Domain Flipping: How to Value Your Domains

Domain valuation can be an art as well as a science. In this post, I share on how to valuate a domain’s price as realistically as possible.

Domain Valuation Tools

Perhaps the first way a newbie domainer checks out the price of his domains will be through a free online domain appraisal tool. Examples of such tools will be Godaddy Value Appraisal, Estibot and Free Valuator. Take note that such valuations are not very accurate and should only be used as a rough guide to derive a domain’s retail value. For example, a premium domain is valued at USD 47,000 at Estibot, USD 14,383 at Godaddy and USD 2,284.67 at Free Valuator. One reason in my opinion for the wide difference in appraisal is that the value at Estibot and Godaddy may be derived from an end-user’s point of view, whereas for that at Free Valuator it is priced from a wholesale domainer’s point of view. End-users tend to pay more for a domain than a reseller as the goal of the reseller is to buy low and sell high to make a profit. Therefore, the price a reseller is willing to pay is much lower than end-users. There are many types of end-users who are interested in a specific domain – the one who may afford USD 47,000 may be a multi-national company while the one who can only pay USD 14,383 might be a local small business start-up with comparatively limited funds. Therefore, do take automated domain valuation tools with a pinch of salt.

Past Similar Domain Sales

According to Samuel Allcock, one simple and realistic way to put a price on your domain is to look at historical sales prices of similar domain names. Platforms such as Flippa , Sedo and DNJournal publish a list of recently sold domain names with their sale price too.

Rosener Equation: Domain Pricing Based on Search Metrics

As I scroll through the internet looking for ways to estimate a domain’s value, apparently there is a way to do it – through your domain’s search metrics. The formula, known as the Rosener Equation, is calculated as follows:

Estimated Value of Domain = A x B x C x D

A = Exact-match monthly search volume
B = Average CPC
C = Click-through rate
D = Payback period (months)
A. Exact-match monthly search volume for a keyword or keyword phrase.
B. Average cost-per-click (CPC) for a keyword or keyword phrase
C. Estimated click-through rate for No. 1 position in organic search results: 35 percent
D. Payback period: 12 months
The search volume and average CPC of a domain can be accessed at Google Keyword Planner Tool.

There are some limitations of the above mentioned equation. For example, this equation assumes that an end-user is paying for the domain. If you are selling your domain to another domainer, expect the final price to be 10% to 25% of the retail sale price. Also, extensions other than a .com would likely to fetch 10% the price of the .com domain.

As I can’t possibly cover everything under one blog post, I have listed some websites I have viewed in my research for domain pricing. Here are they:

Reference websites:

Domain Sherpa: Rosener Equation

Samuel Allcock: How to Value Your Domain Name

DNJournal: Domain Sales

Ecuras: Determining a Domain’s Value

One thought on “Domain Flipping: How to Value Your Domains

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s