For purposes of this article, I am referring to Australian domains – and in particular our premium extension – com.au.
So how does one arrive at a fair value for buying or selling a domain name in the aftermarket?
The answer is that it is almost impossible. Unlike gold nuggets, with domain names, there is no regulated or official pricing mechanism to guide you. It ultimately becomes a totally subjective decision.
Comparable sales evidence
To me, this is simply the best guide. Obviously, there are factors within factors. e.g. One word or more; dictionary word or acronym; radio test; popularity; uniqueness, commercialism and search volume. The list goes on.
E.g. a 3 letter domain name like Pay.com.au is going to be worth a lot more than PBL.com.au.
Whilst there are some reported domain sales, the majority are not publicised. Because of this, read blogs like this or go on other forums. Best of all, contact a reputable domain broker who is in the market day in; day out. One suggestion is the publisher of this site. 🙂
Real estate agents use the comparison method to try and arrive at a market price for the properties that they are selling. Though in a sellers market (and in an effort to get a listing), they are also influenced by what their vendor’s expectations are! For mortgagee auctions, banks employ a valuer to ascertain a minimum value based on comparable sales evidence. These values generally tend to be more conservative than those of the real estate agents, because they have to cover their butts!
Demand and Competition
If there are two or more identifiable buyers who want a particular domain name, then fear of loss can greatly increase what a domain may be worth (under normal circumstances). One party simply does not want another to have that domain. This is seller nirvana, but happens rarely. If you don’t feel confident handling a situation like this, then once again, a good domain broker can assist.
Any serious buyer or seller of domain names should ignore these. Values can be all over the place. The only time I use them is when they can assist me! 😀 Two major companies that offer these type of valuations are GoDaddy and Estibot. But as you can see from the screenshots below, they are poles apart. So who do you believe?
And now GoDaddy – over $5000 less!
As always, interested in any comments or feedback.
Ned O’Meara – 27th August 2019