Value of a Domain Appraisal

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On Labor Day, I wrote a blog post offering a free domain appraisal for anyone that was interested in getting one. As you might imagine from the number of replies, I was overwhelmed fairly quickly.  Of course, my apologies to those who didn’t get a response due to time contraints.

Although I don’t believe domain appraisals are completely worthless, I don’t think they hold much value, other than being more of a guideline. I am a domain investor and I certainly don’t value domain names at the same levels end users might, unless I am going to be the end user. As the saying goes, a domain name is worth what someone will pay for it.

I don’t have experience or expertise in such a wide variety of businesses that I could give accurate insight to niche domain names. The same can likely be said about the companies that sell domain appraisals. They may be able to give an analysis of market conditions and how similar names sold, but with domain names being a unique entity, even comps aren’t all that accurate.

Some people are willing to spend more money on a domain name because a particular name gives them more authority. Others will spend more because they know the domain name will drive more business to them. There are many reasons why people pay more or less for a domain name, and every situation and domain name is different, making it impossible to give a precise valuation.

After I posted my offer, a couple business colleagues told me I shouldn’t have done it because it would be a no win situation. People tend to think their domain names are worth more than they will ever receive for them (count me in that same boat). Realistically though, a domain name is hard to put a value on, unless you are buying it for a reason and can put a value on what the domain name will bring to your business.

8 COMMENTS

  1. I disagree w/your colleagues. Any experienced domainer will know that before pricing a domain, you must obtain data from many sources. For example, you don’t just go to Estibot and take what they say at face value. It really comes down to a lot of factors. The more research you do, the better prepared you are to explain why you are asking what you are asking.

  2. @ Spike

    They felt that there were a lot of bad names that were mentioned, and nobody likes to be told their names aren’t worth anything. That said, it would win me no “popularity points” by telling people their names have no value.

  3. Your colleagues are wrong. A blog is about content and that was a great post because you got a lot of comments and those comments kept bringing people back to the site.

    Regarding people being upset because their domain names have no value, I tell my kids that life is not fair and the sooner they realize it, the better off they will be.

  4. When a post generates THAT many comments, good or bad, you have done a good service. It is stimulating conversations and comments. I hope you continue offereing domain valuations every so often. Not only do I learn about the value of one of my domains, but I also learn from seeing others. Perhaps you might create a post soliciting domains to value and, after a day or so, pick five or six that represent a broad spectrum of values (e.g., not very valuable to extremely valuable). For each, you could provide a little color commentary as to why you valued it the way you did. Yes, the person with the least valuable domain might be a bit offended, but they would definitely learn something…as we all do!

  5. Great Post Elliot. Like anything else, we all look and value items with different points and “feelings and guts” are a large part it when it comes to domain names. What is worth $50.00 to someone could very well be flipped for more and of course, the reverse can be true also. Market conditions are a state of mind and always have been when it comes to domain names.
    Regards
    Scott.

  6. @Elliot

    “They felt that there were a lot of bad names that were mentioned, and nobody likes to be told their names aren’t worth anything. That said, it would win me no “popularity points” by telling people their names have no value.”

    You may not be gaining any “popuilarity points” but you are doing these individuals a great service by letting them know that their names were bad. This way they can correct their course and learn how to pick better names.

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