What’s your Domain Name Worth? Domain Appraisals and Pricing your Domain for Sale

Once in a while we receive an email from a customer asking the following questions: “I’ve been approached to sell one of my domain names. How do I determine what it is worth? Are there any valuation services I can use? What should my asking price be?”

While today’s domain name market is less frenzied than a few years back, individuals and businesses are more comfortable buying domain names than ever before, realizing the value of a concise, easy-to-remember domain names over long, cumbersome names and unrelated extensions. First time sellers should know domain valuation is highly subjective and pricing models are not easily applied. That said, there are some basic criteria to consider when determining an asking price:

• .COM’s are typically the most sought after
• Length, the shorter the better
• Generic words or terms with a wide frame-of-reference
• Whether the buyer is an individual or corporation

Really, a domain name is essentially worth what a buyer is willing to pay relative to your desire to sell – which might be slightly more than your registration fee, upwards to 5 or 6 figures for clear, concise, memorable top-level names. Start by asking what the buyer is willing to pay, get a dollar amount and go from there.

Many domain registrars and aftermarket companies offer appraisal services with prices ranging from $5.99 to $99.99 (US) or more. Since there are no guidelines or standards governing appraisal providers, legitimacy and accuracy can be tricky to gauge.

It’s important to know many people in the industry are skeptical of these services. At best, they may provide an educated guess by taking obvious factors into consideration ( eg. , type of extension, length, descriptiveness of the word(s), etc.) and comparing to other domain sales; at worst, they can be a flagrant scam. Try a free appraisal service like www.swiftappraisal.com as part of your research. If the offer for your domain name is sweet, you may want to pay for an appraisal after all. Forum threads devoted to domain appraisal are numerous – a quick search of some terms like “domain name,” “sell, “appraisal,” and “advice” will bring you a plethora of opinions.

Remember, the following factors make each domain sale unique (and cannot be accounted for by an appraisal service):

1. Timing. If you’re selling your domain because you need quick revenue, the value will drop. Conversely, if the buyer has a sense of urgency around acquiring your domain, the value will rise. Remember to capitalize on the moment – if your name is trendy today, you might not want to wait a year to sell it.
2. Them (the Buyer). Domain names are valued differently according to what a potential buyer can afford, as well as his/her plans, vision and attachment to the domain.
3. You (the Seller). What value have you placed on the name? Do you have ambitions or an attachment to the name yourself? Do you need to sell it? Are you currently making money on your domain? Do you know what it could be worth to you if you develop it out? What price do you need to recoup your investment?

After you have brokered the sale, consider a domain escrow service to complete the transaction. There are many to choose from, but escrow services protect both sellers and buyers from fraudulent transactions by: a) providing sellers verification of payment before a transfer is initiated; b) holding funds until a domain name is successfully transferred to the new registrant. Escrow services can also help overcome language and payment barriers, such as money orders and exchange rates.