It is a well-known fact that not all domains are valued equally. While some domains are only worth their registration cost, others can sell for six and even seven figures. Domains are similar to ‘undeveloped real-estate land’ and to the right developer the potential can be enormous.
There are many factors which can affect the value of a domain name which includes:
Spelling & Other Options
If the words in the domain are easy to misspell then this can lower it’s value, this also includes the use of numbers within a word, or hard to spell words which can also lower it’s value. It may be worth looking into whether the typo options are available and potentially buying those as well to redirect to your main domain.
Length & Word Count
The amount of characters in the domain name plays a big role in the value and names with a shorter length or smaller number of words usually sell for more. Exact-match domains are usually valued more than short brandable domains because of their SEO benefit.
Historic sales of domains which share very similar characteristics to the domain in question are some of the most important elements when determining its value.
You can browse through historic sales records at: DNSalePrice, NameBio, and DnJournal
The previous history of a domain name can affect it’s value a lot and factors such as domain age, registration history, content, backlinks and any previous violations can affect the price. If a domain is clean and has been registered for a few years then it might be worth more because Google values older domains, whereas if it has been penalized by Google previously this can negatively affect it’s price.
Memorable and Pronounceable
These two factors are pretty self-explanatory.
Generic Vs Keyword Rich/Exact-Match
Generic names are usually short, meaningless and forgettable and generally people search for them less. Keyword rich domains may have an industry related search term or phrase embed in them and these have the advantage of having higher organic SEO. Sometimes it’s worth having the best of both worlds and owning a domain with a generic keyword and another which is industry specific and redirecting both to your site to utilize the full traffic potential.
.Com extensions are the most popular and desirable of all domains because most places default to this and it is the most commonly used. Some people also feel that .com shows more authority than perhaps a .net or .me address. Contrary to the belief that search engines favor the .com extension, studies have shown that newer extensions do in fact provide the same SEO benefits as the .coms. You can read more about studies on this subject here: Link1, Link2
(including Average Monthly Searches, CPC and Competition)
SEO optimized exact match domains can capture 80% of the organic search traffic which goes through search engines. This means that a large proportion of customers searching for a particular term will click on the organic results rather than the paid adverts. By optimizing your domain for a competitive keyword you could save money others spend on PPC and get a much higher percentage of the traffic.
So the formula is: (Cost per Click * Monthly Exact Match Search Volume*Competition) * 0.8 * 24 (over the term of 24 months). More info about this equation.
Not all keywords carry commercial value, for example including the word free anywhere in the term will de-commercialize a domain.
Basic research related to the term/ phrase/ industry in question is required.
If you have a keyword specific domain then it’s worth noting that the authority created on one page of your site will transfer to other pages which increases the rankings for terms. For example if your home page is optimized for the search term ‘bicycles’ then it is wise to optimize some internal pages for long tail keywords such as ‘mountain bikes’.
Search metrics could be obtained from: “Google Adwords” (under: tools->keyword planner). Fast (less accurate) results also could be found at: KeywordSpy.
Parking Traffic and Revenue
If a domain is parked (meaning it redirects to a landing page with automatically generated ads) then the revenue from the clicks is shared between the owner and the parking company. Parked domains won’t be able to generate nearly as much advertising revenue compared to fully developed domains. This is due to the fact that search engines won’t list parked domains in their results, plus users identify these ads as sponsored content which isn’t generally related to their search term.
Presence of Advertisers for the Term/ Phrase
The amount of active advertisers for a given search term has a direct effect on the value of the domain related to that term.
If you plan on flipping a domain then creating a list of prospects prior to acquiring it will provide you with some basic information related to the quality and quantity of the potential buyers.
Online valuation tools can be helpful when trying to access the value of a domain but they’re not reliable. The only tools which should be given consideration are: Estibot, Sedo and GoDaddy. Sedo and GoDaddy will allow you to see the suggested price during the listing process while Estibot requires a paid subscription (this also includes other tools). If you only need to evaluate 10 or less domains per day, then you should try Valuate, which is powered by Estibot.
We hope that this list has helped you with working out the value of your domain- or one you wish to purchase.