How do I value a domain

[domaingeezer]

Hi there

just wondering what the best way to value a domain is.

Is there any rule of thumb or any kind of algorythms?

I have seen Valuate.com which is quite good but how do they get those figures?

Thanks in advance

[draggar]

A great way (and free) is to post it in our appraisal forums here:

http://www.dnforum.com/f4/

(Use the adult appraisal section if the name is adult in nature - and look over the rules).

You'll get honest (the good and bad) opinions about the domain from those in it.

[URLtrader]

estibot.com

[domaingeezer]

That's great but how do other people value the domains?
What methods do they use?

Thanks

[hnh]

People usually price from experience and their targeted risk to rewards ratio .

[katherine]

Common sense...

[domaingeezer]

Common sense...

Little bit vague my friend.

Does anyone have any kind of formula?

How are Valuate.com and Estibot.com coming up with their figures?

Common Sense?

Someone somewhere on this forum must have some idea surely!

[Bill Roy]

Domaingeezer, automated valuation systems are generally regarded by serious domainers as rubbish, in fact they are often used to break the monotony of working with a laugh!

The problem is that out of the thousands of members of this forum there are thousands of minds who each value a domain differently. Some think only .com's have any value, some think only generics have any value, some think that the best investment for profit is brandables, and the list goes on. What you have to do is look at a myriad of factors when valuing a domain name, but most importantly as time goes on is your own experience.

If I had a definitive way of valuing domains that 51% of domainers would agree on I would be super rich, and what is more I would unlikely share it. The fact that I am not super rich shows that I have not got such a system. In fact the last person I know of who knew the value of a domain on the open market is named Nelson Brady and he was part of SnapNames, and look what's likely to happen to him!

All you can do is read, read, read, and think about your own worldwide experiences and hopefully combine them. Then with luck you will find someone who thinks along the same lines as yourself and is a buyer!

[domaingeezer]

Domaingeezer, automated valuation systems are generally regarded by serious domainers as rubbish, in fact they are often used to break the monotony of working with a laugh!

The problem is that out of the thousands of members of this forum there are thousands of minds who each value a domain differently. Some think only .com's have any value, some think only generics have any value, some think that the best investment for profit is brandables, and the list goes on. What you have to do is look at a myriad of factors when valuing a domain name, but most importantly as time goes on is your own experience.

If I had a definitive way of valuing domains that 51% of domainers would agree on I would be super rich, and what is more I would unlikely share it. The fact that I am not super rich shows that I have not got such a system. In fact the last person I know of who knew the value of a domain on the open market is named Nelson Brady and he was part of SnapNames, and look what's likely to happen to him!

All you can do is read, read, read, and think about your own worldwide experiences and hopefully combine them. Then with luck you will find someone who thinks along the same lines as yourself and is a buyer!

Thanks - so how do you value them again?

[Banned: theinvestor]

That's great but how do other people value the domains?
What methods do they use?

Thanks

They do it based on experience and from other past sales.
At the end of the day the value can be based on what you're willing to sell the name.

[notoriousfrench]

Past sales is a good start. Check out namebio.com.

[NetworkMsia]

experience.

look through thousands of past sales, you will get a rough idea of what a domain is worth.

[chimeara27]

thats how it goes.

[Luc]

The so called "experienced" is based on previous sales of similar domains, sales of your own domains, and with time, you develop a general feel for domain values based on this vast database of sales that's stored in the brain. It's hard to explain, and this is why you get a lot of "gut" responses. Most people have not sat down to identify the indicators they use for valuating domains, but if they did, they would definitely find them.

In domaining, just like in every other industry, this is the so called "gut feeling", and most people generally develop this after years in the industry.

This is something that CAN be done with an automated system for domains (though all have failed).

Here are a few examples of other industries relying on automated prediction models...

• The real estate industry uses automated systems of calculating real estate value based on HISTORICAL sales and industry trends.
• The banking and credit industries use automated systems for determining "credit" worth of an individual based on their income and HISTORICAL credit usage.
• The insurance industry uses automated systems for analyzing RISK and calculating premium costs.

Compared to domain valuations, the above three are MUCH harder to work with. It's not extremely hard to determine the value of a domain given enough HISTORICAL data. And that's the source of the problem. Historical domain sales aggregators have only recently begun to pop up (namebio, etc). The core component in valuation was always missing. Additionally, there have been a lot of sites over the years that produced very exaggerated valuations (in order to excite the domain owner and get them to purchase more appraisals) and this created a lot of confusion and gave the appraisal service a bad name.

With that said, I AGREE with the veterans here. There is no GOOD automated system for domain valuations.

This is why I became involved in Estibot (2.0) which powers valuate.com. We are working on creating a standardized model for valuating domains for both end-users and domainers (retail and wholesale), which are truly different prices. This is work in progress, and we are still quite far from a finished product.

The reason most domainers laugh at automated prices is because they sell to other domainers, and Estibot/Valuate.com (2.0) pricing largely reflects end-user prices which most in our industry never see. Hence the need for dual pricing, retail and wholesale (just like when you sell a car to a dealer VS selling it to an individual, though the gap in our industry is much bigger).

To answer your question... There are two values. The end-user value, which can be very broad, and the wholesale value (price a domainer is willing to sell for) which is a small fraction of the end-user value but directly proportional.

The best indicators are:

1. Previous sales of similar domains.
2. Industry in which the domain falls into (ex: financial, banking, domaining, etc).
3. The search popularity of the terms within a domain.

Good luck, and PM me if you need specific help.

Thanks,
Luc L.

[domaingeezer]

The so called "experienced" is based on previous sales of similar domains, sales of your own domains, and with time, you develop a general feel for domain values based on this vast database of sales that's stored in the brain. It's hard to explain, and this is why you get a lot of "gut" responses. Most people have not sat down to identify the indicators they use for valuating domains, but if they did, they would definitely find them.

In domaining, just like in every other industry, this is the so called "gut feeling", and most people generally develop this after years in the industry.

This is something that CAN be done with an automated system for domains (though all have failed).

Here are a few examples of other industries relying on automated prediction models...

• The real estate industry uses automated systems of calculating real estate value based on HISTORICAL sales and industry trends.
• The banking and credit industries use automated systems for determining "credit" worth of an individual based on their income and HISTORICAL credit usage.
• The insurance industry uses automated systems for analyzing RISK and calculating premium costs.

Compared to domain valuations, the above three are MUCH harder to work with. It's not extremely hard to determine the value of a domain given enough HISTORICAL data. And that's the source of the problem. Historical domain sales aggregators have only recently begun to pop up (namebio, etc). The core component in valuation was always missing. Additionally, there have been a lot of sites over the years that produced very exaggerated valuations (in order to excite the domain owner and get them to purchase more appraisals) and this created a lot of confusion and gave the appraisal service a bad name.

With that said, I AGREE with the veterans here. There is no GOOD automated system for domain valuations.

This is why I became involved in Estibot (2.0) which powers valuate.com. We are working on creating a standardized model for valuating domains for both end-users and domainers (retail and wholesale), which are truly different prices. This is work in progress, and we are still quite far from a finished product.

The reason most domainers laugh at automated prices is because they sell to other domainers, and Estibot/Valuate.com (2.0) pricing largely reflects end-user prices which most in our industry never see. Hence the need for dual pricing, retail and wholesale (just like when you sell a car to a dealer VS selling it to an individual, though the gap in our industry is much bigger).

To answer your question... There are two values. The end-user value, which can be very broad, and the wholesale value (price a domainer is willing to sell for) which is a small fraction of the end-user value but directly proportional.

The best indicators are:

1. Previous sales of similar domains.
2. Industry in which the domain falls into (ex: financial, banking, domaining, etc).
3. The search popularity of the terms within a domain.

Good luck, and PM me if you need specific help.

Thanks,
Luc L.

What a great and thorough response - Thanks

[Jessica320]

Get the exact search results on Google Keyword Tool and maybe you'll get an idea of how popular or unpopular it is and therefore how valuable or unvaluable it is (there's no "unvaluable" word by the way, just something maybe brandable).

[Acro]

I consult the oracle.

[lotk.com]

I just use my gut feeling... if I feel like I am getting a deal, then I buy.

[Acro]

or any kind of algorythms?

Incidentally....Ancient Greek 101.

Algorithm from algorithmos - arithmos is the number.
Rythm from rythmos - they sound similar but are written differently.

Compare Αριθμός & Ρυθμός.

[MAllie]

Can sedo's free pricing be used as a guide? I know they seem to use a base around $100, but if they say a name is worth more is this useful information or just sedo's take on things?