When people find out I am in the domain name business, many are intrigued. It often leads to a long conversation about domain names and what domain names are worth. Occasionally, people will ask me about a particular domain name they want or need. “How much will that domain name cost” is a question I am asked regularly.
Unfortunately, there are many nuances that make this question very difficult to answer with any accuracy. The price of a domain name can vary depending on several factors, including the keyword, acquisition price, and comparable sales.
The biggest factor in terms of pricing – and probably the most frustrating one – is the owner of the domain name.
There are some companies whose domain names are priced fairly consistently. When I see a name owned by BuyDomains (for example), the price is likely reasonable and they will work with me on reaching a fair deal more often than not. When a domain name is owned by a private individual or a domain investor, the price can be anywhere from reasonable to totally batshit crazy unreasonable. I am sure prospective buyers may feel that my prices are high, but I try to be reasonable and am always willing to justify my prices with comparable sales if requested.
As a domain investor, it is great that a domain name can be acquired for a few hundred dollars and resold for many thousands of dollars. This makes domain name investing a lucrative business. As someone seeking to buy a domain name, it can be frustrating that there is relatively little consistency in domain name pricing and domain name valuation. When a friend asks me about how much a domain name will cost, I feel badly because it can be difficult to answer.