Domain names are unique, every single one of them. There are no two exactly the same, so how do you appraise the value of a specific domain name?
You can’t really! Plain and simple, a domain name is a 100% unique asset.
Many try to use physical real estate to compare domain name pricing. City, street, neighboring home cost, past sales, building costs, price per square foot and so on but none of that compares to pricing a domain name.
The magical algorithm of pricing a domain name occurs when somebody had seen the need to create a pricing tool to place a value on a specific domain. These algorithms can consist of 5, 10, 20, or more data points that relate to domain names in some fashion, all mainly relying on third-party data. Can all this data gathered be helpful in some fashion? Yes, but always keep in mind that no two domain names are exactly alike.
Apple to Apples
In domain name form, there will always be “the better one”. Is Apple.com better than Apples.com? Data is going to add some confusion. Data sees “apple” in apples. Data doesn’t know that often times the plural of a term kills a brand name. Humans do. Apple may seem popular but would apple be so popular without the billions of advertising dollars behind the brand Apple? Popularity/Demand plays a major role in the pricing of a domain name.
Using an automated domain name appraisal tool, you will often see relations: .com, short, highly searched…. = $xx,xxx . Then some data to back it up, which likely will display: Monthly search volume, type-in scores, exact and broad searches, similar sales, advertising costs per click and maybe even some more.
- Apples.com Estibot Appraisal: $159,000 USD / GoDaddy's GoValue "Above $25,000"
- Apple.com Estibot Appraisal: $6.325 Million USD / GoDaddy's GoValue "Above $25,000"
Can you compare Apples.com to Presto.com? No, but automated appraisals do because the two domain names have something in common. Well, actually, many things in common. The TLD, .com. They are both 6 characters in length. Both show popularity/demand in search engine data (data doesn’t know that Presto is a pretty popular small appliances brand and several other brands under the same name, because it's mixed in with the data of an English dictionary word). Both have been registered for over 20 years…
The reality is, somebody paid real money for Presto.com. How much? $10,000? $50,000? $100,000? On February 4, 2018 E La Carte paid $150,000 USD for the domain name Presto.com. That is a lot of money, at least for some. Maybe they would have paid $300,000 and still be happy. Would another company, National Presto Industries, Inc. be willing to pay $300,000 right now for the Presto.com domain? Very likely as they are “stuck” with the second rate, non-brand matching domain name GoPresto.com. Not very professional looking or sounding, when they brand simply as Presto. Not only doesn’t “Go Presto” exactly match the companies branding, instantly creating confusion, they also have to “fight” to not be overshadowed by the Presto.com brand that offers restaurant technology.
Oh, there is also Presto Products, Amazon Presto, Presto Lifts, Nike Presto, Presto Engineering, Presto Tape and thousands more Presto branded things in this world. Only one can own the best .com domain.
Automated domain name appraisals are confused, so don’t let them confuse you. Experience is your best friend when it comes to pricing a domain name for purchase or sale. A trusted valuation will best come from a professional in the domain name industry, often times from a trusted domain broker.
Although it can be fun to use an automated domain name appraisal tool, they are as reliable as a cardboard boat in water.