How much is a domain really worth?


Morning folks!!
How much is a domain really worth? That is the key question in our business and beyond. But first you have
to ask yourself some questions.

1. Is your valuation as an asset?

2. Is your valuation as an income producer?

3. Is your valuation as a collectible?

4. Is your valuation as a commodity?

5. Is your valuation for a NEED?

6. Is your valuation for a WANT.

7. Is your valuation for a project?

8. Is your valuation for an idea?

9. Is your valuation for its' uniqueness?

10. Is your valuation based on more than one of these or all of
these?

I can add more to that list and so can you. Like future value. Like value because a huge
company has a hit website and you have the singular version. The point is like a
diamond, there are so many ways to measure value in a domain name and the value can change. There is also
a value if you are forced to sell it right now today because if you don't make
your $3500 mortgage payment you are in foreclosure. So the biggest one in
valuation is and has always been Circumstance. So if you can
avoid circumstance, you can also avoid selling low. The minute you put a time
frame on selling a domain you are going to get less than it may be worth. I look
at each domain as a planted seed. If you harvest it before it is ready, you
don't get much reward. There is no fruit.

I have never really let a domain drop. If I bought it, it was to keep. The
only ones I let expire are the ones that are time sensitive. Not much of a
market for ClintonEdwards2008.com or such type 'Perishable' domains. So the
point is those getting hammered with registration fees may want to look at the
business differently. I run into guys all the time that have tens of thousands
of domains and are lucky if they break even. If I look at 10,000 domains that
don't have much meaning and don't earn reg fees I am looking at a business that
is wasting $80k a year. $800k over 10 years. That's a liability, not an
asset. Dumping the crap to buy just a handful of premium domains is the map to
their survival. I often say that my most important purchases were my early ones
because they gave me the fuel and luxury to take risks and experiment.

Some say you can't hand register domains anymore. I do all the time. The
domain market merged with advertising is not static. New opportunities
materialize constantly. I hate redundant domains. What is a redundant domain?
A domain that says the same thing twice and sounds stupid and has no meaning.
But they litter the highway there are so many out there.
FixedLockedMortgageRates.com. I'll have to add some more. Usually the first 2
words have the same meaning. Worthless in my book. Let's face it, it is easy to
buy a crappy domain. So in today's economy building income is more important
than ever. Buy domains with income. So damn easy compared to everything else.
Just look for someone with a circumstance that wants to cash out and you are an
instant winner. At least your investment is going to pay dividends while your
asset or collectible or whatever you want to call it goes up in value. Last time
I looked domains are still in great demand. If you open a business today the
domain name is no longer an afterthought. THAT is a HUGE sea change. We may not
see it. But believe me it happened. I will close with what I have said from day #1 and I have never wavered. 'Domains will go up in value faster than any other commodity ever known to man'. (But let me exclude worthless domains that will continue to be worthless.)

Have a GREAT Day!
Rick Schwartz




7 thoughts on “How much is a domain really worth?

  1. Asia SEO Guru

    Great to hear that both yourself and Latona still hand reg. I’ve read some comments on your blog that led me to believe you don’t do it at all….
    I know a lot of people hand reg crap names, but i believe if you search hard enough, you can still find needles in the hay stack

    Reply
  2. Francois

    Post added to my domaining.com favorites!

    I like so much this concept you named last year and that can lead a domain sale to happen for a price so far of it’s appraised value.
    I am speaking about”Circumstances”.

    Reply
  3. CreditScore

    Rick,
    Your wisdom is like drops of oil of olay for the soul. Whenever I am depressed because my belief in the value of mydomain falters somewhat, i read your book, and sun is shining again.
    Thank so much.

    Reply
  4. M. Menius

    Really good post, Accurate. The comment about”circumstance” is a powerful valuation factor that many domainers do not understand.
    Different sets of valuation critera are applied depending on the characteristics of the domain name in question. There is no one size fits all model of assigning value to domains.
    LOL -“Worthless domains that will continue to be worthless.” I learned in math class that zero x any integer = 0.0000!

    Reply
  5. Rob Sequin

    Rick,
    Great wrap up. You are right about circumstance.
    The more motivated the seller, the cheaper the price is for the domain. The more motivated the buyer, the higher the price.
    Also, like you said in the past, you make your money when you BUY your domains, not when you sell them.
    So, buy low or buy quality.
    Keep these”daily affirmations” coming :-)

    Reply
  6. Johnny R.

    Agree with 1st part! I don’t understand why people keep paying for valuations.
    Disagree with the crappy name part. What is crap for one can be gold for another. TDNAM.com says nothing about the company.
    TheDomainNameAfterMarket.com goes to the same place … GoDaddy. Most larger companies have registered a number of domains that redirect to their business. FixedLockedMortgageRates.com is a very extreme example of a multi-keyword domain, and I must admit that it does not make sense to me. But if the content or the redirect makes money – Why not?
    Typing in Google”scientific domain appraisals” without quotes brings up at least 3 of our domains in the top 10 SERP. In between quotes even better than … So, keywords do can count.
    We shouldn’t bother when buyers want to pay for something that we don’t understand why they want it: They know.
    All the best!

    Reply
  7. Successclick

    All successful domainers do OOTB registrations. (otherwise known as”hand registrations” which sounds kinda weird too – I see the Addams Family”Thing”, some disembodied hand typing alone on a keyboard trying to register”cemetaryparty.com” or something. lol
    OOTB = Out Of The Basket
    which means registering new domains.
    In January, I sold over $5000 in OOTB domains, mainly through Moniker and Snapnames. Simple money. Add another domai sale s from an enquiry from my Domainrelevance.com site, a $7 registration back in 2005 paid off $3,640. (See this week’s DNjournal sales).
    In a nutshell, smart strategic thinking and a good understanding of branding, watching the elite tech newsletters, will help you secure some excellent domains. You may have to wait till they mature, but what’s $8 a year for three years when someone will buyit for at least $100?
    good article tho, Rick

    Reply

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