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A great domain name is the difference between being well branded right from the start, or having to invest the time, effort and marketing into something that may potentially become a household name in years to come.
While this might be right in most cases, there are some exceptions here and there, such as eBay.com, PayPal.com, Google.com — all names that are short and sweet, but not exactly “real words” that anyone would know or think of if the current names and sites weren’t already attached to them.
However, having a great one-word generic domain is potentially worth millions, especially if it’s relevant to a multi-million dollar brand that wants it enough.
No matter the business, brand or name… one thing that is common in the world of online marketing, is that everyone thinks their domain name is worth a heck of a lot more than it actually is.
Registering a cheap domain name for $10 and expecting to flip it for a quick 10-50 times profit is extremely unlikely, but I still get emails everyday from random people who bought domain names similar to some of my other sites and expect me to buy them — which is just silly, and a horrible business model on their part!
For anyone that wants to learn more about legitimately and successfully buying and selling six-figure domain names, I highly recommend you check out my interviews with Adam Dicker and Dave Evanson — two of the brightest people in the world of domain name sales.
With all of that being said, I wanted to provide some insight on what makes some domain names worth more than others. Obviously one-word generic domain names are the best, especially when they are “.com” extensions, but there are also many other key elements as well — all of which we will be cover in this article and through the infographic below.
All of the data and factors listed below are based off the “The Art of Valuing Domain Names” infographic found below, which was originally created by Aftermarket.com, but has since been changed over to Igloo.com.
The Art of Valuing Domain Names
As mentioned, when it comes to putting an actual price on what a domain name is worth, it comes down to many different factors — but ultimately it’s decided by what a person or brand is willing to pay for it.
Let’s first take a look at some of the key elements that INCREASES the value of a domain name.
- Domain names that are unique and brandable
- Shorter domain names are usually valued higher
- “Everyday words” are more sought after
- There is a lot of value in “exact match” domains
- Higher search volume on a domain also increases value
- The TLD of a domain is a huge factor in worth
- The “lead value” for the domain name niche is another indicator
- Previous sale prices of the domain can also come into play
- Age, existing traffic and SEO are also measured
Now let’s look at some key factors that DIMINISHES the value of a domain name.
- Domain names that infringe on trademarks usually won’t sell for much
- Having too many words/characters in a domain is also a negative
- Singular versus plural words can devalue a domain name
- The use of dashes and numbers is frowned upon
- Errors and uncommon words aren’t very sought after
- TLDs outside the top three are immediately devalued in comparison
- A negative domain history can also devalue a domains worth
- Negative SEO, content and backlinks can keep buyers away
Generic Domains that Have Sold for Millions
To get an idea of what type of domains names demand high value, I’ve listed a few of the top selling seven-figure domain names over previous years. Not many domains sell for millions, but plenty do sell for six-figures. Take a look at my infographic on the Highest Selling Domain Names of 2015 to see what’s been selling lately.
- Sex – $14 million
- Fund.com – $9.99 million
- Porn.com – $9.5 million
- Business.com – $7.5 million
- Diamond.com – $7.5 million
- Beer.com – $7 million
- Slots.com – $5.5 million
- Toys.com – $5.1 million
- Clothes.com – $4.9 million
- Candy.com – $3 million
- Vodka.com – $3 million
As you can see, pretty much all of these domains are super generic and would be of value to any brand or business selling products or services related to the domain name.
The amazing thing is that each of these domain names were purchased for under $100 at the time of their initial purchase (and probably back in the mid 90s)!
How to Determine the Value of Your Domain Name
Using the factors mentioned above, you should have a better idea of what your domain name is worth. If it’s a generic one or two word domain name, that is a .com and doesn’t have any hidden negatives (seo/search), then you probably have a nice 5-6 figure domain name on your hands.
The important thing to remember is that the price of a domain name is not random. Just like everything else in the world, prices can fluctuate and the value of a domain name is based upon what someone is willing to pay for it. Obviously, if you had a domain name for someone’s personal name, it would be of great value to only people that share that name — yet worthless to nearly everyone else.
The one thing that does stay the same is the variables listed above — which have been used by domain brokers and investors for the past 20 years!