How to cost a Domain Name
You’ve determined on a domain name for your new business, and the domain is by now registered and for sale. How much should you be willing to pay? This is becoming a common question, as so many quality domain names have already been taken. While there is no technical method to determine a precise value for any domain name, there are some deliberations that go into formative a reasonable ballpark value for that domain name you want. Please read on, and learn about some of the techniques professional domain assessment companies make use of to ply their trade.
Valuation Factors
There are quite a few technical factors that go into determining what a domain name is worth, and there are differences of opinion as to the relative importance of the various factors. Here we will examine a number of commonly considered parameters in domain valuation. This collection is not necessarily meant to be all-inclusive, but is instead intended to give you a flavor of many of the fine points to consider.
One of the most significant considerations in valuing a domain name is the “TLD,” or Top Level Domain. This is the additional room that appears at the end of the domain name, such as .com, .net, .org, etc. All other things being equal, a .com name will generally sell for about four times the otherwise equivalent domain in one of the other common global extensions, such as .net, .org, and .info. The .mobi extension, utilized for content to be delivered to mobile devices, is rapidly gaining popularity and value, especially for domain names suitable for such devices. Some country specific domains, such as .co.uk and .de (Germany) are very prestigious, and can also authority high prices in certain cases. The .TV extension, later to hopefully be used in connection with internet enabled TV, results only infrequently in high value sales at current (until hardware, distribution, and media companies resolve their mutual “cut of the pie” concerns, there is likely to be little content to drive this market).
An extremely important consideration in the value of a domain name is the number of words it contains. Single “real word” domains (no misspellings or abbreviations), especially in easily monetizable internet industries, can be enormously valuable, particularly in the .com extension. Two word domains, again without misspellings or abbreviations, can also be quite valuable, as long as the domain name can easily be monetized, and the TLD is of high quality. Values really plunge when you get to three words or more.
Domains containing misspellings, abbreviations, hyphens, characters not on a standard keyboard, and other oddities often have very little value. Also, domains containing phrases that are trademarked may be worth nothing, as the trademark owner may be able to summarily confiscate the domain.
The extent to which a domain can be monetized has a major impact on its value. Domains in the sex, financial, and health industries often top the list in terms of high value sales. Domains related to industries that cannot easily generate revenue on the web will usually have little value.
Generic domains tend to be more valuable than non-generic ones. A generic domain is one that contains only real words (ones you can find in a dictionary), and has no contribution from proper names (first or last). Generic .com domain names in highly monetizable industries can be immensely valuable, and are for the most part very hard to obtain (without spending a lot of money!).
The number of letters in a domain name also affects its value. Three letter .com names can be quite valuable, even if they mean nothing. Four letter .com names usually need to be pronounceable to have value, but they need not necessarily be real words in the dictionary (cool sounding four letter .com names can be very brand able, even if they are made up). When you get to five letters or more, value is driven by quality of the word or words once you start getting over 8-9 letters, value tends to reduce a lot, unless the name is highly monetizable.
The extent to which a domain can be branded may be very significant in determining value. Domain names that are easy to say and remember, easy to type in, highly reflective of unsurprising monetizable content, and/or generate a lot of “type-in” traffic (people typing your domain name directly into the address box in their browser rather than finding your domain via a search engine) are highly sought after, and may transact for important sums. The size and abundance of the market to which the domain name applies is also significant. This directly impacts how easily the domain name can be monetized. Unnecessary to say, crop and services that do not lend themselves to e-commerce will most often have little value.
We could go on almost forever listing factors that crash the value of a domain, but the above gives you an intelligence of what to think.
Where’s the complain?
You’ll become aware of the discussion thus far has presented no magic formulas for computing the right price to pay for your new domain name. I would love to give you a cool formula with lots of neat math symbols, but miserably things aren’t that simple or elegant. In order to be grateful for come again? You are going to have to disburse; you call for to learn a few belongings about the domain following market.
First, there is way more supply than command. This at first may sound encouraging, but fatefully it isn’t. Most domain resellers are very green, and tend to price their domain way too far above the ground, and as a result force buyers away. Haggling often results in little group in the price.
Second, the really great names, one or two real word .com domains in high traffic, high margin internet sectors are in essence all bought up. They do sometimes become on hand for sale, but always at extravagant prices.
Third, you have to be very careful when buying non-generic domain names (domains containing words that are not in the dictionary, or domains containing words that are in the dictionary but combine to form an unusual phrase that the courts will not consider “public domain”). These domains may be protected by a trademark. In such cases, the trademark owner can sue for ownership in court, and quite possibly be able to confiscate your domain without remuneration.
In final
My hope is that this article has helped you to become a more educated domain buyer. The main takeaway should be that unless you have a truly urgent need to obtain a specific domain, you should use common sense principles and not overpay. Remember, in spite of the fact that so many good names are taken; most domains just sit and wait at aftermarkets like Sedo and Afternic since of the vast supply project. If the owner of the domain you want will not sell for a sensible price, try to be original and find alternatives, like using a dissimilar TLD, pluralizing, reordering the phrase words, etc.
The internet domain market will never lend itself to discounted cash flow pricing like financial securities, and the value of a domain is really nothing more than what the market will bear. In the end, values are determined by sale prices of similar domains. This article has with any chance armed you with that knowledge so you can consult with poise.
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