Domain Value: 5 Ways to Appraise a Domain

shutterstock_128810011While it might only cost $10 to register a new domain, some of the most expensive domains in the world are worth upwards of $25 million. From keywords to catchy names, domains can be worth significantly more than their registration price.

In this guide, you’ll learn five techniques that you can use to judge domain value and assign a realistic sales price to your domains. Whether you’re a domain investor or a digital entrepreneur, use these tactics to get the most from your next domain.

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Use the phone pronunciation test

Here’s a simple test that you can use to calculate your domain’s value. Call a friend on the phone and ask them to visit your website. Pronounce the domain name and wait for them to ask the inevitable: “How do you spell that?”

Most of the time, domains that are easy to spell without specific instructions attract the highest sales prices. Think of the websites you use most frequently – Facebook, Twitter, and YouTube – for an example of how important a domain’s simplicity is.

The phone pronunciation test is most useful for domains that haven’t been used for businesses yet. Google, for example, is difficult to spell intuitively but attracts huge traffic because it’s so well known it’s entered the popular lexicon.

Whenever you register a domain for investment purposes, try and avoid anything with spelling that isn’t immediately obvious when it’s pronounced out loud. Avoid numerical characters, hyphens, and anything else that makes spelling difficult.

Do you need help picking a good domain name? Whether you’re buying a domain for a business or for investment, apply the strategies in our Domain Riches With a Twist course to only buy memorable, valuable domain names.

 

Work out your domain’s SEO value

People buy domains for a variety of reasons. Some people buy domains because of their memorability or suitability for a particular business. Others may buy domains to position their business as an industry leader or local authority.

A growing number of people are buying domains not because of their suitability for a particular business or authority status, but because they were previously used by websites that attracted hundreds of inbound links and a high PageRank.

PageRank, for those new to SEO, is the metric Google uses to determine the value of a website. A high PageRank and plenty of inbound links means a website is likely to rank well in Google for search keywords related to its content.

Domains that were previously used for authority websites can be worth hundreds, or even thousands of dollars to SEOs. Check your domain using a tool like Majestic SEO or Moz to see if its backlink profile enhances its value.

Do metrics like PageRank, Domain Authority and keyword density confuse you? Join our SEO Course for Beginners to learn the fundamentals of SEO and discover how a domain’s PageRank and backlink profile determines its value.

 

Use traffic as an indicator of value

Certain domains attract type-in traffic, even if they have no content and aren’t listed in Google’s search index. This is usually the case with generic domains (like Pets.com or Loans.com) or domains that are similar to popular websites.

The first category of domain can be quite valuable, particularly if the visitors typing in the URL are interested in a particular product or service. Domains like Toys.com, for example, have sold for more than $5 million based on their type-in traffic alone.

If your domain is attracting hundreds of visitors per day due looking for a certain product or service, you should consider teaming up with a domain broker to find people that would be interested in buying it.

The second category of domain is known as a typo domain. This is a domain that’s very similar to an existing website, often intentionally. Facebok.com and Googl.com are examples of typo domains that likely attract thousands of visitors every day.

Generally speaking, typo domains are worth very little unless they were registered before the website they’re similar to. In fact, typo domains are often worth nothing as they’re highly vulnerable to intellectual property infringement lawsuits.

 

Check for local marketing potential

Is your domain name related to a particular town, city or geographical area? Local domain names like LosAngelesDentist.com or HoustonGardening.net can be worth a huge amount due to their memorability and local search engine optimization value.

Since many generic local domains have yet to be registered, there’s a massive level of commercial potential in registering local domain names to resell to businesses, SEO agencies and marketers.

While it’s difficult to calculate the domain value of a local domain, factors like the length of the domain, the size of the town or city it’s related to, and the cost of the product or service included in the domain name typically determine its value.

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Use your domain’s registration date

Most of the time, domains that have been registered for several years are worth more than brand new domains. This is because Google uses domain age to judge search engine optimization value, prioritizing old websites over new ones.

This is especially true if your domain has been indexed by Google for a year or longer. Domains with a lengthy search engine history typically rank highly with minimal additional on-site SEO and link building.

While this metric doesn’t hold true for domains that aren’t being sold for their SEO value, most marketers will use domain age as an indicator of value when buying a domain for SEO.

Do you want to learn more tactics for calculating a domain’s value? Learn the best ways to value domains before you buy them and price your domain for sale in our course, Strategies to Make Money Selling Domains.

 

Ready to start investing in domains?

With the right combination of registration age, a memorable name and a great SEO backlink profile, your domain could be worth anywhere from $50 to more than one million dollars.

Learn more about the factors that make a domain name memorable in our blog post on selecting the right name for your blog or website. From looking beyond the usual TLDs to using the phone test, it’s packed with excellent advice for domain investors.