I am in the process of evaluating a domain name I am thinking about buying, and I thought I would share some of the considerations I make as I go through the process to determine how much I am willing to pay to buy the domain name. I am sure I’ve shared a number of these points in the past, but I thought it would be good to write down the things I am considering as I go through this evaluation process.
If there are other things that you consider that I didn’t share below, I invite you to share them in the comment section. Your thoughts can help make this more robust and helpful to others. If I can think of anything else after publishing the article, I will add it because I am sure there are some things I look at when determining how much to pay for a domain name.
Evaluating a domain name to buy:
- Search volume – I use the Google Keyword Tool as well as a general search of Google to make sure people actually search for this keyword vs. other keywords.
- Advertisers on Google – When I search Google, I am also interested in seeing how many advertisers there are for the keyword. The more advertisers there are, the more prospective buyers there probably are. This does not include dictionary words or common phrases that could be used as brands.
- Number of companies that do this or offer this – I want to make sure there are enough companies offering the product or service that might want to buy the domain name. Fewer companies that offer the keyword product or service, the more challenging to sell. This does not include dictionary words or common phrases that could be used as brands.
- Past sales – I like to search NameBio and other resources (including Google) to see if this name sold previously and for how much. If I buy a name for resale, I don’t want a prospect to quote a substantially lower previous sale because that might make it difficult to sell for much more.
- Comparable sales and listings – I look up what other, similar names sold for, and I also look at marketplaces like Sedo and Afternic to see what similar names are listed at to see if the name I want to buy is a good deal.
- Sale listings or auction listings – I also use Google to search for the exact domain name to see if it was previously listed for sale or at auction and didn’t sell. Information like this may also be good for negotiating with the owner (ie “it didn’t meet a $10,000 reserve price at auction, so I am not going to pay $15,000 for it today.)
- Other extensions registered and by who– If other extensions are registered, it shows interest in the keyword or phrase, which might indicate added value. This also may indicate who would be interested in the domain name, especially if other TLDs are developed by companies in that business. This could also be a good indicator of potential TM issues.
- USPTO TESS – If I am not certain a term / phrase is completely descriptive, I will generally search TESS to see if there are US trademarks that could impact my ownership of the domain name. If I still have concerns but wish to buy the domain name, I will ask my general counsel and/or an IP attorney for an opinion.
- Evaluating the landing page – If there’s a for sale link or graphic, I need to figure out why others didn’t buy the name before. Development or partial development may have been a deterrent to inquiries, and that is a good thing if the domain name is ultimately being re-sold.
- Valuate / Estibot / Colleague valuation – I sometimes like to get a third party valuation to get an outside opinion on value.
- Gut Feel – This is probably the most difficult thing to express, but I come up with a value in my head and use that to evaluate whether a domain name is a good deal or not.