Domain Appraisals – Are They a Waste of Money?
I think all you really need to know about this can be answered by Christian Kallad, who is the director of brokerage for Sedo North America. Christian said, “If you ask 10 different experts, they are sure to tell you 10 different things (about a domain’s value)."
Not exactly a great advertisement for their domain appraisal service but I think it’s spot on. As giving an accurate value to a domain is pretty much impossible. The main problem facing the industry is that there are no standards. An appraiser merely tells you what they think the name is worth and different appraisers will have different opinions. All you need to do is take a look at the appraisal sections on the forums and you’ll see how vast the differences are between some of the values quoted.
Still, I think with a bit of experience and some research, used in conjunction with the appraisals you receive on the forums you can get a pretty good idea what the reseller value of your name is. But as far as I’m aware there isn’t any formula or service that can appraise or give any indication what an end user would be willing to pay for a domain. So don’t fork out for any of these paid appraisal services you see the Sedo’s, Afternics and GoDaddy’s offering you.
At the end of the day a domain is worth whatever anyone is willing to pay for it.
What I believe is more important than the appraisal is how you negotiate when approached by an interested party. If you paid $500 for the domain are you happy to sell it for $2000? Sure you may feel it’s a $5000 name, but how many offers have you received over the last year and were any of them in this ballpark?
Before you get back to the interested party, be sure to do some research. See what’s happening in the industry the name relates to. Look to see if there are there similar sales on Namebio or DNjournal.
Your research alone will tell you what the name is worth.
So next time you’re thinking about getting that appraisal. Don’t, do a bit of research, ask on the forums and I’m sure you’ll get a much more accurate idea of what your name is worth.
Now everything I’ve said above can be taken with a pinch of salt when a whale comes along and offers you $$$,$$$ for your name. But that’s as likely as winning the lottery. So try and be scientific and if you apply this to your buying and selling I’m sure you’ll come out at the end of the game with a nice stack of cash to make your next purchase.
James
I normally base my pricings on previous sales of similar domains, it’s a personal appraisal i do for my domains. I also talk to the brokers where i list my domains, and ask for their opinion.
Appraisals are instruments comprised by people looking to prepare an official looking document to show to their interested buyer with hopes that they can convince them that it is accurate and established by an ‘authoritative’ appraiser. Which any semi-experienced domainer should know does NOT exist. GoDaddy is the ultimate deceiver in this department… They give you a ‘free’ express appraisal, that they say is machine generated based on blah blah metrics.. and if you want a human appraisal they will give you the 1st one free and then… Anyway, all a scam. There is no way to appraise a domain name’s potential total value. There is a cycle though:
A. hand reg - $7
B. wholesale - $100
C. flip - $200
D. retail - gets gray here.. but typically $500-999
E. portfolio thinning (aged) - $500-$2500
F. generic with a pulse - $3k-$200k
F. end user desire - sky’s the limit…
It’s all opinion and entirely subjective… but I agree with Helder’s comment. Prior sales of similar domains are often times all it takes. Focus on presentation, and magic is possible.
Thanks for the post, enjoyed it.
Hi Guys,
Thanks for your comments. As you say Jamie, it’s all about presentation and how you approach the potential buyers.