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What Makes a Domain Name Valuable?

Regardless of your reasons for wanting to find out, estimating the value of a domain doesn’t have to be too difficult. However, it will require you to understand what makes a domain desirable in the first place.

Of course, it’s significant to note that as with most evaluations of this nature, this is not an exact science. A domain will always be worth what people are willing to pay for it, and the bottom line is that sometimes the theory may not line up with the practical reality. By calculating the estimated worth, however, you’re providing yourself with a handy baseline — so you don’t end up selling a valuable domain for pennies.

With that in mind, let’s look at some of the features generally considered important when it comes to domain names. These include:

  • The Top-Level Domain. A domain’s TLD can be a big part of what makes it desirable. For example, .com remains the most popular option (as it’s recognizable and common), so many buyers will gravitate towards it. However, newer alternatives can also become trendy (and valuable).
  • Popularity and traffic. If the domain name is currently used for a specific website, the level of traffic that site receives can become a vital factor in calculating the domain’s worth. The reason for this is pretty straightforward. If the domain comes with an existing audience attached, the buyer can leverage that traffic for their site right away. If the domain has been active for a while, this can also help its Search Engine Optimization (SEO) for the new owner, which may make it even more appealing.
  • Keywords. Including the right keywords in your domain name is another crucial aspect of SEO. According to a study by Higher Visibility, in most industries, a majority of sites include high-quality keywords in their domains. For example, the top-rated website for the search engine query “hotel” is www.hotels.com. As such, if your domain contains a desirable keyword, this could increase its value.
  • Brandability. While a domain’s brandability can be very difficult to define, it’s also an important consideration many site owners make when choosing a name. Many of the most visited websites in the world have clear, memorable, and unique domains, such as twitter.comyoutube.com, and facebook.com. If your domain is similarly catchy and attention-grabbing, it may make buyers take special notice.
  • Spelling. This may seem obvious, but making sure your domain is spelled correctly can be critical. After all, few buyers will be swayed to use something that looks sloppy and unprofessional. At the same time, using unexpected spelling can sometimes be a benefit, as it could make the domain more brandable. For example, fiverr.com and tumblr.com have taken technically incorrect spellings and used them to create memorable, lasting brands.
  • Length. A general rule of thumb is that the shorter a domain is, the more people will pay for it. This isn’t always the case – brevity alone isn’t going to make an otherwise cumbersome domain like zz0xy2c.org more appealing to potential buyers. However, a concise domain is often considered rarer and therefore more valuable. This is due to shorter domains being more memorable, easier to share, and more marketable.

You own a domain name you’re not using and someone asks if they can buy it from you. How can you figure out what it’s worth?
It’s not a simple as appraising a home; it’s very difficult to find comparable sales and attach a price to a domain. Every domain name is unique and it’s hard to compare one to another.

In fact, if you ask five so-called domain experts how much a domain is worth, you’ll probably get five different answers.

But you can get a decent idea of your domain’s value by taking a look at some of the factors that go into valuing a domain name.

How many other extensions are taken – if you own the .com of a domain and the .net and .org are also registered, that’s a good sign that the domain you’ve chosen is in demand. It means the term you chose for your domain (the second level domain) is popular enough that people are willing to register it in extensions that aren’t as popular as .com.

If similar domains are taken – In addition to if other extensions of the domain are taken, also see if similar domains are taken. For example, let’s say you own the domain PickleballHome.com. Pickleball, which is sort of a cross between tennis and ping pong, isn’t a very popular sport and there are lots of Pickleball-related domains are available to register. Instead of buying your domain, someone can register PickleballHouse.com, PickleballWeb.com or PickleballPages.com for their website. This makes your domain worth less.

Compare this to BaseballHome.com, which is for a much more popular sport. Most of the good alternatives to BaseballHome.com are already registered, which increases the domain value.

Domain age – Since most of the best domain names were registered a long time ago, the amount of time a domain has been registered can be an indication of value. This doesn’t mean that every domain registered in 1995 is more valuable than ones registered in 2010, but it can give you a general idea. You can see how old a domain name is by locating the “creation date” for the domain in WHOIS.

Search results volume for the term – It’s a good sign if there are lots of results for the search term matching your domain in Google. If you search for pickleball on Google, you’ll get about 500,000 results. Search for baseball and you’ll get over 400,000,000! Clearly, baseball is a more popular topic. The more people who have created web pages related to a topic, the more demand you can expect for your domain name.

Monthly searches for the domain – Pages indexed in Google are one thing. But the amount of searches per month for the term can be an even more important measure of demand. You can get an estimate of the number of searches for a keyword by typing it in at SEMRush.com.

Advertising competition – If a lot of companies are buying ads on Google for the term of your domain name, it’s probably worth more money. SEMRush also estimates the prices people are paying Google when someone clicks an ad for the search term.

Comparable sales – Although finding comparable sales (“comps”) is hard, there are a couple of sites to check. NameBio.com and DNPric.es offer a searchable catalog of past domain sales. Only a small percentage of domain sales prices are made public, but you’ll find over a billion dollars worth of sales on these sites. If you’re selling a two-word domain name with baseball in it, it’s helpful to know what similar domains have sold for: BaseballGear.com $7,600, BaseballCap.com $4,601, UltimateBaseball.com $3,500 and BaseballMag.com $1,025.

No one data point will tell you how much a domain name is worth. But considering these factors can help you determine a relative value for your domain.

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