Let’s be honest about domain appraisals. First and foremost, a domain is only worth what someone is willing to pay for it. Appraising a domain can be near impossible to do with any accuracy. Even some of the well-known industry leaders fortify this in their messages.
Mike Mann Via FaceBook “The only domain appraisers that have any legitimacy at all are the market makers who buy and sell large numbers of premium domains over the generations, of which there are about a dozen in the world. Any market predictions, offers, appraisals or domain pricing from any other sources, like VCs or bots or uneducated marketers are useless and therefore very misleading.”
Mike then went on to say:
Mike Mann Via FaceBook “The problem with domain appraising and dealing is that each name is in fact unique and there arent perfect comps, all the data is rather abstract, its really circumstantial evidence instead of fact, reading tea leaves, one needs a ton of data, the ability to read it, and good instinct, be able to read and bid and use online tools very fast, very high tolerance for risk and bankroll for it, low sleep, deal with crazies and poor communicators all day. However, can work from home and make good margin.”
While I may not agree with Mike about his New gTLD views, I do agree with most of his logic regarding appraisals. It truly is impossible to slap an accurate price tag on digital property stuck in a fluctuating market with multiple value variables. There’s no way that an automated appraisal script could possibly give an accurate value.
What variables am I referring to, you ask? Below is a list of a few to keep in mind:
- Domain Length
- Premium Letters
- Original Content
- Previously Developed
- Development Possibilities
- Verifiable Revenue
- Target End-User(s)
- Target Market(s)
- Market Shifts
- Keyword Value (cpc)
- Keyword Competition
- Competing Sites
- Dictionary Word
- Language Matches Extension
- Previous Sales (Same Domain)
- Similar Domain Sales
- Existing Trademark
- Taken In Other Extensions
- Verifiable Traffic and Sources
The above is just a handful of variables to consider when appraising a domain. It truly does take someone well rounded in at least all the above listed to appraise a domain, and even then, it wouldn’t be 100% accurate. Like I stated in the beginning of this article, a domain is only worth what someone is willing to pay for it.
Don’t fall for the appraisal scam:
One of the most popular scams targeting new domain investors is the “Appraisal Scam”. An appraisal scam can easily be detected, as the scammer will make you an offer for your domain asset and then direct you to a site for a certified appraisal before they purchase it. Of course, the site they direct you to will be charging a fee to get a certified appraisal and once you get it, the buyer magically loses interest in your domain.
Since 1996, Eric has managed companies with 240+ employees, online communities with over 1 million members, attended numerous industry related events/conventions and has personally worked with start-ups, personalities, small mom and pop businesses, corporations, freelancers, news outlets, and a variety of domain investors one-on-one from all over the world. That equates to a lot of years behind the scenes with his fingers firmly on the pulse of multiple industries.
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