Domain Name Appraisals: Are They Worth the Cost?
By Steve Ashton
Have you ever thought about having one of your registered domain names appraised, because you were considering selling it and wanted to know what a fair price would be? Maybe you’re just curious about how much your domain is worth? Did the high fees for detailed appraisal services turn you off of the idea, or are you still considering it?
Here’s a simple fact: Domain names, just like any other product or service, are worth whatever the market will bear.
What that means is that if a domain appraiser tells you that your domain name is worth $2500, but the most you can raise in an auction is $50, then your domain is really worth $50, not $2500. It’s basic economics. The market works on a supply-demand system. You’re supplying a certain domain name, and its value is entirely determined by how much demand there is for that name. If only one person in the world is interested in buying it from you, its value will be pretty low (unless of course you’re a squatter who jumped on a domain someone let expire, and you’re demanding an obscene price for it). On the other hand, if thousands of people desperately want the domain name that you’re selling, the price some people are willing to pay can skyrocket, making your domain name worth thousands.
How domains are appraised
Domain appraisal isn’t an exact science. A number of factors are considered, ranging from the length of the domain to the domain extension. Here are some of the considerations:
The domain extension – A .com domain is always valued higher than a .net, .org, or other extension for the same name.
The length of the domain name – Domains tend to be valued highest if you avoid going over 12 – 15 characters.
Dashes and Numbers – You’ll receive a higher appraisal if you avoid using numbers and dashes in your domain name.
Domain Prefixes – You’ll receive a lower appraisal if your domain name starts with any kind of prefix, whether it be an e, i, the, an, etc.
Name Recognition – If you’re able to register a domain that can be easily recognized, such as one common dictionary word, you’ll receive a higher appraisal.
Name Relevance – If your domain specifically tells what services or products could be offered by its web site, then you’ll receive a higher appraisal.
Marketability – Could the domain name be marketed and promoted easily? Does it lend itself to an easy logo and site campaign? Can it be pronounced easily in a radio campaign without being confusing, such as having multiple possible spellings? Does it look attractive in print? If the answer to each question is yes, then you’ll receive a higher appraisal.
Worth the cost?
If nothing else, you need to understand that domain name appraisals are extremely subjective, and you could receive very different appraisals from two different appraisal companies. In a general sense, unless you absolutely must, a domain name appraisal is likely not worth the expense. When selling a domain name, many buyers require that you provide them with one. Some even tell you what appraisal companies they will and won’t accept. If that’s the case, agree to get the appraisal, but kindly let the customer know that if they demand one, they’ll be responsible for the fee up-front, or you’ll add it to their bill when processing the sale. Other than that, if you want an honest opinion on one of your domain names, there are countless free forums on the Web where experienced professionals in buying and selling domains will give you their free input, based on what they’ve seen similar domains sell for recently. It might be a better use of your time to get various opinions that way, and decide for yourself what you feel your domain is worth. And if you considered getting a domain appraisal simply out of curiosity, remember this: your company’s domain name is as valuable as you feel it is. If you couldn’t run your company without it, it’s priceless.
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