We are bombarded with news of companies acquiring other companies for hefty unimaginable sums of money. Quite normal in the business world, right? Now, what if we tell you that there are businesses out there willing to shell out exorbitant amounts for a domain name, they (absolutely) need? That’s right. Can you imagine someone paying millions of dollars for a “virtual real estate?”. Well, believe it or not, this is true. In 2014, Gannet paid a whopping $872 million to purchase the domain Cars.com, which remains the highest domain sale to date.
So, what makes domain names so attractive? From brand identity, industry relevance, and marketability to global reach, emotional attachment, and more, these factors play an important role in valuing a domain.
If your curiosity has led you to ask ‘‘How much is my domain worth’’, you are at the right place. This blog highlights domain name value and how to calculate it in simple words.
Let’s get to it. But before we get there, we need to know what domain valuation means.
Understanding Domain Valuation – Definition and Importance
Everything has a price. From your house, car, smartphone, to other assets. Similarly, depending on factors, a domain name has a certain value attached to it.
Domain valuation, also referred to as domain appraisal is nothing but the process of determining the value of a domain. While the domain name value depends on various factors, it can be evaluated based on the traffic it currently generates and its potential growth in the future. That said, it is worth noting that there is no fixed formula for determining a domain’s valuation and the criteria can vary from domain to domain.
Now, let’s turn our attention toward understanding the factors that make a domain name so valuable.
What Makes a Domain Name Valuable
As mentioned earlier, there are a few factors that come together to give a domain name a price tag. This section explores them in detail.
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Top-Level Domain (TLD)
You may have seen websites ending with .com, .net, .au, and most recently, .ai. These are top-level domains (TLDs) that carry a certain value. For instance, .com is one of the most popular and also among the most desirable TLDs today, and for good reasons which we aren’t going to tap into today.
That said, the industry relevance of a TLD is another factor that influences the domain name value. For instance, .ai is becoming increasingly popular since the recent spike in the interest levels of artificial intelligence (AI).
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Domain Length
Let’s admit it. Nobody likes remembering long names and addresses, and the same principle applies to domain names. Shorter domain names are more valuable than longer ones as they are easier to recall and type. The shorter the domain length, the more valuable they are.
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Keywords in Domain Name
A domain name’s value tends to go up if it contains a relevant keyword or phrase that is associated with a business or an individual. Additionally, domain names with niche or industry-specific keywords typically have a higher commercial value than those with generic terms.
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Traffic to the Domain Name
Why are some parts of a city more expensive than others? Why are highway-touching properties more expensive than those that lie inland? It is because these areas have a higher footfall and visibility, resulting in a higher commercial value. Similarly, a domain name with high web traffic has a higher value than one with modest and lower traffic volumes.
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Domain Age
Domain appraisal also depends on domain age. Established and older domain names are typically valued due to their website authority and credibility. Additionally, the search engine optimisation (SEO) benefits that come with an older domain name play an important role in boosting the domain’s value.
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Domain Popularity
Domain popularity has overlapping factors with domain age and traffic. The logic is simple here. The higher the domain’s popularity, the higher the domain valuation.
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Branding Potential
The branding potential of a domain is another factor that impacts the domain valuation. Apart from the industry relevance, buyers look at how well a particular domain name can elevate brand presence and whether it has any branding potential.
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Demand for the Domain Name
Yes, there is some degree of economics involved in domain valuation. Again, it is not rocket science. The valuation of a domain moves in an upward trajectory as the demand increases. Additionally, the performance of similar domain names is another important metric that determines their commercial value.
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Backlink Profile and History
A website’s SEO performance and domain authority hinge on several technical aspects, including credible and high-quality backlinks. While backlinks play a key role in improving a site’s search visibility, it is crucial to audit the website regularly to remove spammy and broken links to maintain a good rank across search engines.
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Trademark and Legal Issues
It is common knowledge that trademark infringements can lead to legal complications, so it is important to verify a domain’s legal status before purchasing it. A domain without any legal complications is valuable due to its long-term usability.
How to Calculate a Domain’s Worth?
Now we have a fair understanding of the different factors that influence domain valuation. Now, let’s understand how to calculate your domain’s worth.
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Research
“How much is my domain worth?”. Unfortunately, calculating the domain name value is not straightforward as it involves a bunch of –. Having said that, one of the most logical ways to begin this process is by conducting thorough research and understanding the value of websites with similar domain names.
Several sites compile data from numerous online marketplaces and post the latest domain valuations. Additionally, these databases serve as a – to identify in-demand domain names, high-value domain names, and more.
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Buyer’s Interest and Emotion
While research is a great starting point for the process of calculating domain name value, it will only get you so far. It will not help you understand the exact domain name value, as it only takes into account the technical factors involved. However, it is worth noting that businesses, especially those with super competitive and ambitious founder, are willing to go to any extent to get their hands on a domain name if it aligns with their vision.
You have hit the gold mine if someone is willing to pay a premium to purchase a domain name from you. Gauge the buyer’s level of interest and emotional connection with the domain name. You can leverage these deals to negotiate a favourable deal.
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Algorithmic Valuation
Domain appraisal via algorithmic valuation is one of the best ways to calculate the domain name value. The arrival of domain estimation tools has simplified domain valuation as these tools rely on data, including domain popularity, domain length, keywords, and other points mentioned in this article, to determine the domain valuation.
Domain Valuation Done, What Comes Next?
After learning how to calculate a domain’s valuation, here are a few action points you must remember to safeguard your domain.
Find a Domain
Find a domain name free from legal problems and verify its availability. Purchase it from a domain registrar if it is available, look for alternatives if it is taken, or simply approach the domain owner if you are willing to pay a premium for your desired domain name.
Renew Your Domain
While purchasing a domain is one of the major steps toward building your brand’s online presence, it is also important to renew it before it expires. You can opt for auto-renewal to ensure your SEO and digital marketing activities remain uninterrupted.
Protect Your Domain
It is very important to protect your domain from phishing attacks, cyber crimes, and other potential threats by enabling domain privacy protection and securing it with SSL certificates and multi-factor authentication.
Parting Words
Firstly, we are happy we could help you determine your domain’s valuation. We hope that you are equipped to find out your domain name value and make informed decisions. In your journey to valuing a domain, it is crucial to know what factors make it a more appealing and commercially viable asset for others.
How much is my domain worth? This is a very common question that doesn’t have a straightforward answer. As seen in this article, domain valuation depends on various interconnected factors, which is why we do not have a one-size-fits-all answer to your question.
Frequently Asked Questions (FAQ)
How is domain value calculated?
While there is no formula to calculate a domain value, you can use its length, popularity, demand, and TLD to determine its value.
How does a domain value go up?
The domain values tend to go up as a domain becomes more popular, attracts more web traffic, is SEO-optimised, and is associated with a TLD.
How much do domains usually sell for?
Typically, domains sell for anything between a few hundred dollars to millions of dollars, depending on the industry relevance, demand, popularity, buyer interest, and traffic.
How can I sell my domain name fast and for maximum value?
You can sell your domain name fast at a great value through domain valuation or by using domain appraisal services.
Why should you check your domain’s worth?
It is important to determine your domain’s worth, as it empowers you to make informed decisions about how you can leverage it for your brand’s growth. A high-value domain is not only good for your SEO, but also an invaluable digital asset you can cash in on if you decide to pivot your business in the future.
How do you find the domain value?
You can calculate your domain value by researching, using domain appraisal tools, or contacting a domain broker. Some of the key parameters that influence a domain’s value include backlink profile, online traffic, keyword rankings, and brand value.
How often should I check my domain’s worth?
While there is no thumb rule, it is a good idea to calculate your domain’s worth at least once a year.
Are domain brokers worth it?
Domain brokers are worth it if you are dealing with very complex and high-value domains that typically involve multiple rounds of topsy-turvy negotiations.
What is the domain calculator?
A domain calculator is a digital tool that allows potential buyers to determine the market value of a domain depending on factors including domain age, SEO health, online traffic, and domain sales.
How do I permanently buy a domain name?
It is worth noting that you cannot buy domain name permanently since most domains are available for a maximum of 10 years. However, domain owners can renew their domain ownership to secure it for a maximum period.
How much does it cost to check a domain name’s value?
Although many tools provide a fair estimate of a domain name’s value for free, you may need to pay around $20 to $100 for detailed insights and reports.
