Just like, you need to buy land to establish your business in the real world, you need digital land, aka Domain Name to establish your business in the world of the internet. Just like the land is valued according to the city, place, and address it is situated, Domain names are also valued according to some key metrics, which we’ll talk about in this article.
We all wish to go back in time and buy domain names like Microsoft.com, google.com, apple.com, and more. But you and I both know the concept of the working time machine has not yet been invented, and who knows how long we’ll have to wait for the time machine to come into existence.
But we don’t have to regret, sure most of the short and valuable domain names are already taken, but there is still plenty that can grow up to be big shots that are valuable. Maybe you have it in possession right now, maybe years ago, you just felt like doing something adventurous, and you ended up buying a completely random domain name. Years later, that random domain name can turn out to be worth thousands of dollars.
This scenario is more common than you might think.
We often look at some antiques in our house and wish that they are valuable. We need to look at our previously bought domain names from that perspective more often.
Saying that, don’t do anything ridiculous by buying stupid random domain names and sitting with your fingers crossed, hoping that someday a start-up will buy it from you. That isn’t investing; it is stupidity. You need to look at it as real estate; when you invest your money in real estate, you do thorough research about the area, the possibilities of growth, and stuff like that, and only after that do you go on to buy that property.
Likewise, there are a few metrics and a few important points that you need to keep in mind before investing in a Domain Name to make the flipping profitable. A better approach would be to learn the factors that make a domain valuable and then purchase domain names that have the potential to be profitable down the line.
Well, this is a lengthy introduction, but we hope you have more clarity in your mind than you did before. Now, let’s move forward to know how a domain is valued.
Domain Valuation is the process of determining the value of a given domain, it is similar to the process of valuing a company, but it’s much less intensive. This is also sometimes referred to as Domain Appraisal. The value of a Domain Name can be determined by looking at how much traffic it generates.
The factors affecting the domain valuation are domain history, such as if a domain has been previously sold or transferred before, any pending trademark infringement claims that might exist, etc.
Now, as we have covered the definition of Domain Valuation, let’s head to the process of valuing a Domain Name. Let’s start with, what are the factors that make a Domain Name more valuable.
Also Read: What To Do When Your Domain Name Is Taken?
Factors Adding More Value to Your Domain Name
Knowing is always better than not knowing. Whether you want to sell your domain or you are just curious about its worth. Trying to find out its worth is not rocket science. You first need to understand the factors that affect the value of a domain.
You can get a rough estimate of the worth of your Domain name. Well, the bottom line is that your Domain name is worth what somebody is willing to pay for it. But you must have a rough estimate to know the baseline of its worth so that you don’t undersell it if you ever decide to sell it.
There’s always a chance that your Domain Name turns out to be ideal for a particular start-up or it turns out to be important to acquire for an already established business. We hope that it does. And hope is not bad; it is the best of them all.
Overall, you can estimate your Domain name’s worth with the factors below.
1. The Associated Top-Level Domain
A Domain’s TLD plays a big role in valuing a Domain Name. A TLD like “.com” is the most popular option; it makes your Domain name more desirable to others. For example, something.com is way more desirable than something.xyz.
Well, of course, some other TLDs can be attractive to a buyer, like, .net, .org, and .co. It doesn’t mean that other TLDs are worthless; they can also hold great value if they make sense.
2. Keywords in the Domain Name
Domain names with keywords in their name are more valuable as this is a crucial aspect of SEO for websites. By adding keywords, you attract more organic traffic, which makes your Domain Name attractive to buyers. If your domain contains a desirable keyword, it can increase the value of your Domain name.
3. Traffic and Popularity
If a website is currently using the Domain name, the traffic on the website is a very crucial factor in calculating its worth. If the website receives good traffic, the value of the Domain name increases, and if it receives low traffic, the value decreases. Because if the domain comes with an existing audience, the buyer can leverage that traffic for their site right away.
Also Read: SUBDOMAINS: What Is It & How Is It Helpful?
If your Domain name is appealing, catchy, attention-grabbing, memorable, and unique. The brandability of your domain is high. Domain names like this can grab buyers’ attention and attract them. Domains like Instagram.com, facebook.com, google.com, and more, have a higher brandability; they are unique and attention-grabbing.
If your domain name is shorter, it is worth more, given that it makes sense. Shorter domain names tend to be more valuable as they are memorable, easy to share, and more marketable.
Finding out the worth of your Domain Name
We have understood the factors that affect the value of your domain name, but we’ve not yet understood how to know the value of your domain name in numbers. Numbers are what matters; who cares how many eggs a person can eat unless there is a reward involved.
There are many ways to find the value of your Domain name; we are sharing a few. They don’t need to be taken all at once or in this particular sequence. But, use them as you like and know your domain’s worth.
I. Research the rate of similar domains
A good starting point would be to research how much are similar domain names worth. How much are they selling for or have been sold for? This will give you are price range.
A great way to do this will be to use websites like DN Journal, or Sedo, which compile the data from different marketplaces to show you which Domain Name has been sold at what price. Or, if your Domain name is concise, you can also find a website called ShortNames very useful. This website is similar to Sedo, DN Journal but specializes in Short Domain names.
You can also find which kinds of Domain names are selling at higher prices through these databases.
II. Using a Domain Estimation Tool
There are a lot of estimation tools available on the internet that will give you an accurate idea of what your domain is worth. These tools will estimate the worth by taking into account all the factors that affect the value and comparing your domain to the data of recently sold similar domains.
In short, these tools will do all the heavy lifting for you, giving you an accurate estimation of the worth of your domain name. The most widely used domain estimation tool is EstiBot. You just have to enter your domain name into the tool, and voila! You’ll get an accurate report of how much your domain name is worth.
Beyond the general estimation, these reports will provide you with other relevant data as well, like, similar domains recently sold, search volumes of those domains, keywords, and much more.
III. Consider Selling your domain; find out what people are willing to pay for your Domain
Doing research about the prices of the recently sold similar domains and getting an estimation from an estimation tool is all fine and good. But, these practices won’t tell you the exact price you can sell your domain for. There is another rather non-technical factor that comes into account while we buy things; emotions. If we find something that connects to us or connects to the soul of our idea or business, or start-up, we tend to try our hardest to get it.
There is only one way to determine how much your Domain name is worth accurately, and that is to consider selling it. You can create a high reserve price (minimum price) if you don’t want to sell it. So if someone agrees at that high price, you’ll be satisfied if someone buys your domain at that price.
Flippa is the most widely used platform to do so. It is an online marketplace for domains, SaaS assets, eCommerce, etc. You need to enter all the relevant details about your domain and set a high reserve price. The more the reserve price, the less likely people will buy your domain.
Our goal here is not to actually sell your domain (Well, if you decide to, you can), but to get the bids of different potential buyers to get an idea of how much they are willing to pay for your Domain.
You never know; there might be someone who goes on to buy the domain at a super high reserve price. We can hope for that. And you know, right? That hope is not a bad thing.
Congratulations, finally, you know the worth of your domain name!!
How much is my domain name worth? It would have been a difficult question to answer, but now you’ve successfully answered it. Curiosity won, and you’ve become smarter than you were yesterday.
This question doesn’t have a one-fit-all answer as the value of different domains is different. So, we’ve learned to get to the answer. Learning to get to the answer is a valuable skill.
Now you can know the worth of any domain. Congratulations for that too.