Shakespeare’s Juliet may have said “That which we call a rose by any other name would smell as sweet”, but it’s a good bet that Juliet hadn’t ever tried to pick a good domain name for her website. It’s an even better bet that she didn’t try to place a value on the name when the time came to sell it, something more and more people are facing today. Whether you are selling your domain because you have closed up a website or you have decided to try your hand at the domain buying and selling game, you’ll need to know how much that domain name is worth.
There are stories of people who have found the perfect domain name and sold it for enough money to retire on. There are people who buy domain names that are slight misspellings of some famous, trademarked domain, in the hopes of getting traffic through typos which will make their name valuable as advertising space. There are people who buy hundreds of thousands of domain names through discount and reseller programs, feverishly snapping up expired names, hoping they have found several winners.
The bottom line is that any domain name is only worth what someone is willing to pay for it. There is no inherent worth in the domain, it has no physical property value, it isn’t a stock market commodity (yet); so the only real value is how badly someone wants that name for themselves. You may have the biggest and best collection of earthworm wrangling ropes ever made, but if you can’t find another earthworm wrangling rope collector to sell them to, they aren’t worth, well, dirt. Domain names are the same, so unless you have a name that someone else can’t live without, you will not be retiring on the sale profits any time soon. Fortunately, finding someone who is searching for a domain name is easier than finding an avid earthworm wrangling rope collector. All the above being said, there are some factors that are commonly considered to raise a domain name’s value. They are:
1. Length of name
2. Composition of name
3. Development and Popularity of the name
4. Prior Interest
Length of Name
In most cases, a one or two word domain name will have a higher value than multiple word domains. Correctly spelled common words and phrases have a higher value than obscure words and sayings, or misspellings. Domain names that are easy to say, spell, and remember and have easily identifiable meanings are the ones everyone is looking for, which obviously raises their value. Nike’s justdoit.com is a perfect example of turning a short, well-known phrase into a smart domain name. The more unmistakable and to the point the domain, the higher the value. Wormwrangler.com will work well for you, whereas earthwormwranglerropesuppliesandcollectibles.com is, while accurate, way too much.
Composition of Name
The way a domain name is put together also adds or detracts from it’s value. In general, experts recommend avoiding hyphenated names, so in the above Nike example, just-do-it.com would be of less value than the non-hyphenated name. The domain extension is also important, because people are still most familiar with .com. Even though other extensions are valid and useful, the first reaction of a visitor is going to be to type in flowers.com – not flowers.biz. Another thing to keep in mind is whether or not the domain would be a first choice for a potential buyer. For example, if I owned a beachwear business, I would consider buying sandtosea.com – but sand2C.com is a poor second choice. Shortened word forms and acronyms are only valuable if they are well-known abbreviations.
Development and Popularity of Name
Is there already a website built for your domain name? Having a well established site will increase the value of the domain. Several factors go into assessing the development and popularity of your site, including the age of the site, number of back links, and Google PR and/or Alexa ranking. The older, more established a site is, the greater the chance that you will have amassed a collection of relevant links to sites who also link back to you, raising your placement in search engine results. Having a high Google Page Rank and a high Alexa ranking will also increase your domain name’s worth – all of these tools help determine how popular a site is, and how often the site is visited. If you are selling the domain, someone else will most likely be putting up a totally new site on it, but the theory is that a domain that already has a good history will bring more traffic to the new owner. People will be typing in your domain directly, looking for your old site, and that will put more eyeballs on the new domain owner’s pages.
It is possible, of course, to have interest in your domain name without any effort on your part at all! If you have been lucky enough to register a name that someone happens to be looking for, they may approach you directly to ask if you would consider selling it. The price you will ask for should be based on the factors above, as well as how many such offers you have gotten in the past. If you’re getting several offers a year for your name from different people, you can obviously raise the price. If this is the case, you might be better off choosing to sell the domain through a domain auction, rather than directly to a buyer. Set a minimum price on your name, let all the previously interested parties know about the auction, and let them duke it out!
Determining the worth of your domain name is a very subjective process, because, again, it’s only worth something if there’s someone out there that needs to buy it. Visit some domain auctions and sale sites, and see what people are actually getting for the domains they’re selling. From there, follow the above guidelines to help you set a ballpark figure for the domains you have for sale. Using your common sense, keeping an eye open for trends, and having a little bit of imagination will help you in choosing domain names to sell. Whether this is a one-time sale or the beginning of a domain sales career, it’s important to understand your market. And a rose is still a rose, but redroses.com will smell a bit sweeter than my-red-roses.com.