The first lesson that needs to be learned if you want to dig for profits in the world of domaining is how to value a domain name. Of course, the old adage of a domain being worth whatever somebody is willing to pay for it, is very much true. But if you want to establish whether that somebody is paying you a reasonable amount, you will need another means of name valuation too.
Thankfully, this first lesson in domaining is an easy one to grasp. Although the exact weighting that should be applied to each factor of a domains worth is debateable, and is furiously debated daily on some forums, what those factors are is generally agreed by everyone. I will now supply you with a brief run down of the factors that dictate whether your recent acquisition was an intelligent investment or a beginners mistake.
Extension: The first thing that you should know about domain valuation is that .com’s sell for more than .net’s and .org’s. And that although there are exceptions, it’s generally all downhill from there.
Keywords: Although a premium is certainly paid for the exact match variety, even without an exact match, if your domain includes keywords with both a high CPC on Google Adsense and a high search frequency on Google itself, you could have yourself a domain with some value.
Ranking: If your domain not only includes some hot keywords but also ranks for them, you should be looking at some money. Better yet, as it is already ranking, why not build a quick site and add even more value?
Age: When it comes to domain names, the older the better. Many people believe (though some disagree) that Google prefers domains that have had a few years to mature.
Page Rank: The importance of page rank, particularly when it concerns dropped domains, is a hotly debated topic among domainers. Said debate however does not change the fact there are many people that will purchase a domain from you based upon it’s page rank alone. And that’s regardless of whether or not it has been dropped.
Links: If you know anything about SEO, you will know that backlinks are an integral part in getting a site to rank in Google. Therefore, there will always be a market for domains that come with said links already in place. It’s important to remember however that just like in SEO, the quality counts just as much as the quantity.
History: What website was on the domain in the past? Was it a website related to the keywords in the domain or was it a porn/gambling site? The former will increase a domains worth, the latter will greatly reduce it. The importance of history is also greatly increased if the pages of said website are still indexed.
Traffic: You can determine how much traffic a domain gets with Alexa. Although, the metric is not very accurate, a low Alexa ranking does encourage potential buyers.
Directory Listed: Should your domain be listed with in the directory of either DMOZ or Yahoo, that will be one more reason for buyers to make you an offer. Backlinks from such trusted directories are of considerable value.
Brandability: I have left this factor until last, not because it is the least important but because if there is one thing that can make the process of valuing a domain name seem a little like dancing in a minefield, it’s brandability. For every short, catchy, pronounceable dot com that goes for six figures, there’s ten more collecting dust on the aisles of Sedo.com. Much like a domains value, a domain is only as brandable as the buyer believes it to be.
Brian works with a Graphic design London company Shard Design and has worked with many clients at a stage when they were still deciding on a good domain name.