Domain Name Valuations

Understanding valuations is important when buying an aftermarket domain name

If you are reading this you most likely have been doing research into domain name valuations. Beware of free appraisal services, because they are inconsistent, oftentimes arbitrary, and potentially misleading.

How are valuations calculated?

Domain names are inherently valuable for their meaning, brandability and for what they can do to increase the visibility of your online presence. If you're curious about how to determine the value of a good domain, read further.

High quality domain names exchange hands for thousands, tens of thousands, even millions of dollars, nearly every day. Quality domains are becoming a hard item to find, and the values of quality domains keeps going up year over year.

Take a look at some recent public domain sales:

Domain	Price	Sale Date	source:  DNJournal
417.com	$169,000	2/3/2016	See Similar Domains
Genetics.com	$150,000	2/3/2016	See Similar Domains
SPV.com	$115,000	2/3/2016	See Similar Domains
Penis.com	$110,000	2/3/2016	See Similar Domains
BLT.com	$65,500	2/3/2016	See Similar Domains
TPZ.com	$60,900	2/3/2016	See Similar Domains
Stroke.com	$60,000	2/3/2016	See Similar Domains
3568.com	$45,700	2/3/2016	See Similar Domains
4728.com	$41,200	2/3/2016	See Similar Domains
1251.com	$39,210	2/3/2016	See Similar Domains

What makes a domain name potentially valuable?
And, how can a valuable domain impact your business?

The answer is the brandability of the domain. Brandability is comprised of several important factors, including the length of the domain (shorter domains are traditionally more valuable), the ease with which the domain can be pronounced and remembered, and the domain's descriptive power. For example:

• Does the domain name aptly describe your company, product, or service offering?
• Is it something that can be remembered once it has been heard?
• Will your domain name tell a prospective customer about your business before they visit your website?
• Is the name something that can could be used across multiple markets or industries?

Or perhaps your name does not mean anything, per se, but has the potential to be leveraged to become one of the next household brands. These characteristics are the hallmarks of a valuable domain name. The more of the above criteria your domain matches, the more valuable the domain you are after is worth.

The law of supply and demand is stacked in the
domain name's favor

In today's Internet economy, there are more than 200 million domain names in commercial use. While this number will increase as additional gTLD (generic Top-Level Domain) extensions are added, the number of premium dot com domains will remain finite.

Further, with the acceleration of social networking, internet media, advances in mobile telephony, and unprecedented global connectivity, the demand for valuable dot com domains has continued to exceed the available supply. From this perspective alone, your premium domain investment will serve you well. As one of our customers recently put it, the “dot com is and always will be the equivalent of beachfront property.”

You can't afford failing to choose the right domain

You're with a young start-up; or perhaps an already established company -- and you've been charged with purchasing a domain name for your company. Either way, you may be thinking that you want to spend the least amount of money possible on your domain.

The truth of the matter is that your domain is one of the most important business investments you're going to make.

In this day and age, you have to have a good domain if you want to effectively compete. A great domain can lead to competitive advantage.

If you're considering spending as little as possible on your domain name, you need to carefully consider the opportunity cost of going with a less valuable alternative. Read more about the top issues people tend to make when purchasing a domain.