to put it up for sale. This may seem a bit drastic, but it’s incredibly effective. You see, estimations will only get you so far.

Your domain’s actual value is how much real people are willing to pay for it. Just because it seemingly fits all of the criteria doesn’t mean that you’ll get a ton of money for it. On the other side of the spectrum, you may think that your domain name doesn’t hold much value at all.

Only to find someone who has been searching high and low for something just like it.

Enroll your Website on Marketplace

This technique can be a bit tricky, but there are ways to minimize the risks. Essentially, you’re going to put an ad up for your domain on a marketplace website as if you were selling it. Then, you simply wait to see what kinds of offers come in.

To ensure that your domain name doesn’t actually get sold, you can apply a reserve to your listing. This reserve prevents the sale from going through unless a certain threshold is met. On domain marketplace sites like Flippa, you can set the reserve amount pretty high and hide the amount from buyers.

Most domain auctions last for about two weeks. During this time, people will view your ad, check out your domain, and make offers based on what they think it’s worth.

Because your reserve is hidden, there’s no outside influence whatsoever. Just real and honest information about the value of your domain.

Invest in Domain Valuation Tools & Services

If you want the most accurate information about how much your domain name is worth, a valuation service is a great option for you. These sites take care of all the research for you.

They’ll make comparisons to similar domains and consider every factor to come up with an estimate.

The great thing about using a valuation service is that the reports they produce are filled with hard data. Many tools will provide analytics for everything from page views to keyword values.

The following domain appraisal sites offer a convenient service that’s accurate and easy to use. They can determine your domain value and provide you with data to back up those findings.

Of course, there’s no guarantee that you’ll actually get what these domain valuation tools tell you. However, the information they provide can provide you with a realistic asking price to get you started when you want to sell.

Here are the Domain Name valuation Services to Check Out;

1. Estibot
2. GoDaddy
3. Sedo
4. Valuate
5. Free Valuator
6. MySiteWealth
7. Epik
8. Website Outlook
9. StatChest
10. DomainIndex

Takeaway,

Since the early days of the Internet, a successful domain name has held far more value than what most people think. Whereby, a thriving domain name is like a piece of digital real estate. If you own a sought-after piece of an Internet property, there may be people who are willing to shell out a significant amount of money for it.

Some of the most expensive domains ever sold were purchased with eight-figure price tags! While the chances of your domain holding that much value are pretty slim, you may be sitting on a relatively profitable commodity.

To get a better insight into what people would be willing to pay for your domain, you’ll have to figure out its estimated value. Domain valuation is a crucial first step in the sales process. However, you don’t have to be actively pursuing a sale to do it. Many owners utilize appraisal techniques to see how they can improve their website and increase the domain’s overall value.

What’s More!

Evaluating a domain and coming up with a monetary value is a holistic process. There’s no magic formula that will provide you with a price tag in a few minutes. The process involves looking at several factors and understanding the market.

As a website owner, it’s always good to know how your domain is doing. Whether or not you actually want to sell is irrelevant.

Understanding how much your domain is worth can help you bring your website to the next level. If you do decide to sell your domain, doing a bit of research or using one of the many available appraisal sites can ensure that you’re getting a fair deal.

With this in mind, I hope the above-revised guide was helpful to you. But, if you’ll have more suggestions, questions, or even recommendations, please leave them in the comments box or Contact Us.