How do I valuate domains and set an asking price

Hello and Assalamo Alaikum,

One of my reader Sumit asked me how do I valuate and set an asking price for domains when I don’t use any valuation tools like Estibot and others. I have also mentioned some factors which I don’t actually consider while assessing domains.

It’s an interesting question and many find it difficulty in setting up prices for their domains. Although I am not an expert or the domainer who mostly sell his domain in 5 and even 6 figures on regular basis. But if someone wants to know more as to how I operate my domain business, please continue reading.

When I was in initial stage of my domaining career, I did flipping and sold domains at sacrificing prices just in order to keep the cash flow going and must not stop buying and selling domains. But as I am quite settled now ALHUMDULLILAH, I can wait for the right buyer and play waiting game.

There are several factors in valuing my domains:

1) No urgent need of money. When you have good cash flow your sense of judgement gets change and you act accordingly. However, I have tried to get maximum out of every domain sale I can no matter what my financial position was. I admit of selling domains at lower price than I thought of their actual value but it was done purposely for the need of cash flow. Now when there is no urgency of funds, I feel I am on top of enduser and can demand what I actually want for every domain.

2) There are hundreds of domain I hold which are upgrades for companies. When you target 1 specific buyer, you limit yourself selling the domain and requires lot of patience and wait for that buyer to knock your door first. But I tell you… the reward is really fruitful and sometimes life changer. But in such cases, Neither I buy domains with having only one potential buyer on internet, nor I target one specific buyer when selling a domain.  But still wanted to share since many other domainers work in this way.

3) When targeting of one specific buyer, that company will definitely be having good backing of funds. If a company has got series of funding in millions of dollars, why cannot they spend a peanut of share on buying/upgrading their domain to a better one. The more time that buyer will delay, the more he has to pay because I have to consider many factors in increasing the price as the time goes by. My investment which is stuck for long time, aftermarket from where I buy domains is as always going up so my price will be adjusted accordingly. Once again I would like to say that neither I buy domains with having only one potential buyer on internet, nor I target one specific buyer when selling a domain.

4) That particular market is huge and has lot of potential. I don’t need of going into much detail about this because we as domainers know which niche has what kind of potential. But this is one of the factor I take into consideration for valuing my domains.

5) I don’t give much importance to exact searches and CPC of Google Keyword Planner. For most of domain acquisitions, I don’t even check these metrics. Also the length of domain doesn’t matter unless it has meaning, demand and potential. The more shorter, the better. Doesn’t mean longer in length domains are not valuable but surely less desirable than shorter names like 2L, 3L.com domains.

6) Number of existing companies. I take this metric into consideration when buying and pricing my domains. I normally check when that domain is possibility of an upgrade. I use NameDroppers and ZfBot for this purpose. When selling any 4L .com, I don’t see much benefit of checking existing companies through ND or ZfBot but Google is more helpful in such type of domains.

7) Registered in other extensions. Let’s take an example of one of my domain (BeeGreen.com). I prefer checking/considering NameDroppers or ZfBot and Google and rest of the factors I have mentioned in the entire post but just looking if BeeGreen is registered in other extensions doesn’t bother me at all. Yes, there is possibility of .net owner to buy the .com version but never sticking solely to this option of checking if BeeGreen is registered in lower extensions and decide how much to ask while selling the domain. The result will always be poor and I will leave plenty of money on table.

8) Language. Most of the domains in my portfolio consists of English words excluding 4L.com and brandable domains. I do have domains in many different languages but I try to buy good meaningful and very common words used in that language or has decent as well as common meaning in English language. I used decent because I don’t buy domains which has relationship with alcohol/adult/gambling. It’s difficult to sell less popular language spoken domain even in .com as compare to selling some German, Spanish, Italian words in .com. You have to see the domain you own is in which language and how much popular and common that word is in that language. Sometimes people prefer to have .de (German country code) domain than to have .com. Doesn’t mean you should not buy German language domains in .com but research is must. But if you seek my suggestion, I would strongly say to stick with English words in .com and diversify your portfolio once you have gathered good quality along with decent number of domains.

9) Comparable sales. Oh well… This is seriously useless for me for setting up an asking price for my domains. I do keep checking DnJournal weekly sales report and NameBio but that doesn’t mean I set asking prices after going through any comparable sales. Checking those sites keep me updated and helps me while buying domains so that I must not overpay it. But when I valuate my domains, I never check comparable sales because every domain is different. Demand of buyer is different, situation of seller is different and many other factors are involved.

10) The most important factor in my opinion is that buyer have to have the biggest idea for using the domain they are going to acquire from me. You will hear often from domainers who say that your domain is worth what the buyer is willing to pay. In my opinion, that just doesn’t make sense and that person might have no idea about this business. I always valuate and decide the asking price to whatever I want and sell at my own price. If the buyer doesn’t want at that price, he must not have the big idea for my domain. I simply pass which is difficult but that’s the way you should deal if you are to make fortune and change your life for betterment.

I would love to see what others think about my way and curious to know how you guys valuate and price your domains ?

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Adam
Guest

Thanks for posting this article about your valuation process Abdul. Some really useful and insight information and things to consider.

For #1 cash flow is usually the biggest problem. Too many domains! 🙂

Eric Lyon
Guest

Good starting point. It may also be beneficial to look at the following areas of a domain (if applicable) since they could also create value:

1. Pronounceable:
2. Domain Length:
3. Premium Letters:
4. Developed:
5. Indexed:
6. Original Content:
7. Previously Developed:
8. Development Possibilities:
9. Revenue:
10. Target Market(s):
11. Keyword Value (cpc):
12. Keyword Competition:
13. Competing Sites:
14. Alexa Score:
15. Dictionary Word:
16. Language Match Extension:
17. Backlinks:
18. Similar Domain Sales:
19. Trademarked:
20. Trend:
21. Age:
22. Similar Extensions Taken:
23. Brandable:
24. Traffic and Sources:

Michael Castello
Guest

#1 indicator of value is Direct Navigation. Everything else is dynamic and relative to a multitude of personal reasoning.

Noor Manji
Guest

Love the simplicity and the common sense approach, wish you wrote more often though. Any new acquisitions that you can share???

Best,

Noor Manji

Kassey Lee
Guest

Very good advice. Thanks.

“Most of the domains in my portfolio consists of English words”

Very much agreed. Everyday when I read news on startups I pay attention to their domain names. I’ve noticed the trend toward use of English or English-like names on .com all over the world. Even French startups use English words on .com too. My conclusion is that English word on .com will become the best choice in the world.

Niz
Guest
Niz

Thanks for sharing your evaluation process bro.

There are Some really useful information and insights..
As you’ve pointed out.. Patience is a virtue indeed Especially in domaining..

Best Wishes..

Tauseef
Guest

Nice post AbdulBasit. Thanks for sharing.
I think domaining industry doesn’t have much data to highlight comparable sales effectively. At NameBio or DNJournal except few enduser sales mostly are investor oriented purchases. And, it can trick you in setting a low price for your name. Just “my 2¢”

Sumit
Guest
Sumit

Thanks Abdul for writing the post to answer my query. This article has some really valuable thoughts, and as most would agree, patience is foremost for selling a domain at the right price.

Vijay Narada Kumar Pilla
Guest

Hi Abdul, You have given valuable points to the new domain investors. I will keep this points in
mu mind… Thanks..

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[…] How to Valuate Domains and Set an Asking Price […]

Fahim Hassan
Guest

Assalamu Alaikum WR

You are really an inspiration for me.

Can I know How nd from where you usually buy domains. Is there any blogpost of your available on it

Fahim Hassan
Ample Online Media
Bangladesh

PKDomainer
Guest

Thanks For Sharing This Article..
Very good advice for beginner…
KEEP IT UP ♥ 🙂

Sulabh Sharma
Guest

Thank you for posting this article. Everyone has their own views and opinion about valuating the domain names. I don’t have any idea about valuating the brandable domain names but looking at this article gave me a bit of sense in valuating it.
In my opinion, domain values depends upon usability and its market. I do consider looking at its market. I am not a good domain investor. But this is what I have learned so far.

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Ivan
Guest

At NameDroppers you use the PRO version or the free one?

Your blog it’s great, and your sales too 🙂
Good luck!