Domain name appraisals

Domain Name Sales

      If you want to know more about the DOT-TEL Domains you will have to go to one of the actual Dot-tel auction pages for now. I will post an article on the Dot-tels when I have more time.

     This section is about domain names and how I arrive at their respective value, and hopefully this will help you the reader understand the domain name market or marketability.

     I am not going to try hammering other domain name appraisers but I will say that most if not all of them

have no idea how to appraise the value of a domain name. I am going to describe how and why I value domains

the way I do. In allot of cases you have to be very careful about people who claim to have appraisals for their

respective domain names, many of them own their own appraisal sites and base their appraisals on one thing,

how much will the market bare to buy the name, Wrong answer. However, most of the inexperienced consumers

do the same thing.

    

     I also want to apologize up front, I am neither a writer nor English major and there for you will have to

forgive my poor grammatical mistakes.

    

     Who am I, well I have been online building designing, creating, websites and domain names for 10 years and

I have owned some of the top ranked sites online over those years. So I have allot of experience working on

websites, website traffic, and Google, msn, yahoo rankings for years. Until recently I never sold or wrote about

my knowledge online, but I am now getting older and no longer wish to spend all my time online building,

buying domains, websites, etc. So, I have now begun to sell off some of the domains that I have owned.

    

 

     The following is a brief explanation of how and why you should or shouldn’t buy a particular domain name 

and how I arrive at my prices for domains that I sell. I feel that there are 3 major factors in domain name 

values, of course there are other underlying issues that can vary costs, and I will mention most if not all of them

here at some point. However, I want to mention a couple of things that you should understand before I get

started. I believe that allot of the so called appraisers value domain names on two additional factors that I do

not place value on. One is whether there is a website on the domain, and second is it a one, two, or three word

domain or hyphenated domain which they place negative weight on the value. I am going to tell you why these

things rarely matter and in most cases why you should not place much weight on those issues many cases either

depending on whether the website is direct sales or advertising sales will matter more.

    

 

     When you start evaluating things that have little importance on an issue, then you need to evaluate 10

thousands things that are also not relevant. If you don’t understand what I mean, let’s take an example. If you

had the domain name Coca Cola evaluated for value you would get a ton of money for it, right? Well, maybe,

but in the real world you probably wouldn’t, because you are not Coca Cola, so more likely you would get sued,

and second, what if all the sudden the economy went into the toilet and coke wasn’t selling anymore, then the

domain name would lose considerable value right away. So, what I am trying to say here is you can evaluate

domain names based on millions of issues, all of which shouldn’t really matter on a day to day bases.

    I evaluate domains based on everyday use and actual traffic, and sales results. Also the Domain Name Gurus

would devalue Coca Cola because it uses two words instead of one, this is stupid. It is one of the best branded

names ever invented whether Coca Cola ever made money or not.

 

 

     Another thing that domain names get valued for is how many words are in the domain and whether they are

hyphenated and this is really stupid and I will explain why. Let’s take the domain name (swy6e.com) vs.

(did.com) vs.  ( cholesterol-diet-research.com) vs. (InternationalScience.com) as examples. I am going to explain

to you why and how you should evaluate these domains.

    

 

    This one word domain swy6e.com is useless on Google, msn, yahoo, etc. why would anyone think that this

domain name has value? Can you sell products with it, does it have traffic from the search engines, does it

sound good, does it have brand ability? And I can say for sure it has none of those things, yet people buy them,

what a waste of money.  If you think that the amount words in a domain name have some bearing on the value,

think again, it does have some relevance but as you will see a little later, it has less affect overall than you might

think and in many cases actually adds value. The only one word domains that have value are those that can be

branded, already have traffic, those domain names that meet the brand ability criteria and those which can be

service or trademarked. I will get into the service and trademark issues later and how this can make you a

fortune.

    

 

     Let’s talk about ( did.com) its, a word, it is a single word, should it have value? Again can it be branded,

does it have traffic from search engines? What relevant products can be sold using it? Not really! So again what

is the value of the one word domain, to me, nothing! The value is Zero unless you can somehow brand it or sell

products with it.

    

 

     Now I will mention one thing that I leave out of my evaluations, I do not place value on domains based on

consumer demand for the name, and I will tell you why, if you start placing value based on demand for the

name then you will have domains that have allot of value that should have none and you will have domains that

should have huge value but in the market would have less merely because there are only just a few people who

want it. There has been a value created for one word domains merely because they are one word domains and

for no other reason, this is ridicules, and yet I see fantastic domains that have two or three words that are

devalued because they have too many words, wrong answer.

 

 

     So your probably thinking, it doesn’t matter what I think, it matters what the consumer or buyer thinks that

matters, in this particular case you would be wrong. What makes the domain worth money is what that domain

name can do for your business in reality and how it can provide traffic to your site, and that really is the only

thing that matters. If someone wants to pay 10 million dollars for the domain stupid.com, I have no problem

with it, but I would rather own the domain name Ipodaccessories.com a two word domain which I could

probably purchase for 10K.

 

 

     Of course some one word domains make since and are worth allot of money like Loan.com Have you ever

wondered why someone would buy or register the domain Cholesterol-Diet- Research.com? If you are wondering

here is the answer if you were (adsense or adwords) expert, you would know the answer, but the average person

is not an internet SEO, so allot of folks have no idea why someone would buy or register a domain name that

has hyphens and multiple words.

 

 

     The reason is really simple, it is because that specific phrase is being searched for in the search engines with

that exact phrase and it already has built in traffic because of it. So by buying it you already have captured

traffic and you also have the number one searched on word in your domain name, Diet. So this acts as a twofold

deal. Does this matter, you bet it does. Not only does it matter, but it is a niche market great for adsense. If you

want to know what a niche market is, do a search on Google. I rank domain names on existing traffic, if you

already have traffic searching for you domain name, then you have built in traffic, and that is worth a ton of

money. Domain names compared:

 

 swy6e.com has Zero people searching for it!

did.com has zero people searching for it!

Cholesterol-Diet-Research has 15,000 people looking for it

InternationalScience.com has 150,000 people looking for it

So which one is worth the most? You tell me! The one word dot com or the traffic?

 

 

     It really is just common sense, the inexperienced buyer has really damaged the domain name market by

buying domain names which have no value and have created a market for the one word domain, but if you’re

buying a domain to make money with it, or your buying a domain to build a real business then the only domain

that is worth anything, is one that meets the below criteria.

 

Criteria for evaluating domain names

1. Does it have traffic already
2. Is the domain name related to my business model
3. Is the name brandable
4. Can it be trade or service marked
5. If trade or service marked will it add to the value
6. How many words in the domain
7. What is the domain extension dot-com, net, org, tel, etc?
8. How many other sites use the exact word or phrase you own the domain for?

    

 

Your probably wondering about now how I place these factors in the value, well I use traditional value

models that have been used for years for real businesses, not those biased over evaluated models that the

internet has over inflated for no real reason.  It used to be that businesses were sold using a few basic criteria.

You have to remember however with internet domain names you are only paying for a part of the business, the

name. But in some cases the name alone can make or break your business both online and off.

 

 

     One simple quick way to evaluate a business value was to take the gross profit that a business made over a

two to five year period and that was the value of the business. The difference of the 2 or 5 was based on some

other criteria like brandability, longevity of the business growth model, and some other factors, but what I want

to point out, was it was based on a time period and earnings. So, when I begin my evaluation, I base it on

existing traffic and long term brandability for the name So let’s look at how this works. If 10,000 people search

for the exact word or phrase of your domain name then I place an instant 10 thousand dollar value on the name

because there are 10k people searching on it. How do I arrive at this, will it is similar to the real world business

model.  I use a one month traffic number and place a one dollar value on every customer that comes to that site

in a one month period and that is a very small amount because it is likely that the product that will be sold will

be between 15 to 50 dollars per sale and the profit from that sale will be well over a dollar, so placing a dollar

value on each person coming to your site is very small amount of money to pay for the domain name that will

bring you in 15 to 50 times that money per month, not to mention for life. Believe me when I say this is a

modest price to charge for lifetime permanent built in traffic.

 

 

Note: If your domain name only has a partial word or phrase in the domain, it really has zero value.

Ex: if people search on rattle snakes and your domain is rattle, your domain is worthless.

Ex; If people search on rattle snakes and your domain is rattlesnakepaper, it is worthless unless of course you sell rattle snake paper, but even then it won’t be worth much.

When I am referring to worth, I mean that people search on your exact domain name nothing more, nothing less. Of course you will get some traffic from similar names and uses however, the traffic will be more likely due to the website creator and not your domain name.

 

EBAY WARNINGS: at the bottom of this article there will be some warnings about eBay websites and domain myths that you may want to read.

 

     I want to make something very clear here in regards to the domain name and search engine results.  Even

though you may get traffic from related terms, it will have more to do with the website that resides on the

domain and not allot to do with the domain name itself. I could spend allot more time going into the details of

how this could or would affect you, but my primary goal here is to create a domain name value and nothing

more. Now back to our discussion; So now do I sell the domain for 10k, no, probably not. It will now depend on

how brandable the domain name is, both short term and long term. What’s the difference, well it has to do with

whether you are building a website for long term business or for short term business like adsense websites.

     If you have a domain name like cholesterol-diet-research.com it has allot more value as an adsense site than

as a brandable domain for lifetime business. So, the domain has less value for a business person and therefore

has less value over all. This doesn’t mean that a business person couldn’t turn it into a brandable name, it is just

less likely because it is three words and has hyphens.

 

 

     Another bit of information to consider, in most cases I feel that two word domains are the best overall

because they have several promising factors, the most important of which is two word domains are far more

descriptive than one word domains and here is one example to keep in mind when thinking about domain

names.

 

     In a real world situation, which domain would you rather own. ipod.com or ipodaccessories.com? Spend a

few minutes really thinking about his one. If you sold ipod accessories which one has more value!

Domain Name Sales

Due to ebay limitations I had to put this into two parts so this is the break point for part one.