Domain Name Valuation
Investing in domain names comes with a lot of inefficiencies and ‘guesstimations’ when it comes to asking for/offering a fair price during a domain name transaction. To be plain, the domain value is determined by how much the buyer is willing to pay.
In my research, there has been a number of domain name valuation/appraisal tools which have come to the domain name industry. A few popular tools known amongst domain investors are:
1. Estibot.com
3. Godaddy Domain Name Value & Appraisal
As there are many domain appraisal tools available online, I will not try to be exhaustive in this blog. A list of other domain valuation tools and a corresponding short description of the methodologies employed by these tools can be found here: solvid.co.uk
Lack of Domain Name Valuation Standard
I am starkly aware that there has been much talk that the methods used by these tools are questionable. The accuracy, validity and applicability of some of the prices attached to domain names have been known to be very low.
There is certainly a need for agreement within the domaining community as to a method/ algorithm to determine the value of a domain name.
What is clear is that history cannot lie. The history of domain sales speak to the value of the domain product. This cannot be disputed. A history of domain name sales can be found at the following sites:
It is also agreed upon that the most valuable domain names are those with the .com extension. It is my personal opinion that other TLDs (.net .org .co) are not worth the investment especially for those who are just starting out as a rookie domain investor. This has been re-iterated by one of the greatest domain investing minds; Rick Schwartz (The Domain King)
I would encourage every domainer to follow Rick Schwartz on his twitter page as there are huge gems that are released on his blog on a daily basis.
Best Domain Appraisal Method : Domain Value
In my time as a domain investor, I have found a fairly reliable method of estimating the price of domain names. This I would regard as the best domain value calculator. Bear in mind that the industry is volatile and there is no hard and fast way of pinning a price to a domain. The price is impacted by a number of factors that cannot be controlled. That being said, it is not an exact science.
The method is called The Rosener Equation. This was made popular by a domain name broker named Andrew Rosener and published by DomainSherpa.com.
In my own words, the essence of the method is summarized as the amount of money you would spend on an ad budget for this exact match keyword for a one (1) year period. Since google is the most popular search engine and many users utilize google ads as a tool to promote their sites and products. Google is qualified to provide the details of the funds a merchant would spend to get ad clicks on a particular keyword. I believe this is an extremely accurate estimation of the value of the keyword or in our case domain names. It has to be stressed that the domain name must be the exact match.
I have prepared a script that will take the variables involved in this method and feed the results of the valuations in real time. There would be no need to do hand calculation. Go here to get domain value prediction calculation
I’ve been wanting to determine the value of our brand’s equity. That’s why I’m considering to look for a domain name value appraisal that I can possibly use. I never heard of the Rosener equation, wherein the method is summarized as the amount of money that I will spend on an ad budget for the exact match keyword.
The value of your Brand’s equity would be quite different from the estimated value of the domain name attached to your brand.
According to Google, the brand equity is: the commercial value that derives from consumer perception of the brand name of a particular product or service, rather than from the product or service itself. In that sense, brand equity would have to be something that you determine internally by means of analysing your customer acquisition and retention and how much it impacts your business.
This post was aimed at highlighting the value of the “domain name” attached to a brand, in other words, the monetary value of the http://www.example.com.
I liked how you explained that TLDs are not the best domains for beginners and opt for a domain name must be the exact match. It should have an impact on the kind of product and service you are trying to sell. A domain name is a big factor in achieving success for your business and deciding for one must not really be taken for granted. Thanks for making us all aware of it.
Ron,
Thanks for your reply. The exact match domain name is indeed a huge factor in achieving success in an online business or establishing a personal online presence.
I have seen many online businesses initiate huge advertisement campaigns with exact match keywords of unregistered domains and neglect to have those domain names registered. There is a huge opportunity loss as the type in traffic for the exact match domain is more likely to convert than the broad traffic. This type in traffic is targeted.