Assessing the value of a domain
The following are some tips to remember when trying to assess the value of a given domain name.
- Wait for the buyer to come to you - Added: 8/29/07 - Not always the case, but yields the best sale most of the time. While showcasing your domain on places like DNForum or large webmaster marketplaces will probably result in a quick sale, the most revenue will come from the end-user finding you!
- Wholesale vs. retail prices - Added: 8/29/07 - I like to call wholesale prices the price a domain will go for on DNForum. Retail is what the end-user will pay, the person actually using the domain. Again, if you can afford to sit on domains, do it. You want to wait for end-users to come to you.
- Type-in traffic - Added: 8/29/07 - One of the most important variables when determining the value of a domain. Granted, most domains people use for development these days have no type-in traffic, but if your domain does, it will significantly change the price. People are paying up to 10 years worth of type-in traffic revenue these days (revenue from people taking their domain, and pointing it to an advertising page through a network like Sedo or Fabulous).
- Some of the most valuable domains don't have a predictable price. - Added: 8/29/07 - The easiest (originally i said easiest... wrong choice of words. i mean cheapest) way to make money in this business is to buy unique, obviously brandable names for cheap that you plan to hold onto indefinitely. You sit on these domains, waiting for the buyer to come to you. Lets say for example you owned AffiliateConnect.com (i dont even know if this is taken or not, just the first example I could think of). Now lets say a major company comes along and creates a software product called AffiliateConnect. Gold mine... an easy 5 figure sale when they inquire as to whether you are willing to sell the name. This is a good example of a domain that is worth nothing to most people, but $10,000 to others.
- Its all about .com - Added: 8/29/07 - The difference in value between the .com and the .net of a given name is usually exponential. Lets take a generic product like laptops. Laptops.com is definitely a 7 figure domain. While laptops.net is probably in the $25,000 - $50,000 range. You can generally assume the value difference from a .net to a .com starts at 10x. A $1,000 .net means the .com is at at MINIMUM $10,000.
- The reality, prices are insane - Added: 8/29/07 - .com domain prices are going through the roof. Three letter .com's with good letters (no Q's, Z's, X's, etc.) NEVER sell for less than $10,000, and that is the wholesale price. Two letter .com's with good letters generally start at 50-60k and go up, wholesale. So what can you do as a new domain investor? People may disagree with me, but my opinion is to go after .info's. .info in my opinion is the best of the new TLD's, and a good long-term investment. At the same time, you can slowly save money from your web projects and attempt to purchase solid .com's as often as you can. But again, the market is quite insane at the moment, and not showing signs of slowing down.
- The issue of .info's being used for spam - Added 9/10/07 - People worry that the spam abuse with this TLD have permanently hurt their value. Why do I think .info reputation can rebound in time? Because from what I've seen with search engines. How recent was it that being penalized or banned in Google was the end of the world? Now you can at least inquire about the situation, and get some kind of response/acknowledgment. What I'm getting at, is the value there is obvious. A .info is a very friendly TLD that would sound great in radio/television ads. Even if a given domain was previously banned or penalized, it can still be resolved back to neutral status. Given the speed at which things are changing, considering a .info a 5+ year investment is extremely safe in my opinion. ESPECIALLY with what the alternatives are (biz? .name?), and the speed at which things are growing and changing.
I will continue to add pointers and advice to this thread over time.
