Factors That Affect Domain Value

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Maybe you own an old domain you bought a few years ago for one reason or another. Maybe you have heard of people making money buying and selling domains. You might even wonder if you could make money selling a domain.

If you have a domain you want to sell or want to try your hand at buying and selling domains, you will need to understand domain valuations. A domain appraisal can be one way to ensure you get a fair value, but what do the appraisers consider?

The first thing to understand is that it is almost impossible to come to a 100% objective value for a domain. A domain is worth what buyers are willing to pay. With that said, there are factors that can help you assess the value of a domain. 

Top Level Domain

The top-level domain (TLD) is one of the most significant factors. The TLD is the extension at the end of the domain name. Having a .com is generally more valuable, but you can find value with other extensions. For example, country-specific TLDs can be valuable for businesses that operate in the country of the domain. With that said, there is a long list of extensions, and you will find many that have much lower values.

Memorable Domains

Some organizations will pay good money for a memorable domain. If you can just tell someone the domain of a website, and it will stick in their mind with no effort, it has value. You can also consider domain names that are memorable because of context. If a business sells a specific product or service, having a domain name that is just the name of the product or service could be useful. They are called “exact match domains,” and they can be very valuable.

Keywords in Domains

Having a domain with relevant keywords can be valuable as well. Beyond being easy to remember, like exact match domains, some businesses use keywords in domains as a part of their SEO strategy. For example, if you are a company that sells accounting software, having the word “accounting” in your domain name could offer value.

Long or Short Domains

The length of a domain can make a big difference. In general, shorter domains tend to get higher valuations than longer ones. This isn’t always the case, but it is a good rule of thumb. Most people do not want to type a long string of characters when navigating a website. Longer domain names can also be harder for people to remember.

Simple Domain Names

Simplicity is generally viewed more favorably as it concerns a domain’s value. If a domain has a lot of special characters like dashes or words that are hard to spell, it makes for a domain that is less desirable. It is for similar reasons as to why long domains have less value. Adding special characters and complicated words can make a domain harder to remember. It also increases the chances of mistakes when people try to type the domain name. 

Existing Traffic

Beyond factors like the name and extension, having existing traffic can add value to a domain. If you have been running a business or a blog on the domain for the last few years and built up a steady flow of traffic, it could increase the price you can get when you sell. Age can also matter. Search engines tend to favor domain names that have been around for a while. If you have an older domain with established traffic, you could sell it for more.

Branding

The ability to brand a domain can add value. If you end up owning a domain that is important for a company’s marketing strategy, it might have unique value to that business. You won’t be able to push the value too high because it only has elevated value to one buyer, but it could be a factor that turns a mediocre domain into one that has significant value. 

Market Factors

Various market factors can also affect the value of domains. To start, the overall market for domain names can go up and down over time. If you happen to hit at a time when the market is high, you will get more for the domain. You might also encounter market factors that are unique to specific industries. For example, some industries place a much higher value on having the right domain.

Pricing is critical for selling domains. Beyond that, you also need to consider how you plan to sell. For example, you could go it alone or sell the domain at a marketplace. You could also work with a domain broker. Each method for selling a domain comes with pros and cons, so you will need to weigh your options.