Okay this is the continuation from Part One    

Domain Name Sales

Of course just by the shear nature of the question you know which one I will pick,

ipodaccessories. Now why would I pick it? Common sense really,

I will never be able to compete with apple or the other major players for

iPod sales or traffic, and not to mention the law suit from apple as well. However,

ipodaccessories not only gives me a niche market, it also describes exactly what I

sell and it is a heavily searched on term online, if done correctly, I could out rank

apple computers for search term iPod accessories. So, you really need to think

about exactly who your competition is, what search terms are being used and what your customers

are looking for. Now before I go too far, I will mention something else here, many

SEO’s will tell you that owning the exact search term as a domain only matters for a

short time with the search engines, but I can tell you that this is not true, for many

 reasons. In the purest since they are right, but this does not apply to you or your

business, and it is because of several hundred other factors that the SEO’s are not really

taking into consideration, the main one being is real business sales, new additional monthly

traffic, organic traffic and advertised traffic. Plus one of the biggest reasons is that Google is

the only one that really does this, the other search engines always place value on the domain

names page titles etc. Google tends to spread out there reasons for sending people to

sights which I won’t get into here. SEO is a complex discussion and can be argued for months

even amongst the so called Gurus. But keep one thing in mind, that built in traffic we are

talking about, it is there every day and every month year after year, regardless of other

ranking results. SEO’s tend to think about the short term one time only sales, and even then

they don’t really care about sales at all, they are about traffic only, and that is only a part

of a business model.

     Now let’s get back to the main subject, domain name values. So I placed a value of 10 thousand on the

 domain and now I will place a value on the brandability of the name long term. For cholesterol diet research I

 will only add about 10% for brandability, it is more a percentage of improved traffic based on branding, and it

 is a guess more than anything else but tin higher value names like InternationalScience, those values can

 actually be calculated using some other facts that we will talk about a little later.

 

     It is important to evaluate if the domain name is directly related to your business. Like iPod accessories, do

 you sell iPod accessories or shoes? If you sell shoes then the domain name ipodaccessories, might bring you

 traffic however, your sales would be dismal at best. If you sell iPods, well your sales might do okay if you prices

 are competitive but your sales will do the best if you actually sell iPod accessories not iPods or at least both. Do

 I add value to a domain based on this, sometimes but not usually? If I were selling the domain iPod accessories,

 I would add value for the name because I know that the several people are going to be interested in this domain

 who plan to sell this exact product and there is a huge demand for it, so I will add 100% additional value for

 this high domain which would make that 10k worth 20k. But with a name like InternationalScience I might only

 add 10 to 20 percent because the name itself is just a little too generic to target a specific audience for a specific

product.

   Is the name brandable? There are two issues here, one is the name easily brandable like International Science

 which has 150k plus people searching for it, and has 140 million websites that specifically target the name or is

it just slightly brandable like yahoo and I mean before the name was known. Yahoo was only brandable because

 the name is short and catchy so yes it has brandability but over the long haul and only if the money and time is

 spent to brand it. So there is a wide range of possibilities and both you as the buyer and I as the seller have to

 decide how brandable that really is and how much value to place on it. In the case of international science, the

 brandability is worth 10 to a thousand times the actually traffic currently coming to the domain name now, but

 a large part of the burden to brand the name is on the buyer, so I only place a small additional value on the

 domain name for that, but I also consider that there are very few brandable names like this available so I

 decided to put a 10 to 100 percent increase in value based on that. So if the value is somewhere around 150k

then I would go for 170k to 300k for the total value so far.

     How many words are in the name in this case two words and this is where I would normally subtract value

 from the name but in this case the name is the recipe for exact search results and it is a well known term, so in

this case, I will actually add value for the two words instead of one word domain this is merely just a 20%

increase since I normally would subtract value. So for the above example now we are at 360k.

So, you’re probably thinking, what the hell did he just say? Well Science.com is a one word easily trafficked

website, but it is limited to specific traffic that could be changed only by the web designer and that is

international appeal. Internationalscience will bring in two to three times the traffic from international sources

than science.com will. Domain extension now plays a role. In this case I always start the evaluation based on it

being a dot com, so if it is a dot anything else, I subtract from the value. If it is a dot net, then I cut the value in

half and if it is a dot org, then I cut it in half again so 360 would become 90k. But this can change depending on

how the name relates to the extension. InternationalSience dot org can have the same value as the dot com

because the genera it reflects, and the dot net could even have the same value as the dot com if it were used as a

service for many of the different world science projects that are commonly used through joint servers for science

research, but this type of thing is pretty rare to find in other domains, but it can have an added value, and that is

why again in this particular case I will add value if I were selling the dot com, net, and dot org together, because

not only have I captured the whole international science market but I have secured the search engine traffic

values as well buy owning all three. So this could easily triple the value of the set of three names turning this into

a 1million dollar value, because you are not only adding value but security from competition on the domain

name itself.

 

     Just a little note here I used Internationalscience and cholesterol research as examples because I own them

and I wanted you to see how I came up with their value. I am not concerned whether there is a big market for it,

or if the economy makes them worth less or if there are only two buyers who can afford it, I base it on real

business value the ability to make money with it.

    

     Now how many other websites use these exact key words and phrases of the domain is extremely important.

In the case of InternationalScience, there are over 140 million websites currently using this exact phrase. How do

I place value on it, well it is kind of a joint issue with branding and trademarking.

     With branding alone it has great value, if I were to brand this name that means I already have 140 million

websites out there branding my website for me by using the key phrase International Science, that is 140 million

websites providing me with free advertising from the very second I build my website. This Is really rare, so I

could place a 10% market up on the domain name just for that alone and I don’t mean 10 percent of the

domains 100,000.00 I mean 10% of the 140 million, but I know I will never sell it so I don’t bother, but I will

add a few dollars to the value, more of a blue-sky value maybe like 100k to 200k value a little more reasonable.

 

However, the final analysis is the fact that the term International Science is not only a common phrase worldwide but it is searched on in Google alone 150 to 200 thousand times per month but there are 140 million websites already talking about the term, even more important the name has never been trade or service marked. Because you could service or trademark it tomorrow, and you could automatically force 140 million websites and tens of millions of businesses to recognize your trademark, you could make a ton of money just from trademark alone making this term international science priceless or worth hundreds of millions of dollars.
I placed a 10 million dollar value on the site but listed for sale for 2.6 million at one point because I know that I personally will never have time to configure and build a proper website for this domain in order to obtain the necessary trademarks and grow the traffic necessary for the sites ability to sell. So the domain to me personally is worth my ability to sell it to someone who can make real use of it. I am not a scientist or a science buff therefore I can’t really make the best use of the site, but I am a self made expert in SEO and know the value of the domain.

So this gives you some idea of how I evaluate domain names, of course there are literally thousands of factors you could use to evaluate names, but I use the primary fact that most domains are used for sales and so the value is pretty easy to determine based on that alone. If the right person or organization built a website on the domain InternationalScience.com they could easily obtain 100 million in revenue in the first year of business, if trademarked and branded properly and of course had the right products and advertising.

I used this domain as an example because I own it and thoroughly understand its marketability. But you can apply these criteria to any domain name and come up with a fair value for your domain name or one you are thinking about buying. Remember this model really applies to those folks who are really in the market to build a real business, not those who are merely buying and selling domains or just getting involved in the internet for the first time.

Issues not discussed were websites already on domains, or in in-depth look at SEO tactics or in depth look at domain name sellers. Remember domain name sellers are just in the market of selling and making money, they don’t really care about what that domain can really do in the right hands or for the right business. They merely look at how fast they can sell it, and how much the market will bare.

 

If you’re in the market for a domain name you really need to do your research before purchasing a domain name. If the domain name has existing traffic, then you can expect to spend years developing branding and traffic to develop a site. With built in traffic and having a targeted domain name, then you are already built in very specifically targeted traffic for your site which makes a huge difference. You don’t have to buy it, wait for it, or continue to worry whether you will ever see real traffic because it is already there.

It is obvious to me that domain name appraisers have no clue about SEO and have no real clue about real business, they only seem to place value on the domains based on some unrealistic internet value not related to business at all. When I see domain name sellers selling $500 to 10,000 dollar domains that have no hopes of ever being branded and have zero traffic, why would you want to own it.

I own another domain twitterexplosive.com. It has no traffic, no search results, and can’t be branded because twitter is already a branded name, why would I own it,well in this case it is because there happens to be a Niche market for twitter related products and having a catchy phrase like twitterexplosive, might get
Prospective twitter programmers or companies that hope to catch a part of the billion twitters a day’s business, but from any other business perspective it has no real value until the buyer makes one.

One of the biggest misconceptions with appraisals is that domain names have no real value until the website builder makes it valuable which is nonsense.

The value in the name is as important as the business when it comes to online sales. If you project 100 million in the sale of iPods and the only domain name you can obtain is shoes.com, then I would say that the domain name is more important than the website or business, because you better start selling shoes if that is the only domain you can buy.

I don’t want to get into long SEO discussions here because there is allot more about SEO than I could possibly write into this somewhat brief article, but keep in mind that the domain name, the business, and the website creator, as well as your specific business model are all going to play an important role in your traffic and sales.
One site you can use for checking traffic is Google keyword search tool. It is NOT the whole picture though, but a good place to start.

1. Traffic is worth at least $1 per person per month. 10,000 people searching for your exact domain name is worth 10k for domain name sale.

2.  A Names catchy value, or unique value such as a name like Google, hulu, coca cola, yahoo, add a small value for that for branding purposes. Maybe 10 to 20 percent. Or if highly brandable then you can add 100 percent to the value.

3. How related is the domain for your business, value is subjective by the particular buyer or seller.
4. Trade or service mark for highly traffic sites can raise the value to infinite values however, you can’t include things like ipodaccessories, because you can’t fully brand the IPod so there for you may even devalue the domain for that.

5. One or two word domains are good but three words or more can be worth less in many cases depending on the traffic from the search engines. Hyphens and various other extensions other than dot com devalue the domain name significantly.

6. How many other related sites use the exact phrase or words of your domain, this will have a more significant role if you a trademarking your domain.

Another thing I might mention, I own a domain call Aplusauctions, and the value of this domain is very high even though you might not find much traffic and the primary reasons are there are real world businesses around the country who use this name for their business, but no one has trademarked it, there for it is open for a trademark which makes it worth allot since you can capture a huge market online and those auction houses are not using the name online. Plus the name is just catchy enough to have good brandability, and that can be seen by the fact that there are at least 20 aplus auctions houses around the country already. I happen to buy it because I liked the name and needed to have an auction site for another business I had online. I just happen to get lucky when I purchased it to later find out it was a great name for branding and marketing.

Anyway, I have always loved SEO and online selling, so if you have any questions you would like to discuss with me just email me, if I have the time, I would be happy to discuss any questions you may have regarding domain names and related values.

EBAY WARNING:

I see allot websites with fake traffic reports and statements like I am ranked number one in the search engines, or High search engine rankings or been on Google for years. Pay zero attention to this nonsense. It means nothing.

People can fake traffic reports and can fool alexa.com easily using online engines to drive fake or non existence traffic to their websites. One way to tell is watching the alexa.com rankings, if someone hasn’t had consistent alexa.com rankings for a year or two, then you can pretty much count on it, its’ fake and one thing is for sure it is not organic traffic.

One of the things I really get pissed off over is when I see claims that their website is number one on some search engine, Google, msn, yahoo, etc.

Keep this in mind, everybody’s website is number one under its own name, if it’s been online long enough you will nearly always rank number one under your own name.

If your domain is dog-get-cranky.com and it is number one in Google under "dog get cranky", then who cares, nobody is searching on the phrase “dog get cranky” there for it means nothing, NOTHING!
And I will repeat it, NOTHING AT ALL!

In order for search engine rankings to have meaning, it has to rank with phrases that people actually search for. I will give you a real world example.

Nobody ever heard of the dot com AuctionBlackList.com until I created it and drove traffic to it. In the beginning no one searched on AuctionBlackList.com until many years later when I finally built a business and branded it. But people did search for “auction Fraud” and internet Fraud which was critical because that is what my site was about and my site ranked number one because I built it that way and it took time to get that ranking. Years later my site ranked number 1 with over 27 thousand keywords and phrases, and out ranked government and federal websites. Only because I knew how to get it ranked.

If someone is selling a ranked site, then they will have related equivalent sales. You can see this by searching on what they sell in the search engine. If the site has a name like dogs get cranky and they sell dog collars, then go to Google and search dog collars and see where that website ranks, if it isn’t on the first page of Google, forget it. That means there ridicules sales stats and traffic statics are nonsense.
If they claim they use targeted adwords campaigns, you can check that the same way, if they are really getting the traffic they will have adds that show up in the top page of Google.

Another way to check is type the word dog collar into Google and go to the first couple of websites both organic and advertisers websites, once you get on one website then copy their URL and go to alexa.com dot com and place that companies URL into alexa.com and see just how much traffic that person has, if they have very little traffic from organic website and adwords websites then you can plan on it, that the website you are buying which doesn’t even show up on the first page of Google has no chance of make money.

Believe me I have looked into thousands of websites on eBay and in 99% of the cases the websites are virtually worthless unless you think you can develop the traffic yourself, which for most people is beyond their capabilities.

In 10 years of looking at websites on sale on eBay, I have seen only 3 that were real and even their statics were higher than their real traffic and sales.

Of course I don’t look at websites on eBay everyday or even every month but I do it often enough that I do have a good consensus as to what is normal for eBay website  sales.

Bottom line is that people who are making money with a websites rarely, and I mean rarely ever sell it unless the traffic is falling off or they know that there business model is going to be hammered very shortly. A real good example is Google is changing things up right now and allot of adsense and hop URL connections will all the sudden become useless which means all of sites will lose all their sales over night, this only applies to certain types of sites, adsense or hopurl links which usually are used with affiliate sites. If you don’t know what these things mean, then you probably shouldn’t be buying websites related to these types of products.

Couple of other notes;
How are you going to use the site, primarily for advertising, or for product sales, if it is for advertising then the domain name is going to be worth allot less to you, because advertising will only produce limited amounts of money and you will be locked into a specific type(s) of products.
If you are building a direct sales site then the site has allot more value to you because direct sales bring in allot more profit per sale and because clients will return to your site to purchase again and again. Unless, you are doing a review site which can make direct sales, but another warning, review sites are going to soon be gone as well, Google is working on dumping these hopurls and when that happens affiliate sales will drop in half, unless you really know what you are doing. But on the brighter side, it’s only Google doing this.
IF you are building an information site that has both direct sales and advertisers then you have the best of both worlds.

Domain Name Sales
This little bit of info I am going to provide here is worth more money than the domains I am selling, so read very carefully, and this is why I put it at the end of the article for those of you who took the time to read this.
If you are in the direct selling industry, you are far, far better off advertising with MSN rather than Google. Two reasons, one people searching on Google tend to be more researcher oriented and less buyers and people searching on msn tend to be direct buyers looking to buy product. Plus the benefits of msn being cheaper to advertise on and easier to rank on and it supports two search engines Bing and MSN. Google is far more expensive and percentage of sale is far less per traffic volume.
I just gave you a million dollars worth of info in one paragraph.