How Much is My Domain Worth? Calculating Domain Value
Although many people have tried to come up with one, there is unfortunately no magic formula to calculate the value of a domain name. There are many factors that go into determining what a domain is worth. And there are no concrete answers. Ultimately, a domain name is worth what someone is willing to buy it for.
This can be a positive thing. If you have an information edge in a certain industry, you might see domains that the marketplace undervalues. This can be your edge as an investor.
A handful of factors help estimate what a name is worth. Some are related to the market, some are related to the industry that the domain name pertains to (or lack-there-of), some are related to the keywords and TLD, and some are related to what has been built on the domain already.
Below is our list of ten factors that go into calculating how much a domain is worth. Below, we will elaborate on each price factor.
- Sales History and Comparable Sales
- Popularity of keyword(s)
- Top-Level Domain (TLD)
- SEO Factors
- Direct & Indirect Search Volume
- Buyer Intent and Industry
- The Domain’s Age
- Length of Domain Name
- Singular/Plural Keywords
- Type of Domain
- Legal Considerations
Sales History and Comparable Sales
One of the best factors in determining the worth of a domain name is to look at what the same domain has sold for in the past. If the name has not recorded a public sale in the past, you can look at comparable sales. Both of these can be researched with the free domain data tool Name Bio.
When looking at comparable sales, you should consider all angles. We would suggest looking at the three below.
Exact Keyword Matches. If your name is king.com, you should search for “king” in Name Bio and see what the .NET, .ORG, .INFO etc sold for in the past. Also be sure to look at the dates they sold. The market was a lot different in 2000 than it is now. A good rule of thumb is that the .COM version of a name is usually at least ten times more valuable than other TLDs. There are always exceptions to the rule but it’s a decent rule to start with. Some TLDs are more valuable than others. One thing that hasn’t changed is that .COM is by far the most valuable extension.
One thing worth mentioning about comparable domain sales is that unlike real estate, not all domain sales are recorded and publicly available. In fact, a vast majority of sales are private. The best tool to see publicly recorded sales is Name Bio.Also another great source of information are third party reports like the one that Escrow.com puts out.
Contains Keyword Matches. Now you have potentially jotted down some past sales that match your keyword exactly. The next thing to look at is sales that include your keyword. Note the position of the target word (at the beginning, middle, or end of the domain name).
Comparable Keyword Matches. Once you have done exact and contains, you should look at comparable keywords.
Popularity of Keyword(s)
The next factor to look at is the popularity of your keywords. You can approach this from a few different metrics.
# of Registered Domains. If you are looking at dogtoys.com, you might first want to see how many other registered domains contain “dogtoys”. This will be directly correlated with how many people see interest in this keyword as well as how many will potentially want to upgrade their inferior domain name. DotDB is a great paid tool that can help you look at registrations easily.
Google Trends. It’s important to look at keyword popularity trends. Google Trends is the best tool to do this. This will help you determine if a keyword is in the height of its popularity and/or if there is a seasonality component to the name.
# Google Results. Another quick way to gauge popularity is to search for a term in Google and see how many results come back.
Top Level Domain (TLD)
The TLD has a very large impact on the domain name valuation. As discussed earlier, the .COM is king, that doesn’t appear to be changing anytime soon.
But other extensions can be valuable as well. See our list of popular domain extensions with sales information.
One of the absolute most valuable factors any domain can have is SEO-ability. This is also the factor that most domain name investors really don’t have a grasp on.
When we say SEO factors, what we mean is the domain’s ability to rank in the search engines, usually (but not always) due to a website built on the domain in the past. A domain with a strong backlink profile (and subsequently strong SEO proxy metrics like domain authority, trust flow etc) can be extremely valuable to a marketing professional.
An even more less-understood phenomenon is negative SEO. This can also be very real when investing in domains. Negative SEO can decrease the value of a domain name substantially. This can be from a malicious attack, malware injection, spammy links, or even a manual de-indexation from Google for violating terms.
Direct search volume. Direct search volume is easy to measure and can be a good proxy to how valuable a domain is. Search volume won’t help for all names. It helps the most with keyword specific names. Search volume is important because it’s an indication of potential traffic a website could generate.
Direct search volume would be how much search volume the exact keyword would generate. If your domain is coloringbooks.com, you would look up what the search volume for “coloring books” is in Google keyword planner or a related tool.
Indirect search volume. A more advanced way to think about domain valuation is indirect search volume. Instead of using the exact keyword, you would think about all related keywords that the owner could potentially rank for. You can make a list with a tool like LSI Graph.
Buyer Intent and Industry
Search volume really doesn’t tell you much unless combined with buyer intent. You need to consider who is buying this name and what kind of website they will want to build on it.
Monetization. Think about who the end buyer of the domain is. If your domain is a brandable, singular name like Gazelle.com, you probably can’t think of an end buyer. This is a good thing – a name like that could apply to a variety of products or industries.
Maybe your domain is perfect for a lead generation or affiliate company. Those can be lucrative in the right hands. The thing to look out for is a name with no real commercial intent, even if the search volume is high. Best case scenario for a name like that would be monetizing via ads.
Industry. Keep industry in mind as well. A name suited for the financial industry would be way more valuable than a name suited for a local restaurant.
Buyer Intent. Lastly, be sure to think about buyer intent. One quick way to estimate this is by seeing what the average cost-per-click is on your keyword in Google ads.
Age of Domain Name
This one is pretty simple. How old is the domain name? Older names tend to be more valuable because more popular words got registered first. But that’s not always the case. Budding industries like cryptocurrency, online gambling, and marijuana have flipped the script and caused related names to become more valuable.
Another factor to consider is how many owners the domain name has had over the years. While it might not directly impact the price the domain is worth, it might impact how much you can buy it for.
Length of Domain Name
The length of your domain name can certainly impact pricing. Domains that are 2, 3, and 4 letters long and .COM can have far more liquidity than other names. Nobody wants a super long name. In general, you should usually try to buy one and two word names, with some limited exceptions.
You’ll want to consider some common rules about keywords. Typically, the singular version of a keyword is more valuable than the plural. Zebra.com sounds like a great brand name, but what about zebras.com? A marketplace for zebras?
Also, you will want names with no misspellings. A ‘z’ instead of an ‘s’ at the end might seem like a good idea, but that domain would be essentially worthless.
Finally, you’ll want to consider the language of the keywords. If you delve into the world of non-English domain names, you can definitely find an edge there. But be sure to study the culture – what TLDs do they typically use? What makes a good domain in that country?
Type of Domain
Different investors like to invest in different types of domain names. Each type carries its own risk profile. We won’t go into detail on this post about all the different types but they include numerical domain names, keyword domains, geo, domain hacks, brandables, and more.
Finally, you will want to consider legal issues regarding the name in question. The most common issue is related to a trademark or wordmark that might be filed on a name. The best way to check this is to run the keywords through Trademark 24/7, a tool that searches the patent and trademark database. Register a name in bad faith, and you might violate the Anticybersquatting Consumer Protection Act.
Another potential consideration would be buying a domain name that was previously in a lawsuit or seized by the US Government. The best way to avoid this is to Google the name with a site search (site:domain.com in the search bar). Do your research before buying an expensive name.
How to Appraise a Domain Name
We will highlight three different approaches to appraising your domain name.
- You could appraise the name yourself. Unfortunately, there is no easy path here. This comes from putting in hard work, studying the market, and trial and error to some extent.
- You could use professional services. Many brokers and registrars provide some type of domain valuation service.
- You can use free tools to get an estimate. These tools are typically not accurate but they can help you start defining a range. They can also occasionally be good information to present to a buyer.
Appraising a Domain Name Yourself
Certainly one of the most valuable skills a domain investor can possess is the ability to determine the value of a domain name.
Domain names are a unique asset to appraise. Stocks have a liquid value, cars have a Kelly Blue Book value, and even houses usually have similar comps in the same neighborhood. Domains are one-of-a-kind. In this way, they are similar to fine art.
There is no equation that brings in all the factors above and spits out a value, but we put together a process to help you improve at appraising domains.
Step 1: Understand wholesale and retail
Most serious domain investors don’t speculate that a domain is worth one fixed price and then walk away. They understand that a domain has different value bands for different end users.
Instead of thinking in terms of one fixed price, think in terms of two ranges: a wholesale range and a retail range. This means instead of one price point, you are actually figuring out four.
Wholesale means what another domain investor will pay for your name. The low end of the retail spectrum is the closest thing to a true liquid price. The high end is the best sale you could make in a domain auction. To find wholesale numbers, find out how similar names have sold on auction marketplaces like Godaddy Auctions, NameJet, and Flippa.
Retail means what an end user (non domain investor) will pay for the domain name. You will want a range here as well. What is the low end that a retail investor will pay and what is the absolute best price you could get if all the stars aligned? To study these prices, look at what has sold through Buy it Now and Make an Offer style platforms like Godaddy inventory, Afternic, Sedo, and Uniregistry.
The trade-off between wholesale and retail is time. Usually, the longer you hold a domain name, the more value you can get from a sale. But this is only true if the name is truly valuable and if you make it available publicly for sale.
Step 2: Use legal considerations and previous website history as filters.
On the legal side, it’s a good idea to generally stay away from domains subject to UDRP claims.
If the domain has previous website history, high Trust Flow or Citation Flow, high Domain Authority, or an active backlink profile proceed with caution. You are now in a new market against not only domain investors but SEO specialists and online marketers. This will drive the price of the domain name up and if you don’t understand the mechanisms, you can get burned.
Step 3: Classify the domain’s type and characteristics
First choose the type. Is it a numeric name? One-word .com? This should be easy.
Next, list the domain characteristics. What is the TLD? How old is the domain and what is the length of its characters?
Finally, consider the keyword characteristics. Singular or plural? What is the search volume? How is it trending? What is the intended industry and who would the end buyer be?
These characteristics can’t be boxed into a framework to determine a value, but they can help shift the scales either way. If you look at comps and you see one domain but you have something very similar but 10x the search volume, yours will potentially be worth more.
Step 4: Look at past sales data and comparable sales
Now you have a pretty solid profile of the domain. Now is the time to look and see if it has sold in the past. If you find that it has, check to see how the domain type has appreciated or depreciated. If you have a .COM that sold in the past and one-word .COM sales have increased in value over time, then most likely your value has appreciated.
Finally, look at comparable sales and start working out your ranges. Be sure to look at the venue at which the domain sold to determine if it is a wholesale comparable sale or a retail comparable sale.
Now you should have a whole range and a retail range for your domain. How you invest is based on your confidence and risk tolerance.
Domain Appraisal Services
As you can see now, appraising domain name values is not a cut-and-paste operation. There is no great formula. It’s based on years of experience and work. If you want to become a serious domain investor, it might be the single most valuable skill you can obtain and we highly recommend that you learn how to do it yourself.
But for the casual investor or end user, using the services of a domain name professional might be easier. Many brokers will offer these services but we’ve listed four that we recommend below. See the best places to sell your domain name.
We are the new kids on the block in terms of publicly offering services, but we have been investing for over 10 years. If the above process made sense to you, it might make sense to have us professional appraise your domain.
We charge $299 for one domain and $200 each for 5 or more. We can accommodate corporate or portfolio appraisals as well. To utilize our domain appraisal services, email firstname.lastname@example.org.
We will offer a complementary appraisal if you are utilizing our brokerage services.
Finally, domain broker Media Options offers an appraisal service for $250. They are a top broker in the domain industry and are experts in domain name appraisals as well.
Free Domain Appraisal Tools
Many domain name appraisal tools, valuators, calculators, and estimators exist on the internet today. Some of these are more reputable than others – we will walk you through some of the most popular options.
Don’t use these as truth. We get daily emails from people using a Godaddy or Estibot valuation as the basis of how they price their domain. When used properly, these can be good tools to help out, but tools today aren’t smart enough to give accurate appraisals.
An extra warning on domain appraisal certificates: many tools will offer a free domain name appraisal and then allow you to buy an appraisal certificate for an up-charge. Never do this, most legitimate buyers will not regard this as a good data point when considering price.
We would recommend Godaddy and Estibot as valid data points when making a domain value decision. These do not represent final pricing but they can be taken into consideration. The other options may differ in accuracy, please use at your own risk.
The reason Godaddy Appraisals is a tool to consider is because Godaddy has so much data on past domain sales to use. Godaddy doesn’t disclose what data goes into its appraisal algorithm, but they could use things like past sales, offers, views, searches etc. They have some of the richest data in the domain industry as the largest US registrar.
We would recommend getting a free Godaddy appraisal when deciding how much your domain is worth. Hopefully they will continue to develop their pricing algorithm with the rich data at their fingertips.
We like Estibot because it is free and will spit back a handful of data to consider when appraising your name. It will give you an estimated price based on its algorithm. Then it will spit back comparable sales, search volume, cost-per-click and more.
Note that Estibot will give you a different appraisal than Godaddy because they are based on different data. Many other tools are built on APIs driven by Godaddy or Estibot so you might see similar data.
We think Estibot is worth visiting to start gathering research for your valuation.
Siteprice.org is similar to Free Valuator. We just tested a few one word .COMs that recently sold in auction and received some wildly low valuations. This tells us that they are not using comparable sales in their equation. The site is obviously monetized aggressively through display advertising, to the point where it hurts the user experience.
One good thing we will say is that it pulls in things like backlinks and some basic SEO information. It could be a decent place to aggregate this data if you don’t have an SEO tool like AHREFS.
Domain Index is another popular tool. Similarly to the last two, the values just seemed to be off suggesting that comparable sales don’t play a large part in its algorithm.
One thing to definitely keep an eye out for when using this service is the trademark history. In theory, that would be a great feature. But we noticed a few domains where it noted a 100% risk of trademark violations and then only showed expired trademarks. We would recommended avoiding this tool for the basis of any valuation.