How to Decide What a Domain is Worth
It’s hard to figure out how much money a domain name is worth. Unlike other assets, each domain name is unique.
In this article, we’re going to look at how you can determine what a domain is worth in case you decide to put it on the market or you get an unexpected offer.
Why It’s Difficult to Put a Price on a Domain
To value a house, you can start by looking at what other homes in the neighborhood sold for. Calculate a price per square foot, then adjust for other factors, such as if the house is in better condition, has a larger lot, or offers a better view.
Because each domain is unique, domain valuation isn’t as simple as valuing a house. You need to consider many other factors, as we explained in a previous article.
Still, there is value in looking at sales of similar domain names just like you do with similar houses.
Millions of domain names have sold on the secondary domain name market. While most of these domain sales are never publicly disclosed (especially the largest ones), some sales are disclosed. You can use this information as comparable data when pricing domains.
How do you Get Data?
There are two major websites that collect historical sales data and present it in a meaningful way for domain investors to use.
1. NameBio – NameBio boasts 1.6 million domain sales in its database totaling $1.8 billion. It has robust search features and a nice user interface to help users find relevant domain names
Some of the search options include:
- Keywords and where they show up in a domain (start, end)
- Search by top-level domain extension
- Category search, such as health or sports domains
- Patterns, such as domains that take the form consonant-vowel-consonant-vowel
One nifty feature is that you can send a permanent link to the search results to another person. Let’s say you want to show a buyer how much domains with the word ‘loans’ in them generally sell for. You can send them to a link to the NameBio page for ‘loans.’
NameBio operates on a freemium model and the free version is sufficient for most people. With a paid membership you can view more search results and domains that sold for less than $100. (The free version only shows domains that sold for $100 or more.)
2. DNpric.es – This sales database says it has over 2 million domain transactions worth over $7 billion.
Its interface is more technical in nature than NameBio, but with a bit of work you can perform lots of search parameters such as:
- Keywords including where they show up in the domain
- Top-level domain
- Time frame
Similar to NameBio, DNPric.es has a freemium model. Paid users get more searches, more search parameters and can also connect via API.
A Word of Caution
While their databases can be helpful, NameBio and DNPric.es both collect data from multiple sources and therefore it is difficult to verify sales data.
Both services get some of their data from online and offline auction venues. Occasionally, bidders fail to pay and the domain doesn’t actually sell for the price recorded in these databases.
DNPric.es also shows data for some transactions that included both a website and a domain rather than just a domain.
Still, the vast majority of data in these databases is accurate.
Using the Data
OK, so you’re selling a domain name related to loans and you’ve collected some data.
The top public sale of a domain including the word ‘loans’ is Loans.com for $3 million. That happened a long time ago, back in 2000. Plus, your domain probably isn’t as good—it’s a longer two-word domain, and those don’t typically sell for as much.
Look at some recent sales that include the word ‘loans’ to target a price range. Here are some:
With the exception of CollegeLoans.com, most of these prices are quite low. That’s because these are investor-to-investor domain sales. They are mostly expired domain auctions rather than sales to end users who will actually use the domains. Generally speaking, end users are willing to pay more.
To filter out these investor-to-investor sales, take a look at the venue where a domain sold. Almost all sales at GoDaddy, NameJet, and DropCatch are either expired domain sales or investor sales.
Other venues feature more end-user sales. Sedo’s sales of two-word domains are often end-user sales. Almost all sales at BuyDomains are end-user sales. Here are recent sales from these two venues:
- NeatLoans.com $1,500 BuyDomains
- EvolveLoans.com $4,652 Sedo
- MaritimeLoans.com $2,000 Sedo
- LoanSpring.com $2,000 Sedo
- HeroLoans.com $2,650 Sedo
- LoansQuickly.com $1,688
Looking at sales at Sedo and BuyDomains helps home in on the value. It eliminates most wholesale transactions.
It’s also smart to check the exact domain name you are selling. You might find out how much it sold for before you owned it and use this as a benchmark for pricing.
More Sales Signals
Remember, only a small percentage of domain sales are ever publicly disclosed.
To see if a domain you’re selling or buying was sold in the past, take a look at historical Whois records for the domain.
Review these archived Whois records to see if a domain has been bought or sold before. It’s helpful to know this even if you can’t figure out the price.
Also, review DNJournal’s list of the top sales of the week, year-to-date and all time. While these lists are for the top public sales and thus contain many outliers, reviewing these lists will help you understand domain trends and learn the features that make a domain valuable.
Ready, Set, Sell!
It’s exciting when someone inquires about buying one of your domains. Do your homework before responding to their offer. Check domain sales databases for comparable sales to respond with an informed asking price that you can back up with data.