Achieving Financial Independence with Domains

Chapter 12: Domain Appraisals

By October 10, 2019 December 25th, 2019 No Comments

Ugh. Appraisals are like a wet cat; you will never be able to get your hands around one and ensure it is going to stay in place. The problem with domain appraisals is that domains are worth more/less to different people for different reasons. There are a few “scientific” approaches people try to apply in order to create appraisals for domains, but they often don’t take well universally. These scientific approaches may look at which letters of the alphabet are used, along with how many syllables, how many “bad letters” (v, w, x, u, j), and how many Google.com results exist. Honestly, this scientific approach is pretty much worthless because it lacks a true person taking a look at the domain. Most of these scientific approaches are done by computers using a small set of logic and are rarely correct.

To be honest, if you show up on the domain boards with a post that says “Sedo.com appraised my domain and it is worth $4000.00,” you may likely be laughed right out of the forum/site. The problem is that you are paying a company to tell you how much your domain is worth. In essence, if they tell you your domain is worthless, you then have little reason to buy another appraisal. See the problem here?

“Your domain SeacoastAirport.com is worth around $40. Would you like to buy another appraisal for $49?” Why would you pay someone to tell you that your domain is worth less than the appraisal?

Your domain appraiser may, more than likely, feel pressured to provide a welcomed figure in order to appease you and keep you coming back for more. However, sooner or later you’re going to realize that just because someone told you that your domain is worth $x,xxx does not mean you could actually sell it for that. As a further complication to being objective, the domain appraiser’s figure may be the fulcrum of your decision as to whether or not to sell the domain.

Educated Domainers know that paid appraisals from companies can be way off (both high and low). Even fellow domain owners are rarely able to accurately predict the selling price or true-worth of a domain. A domain’s value is based purely on individual perception, and value is always relative. Don’t let a lowball appraisal discourage you. If someone thinks your domain is junk, that is ok. I have had domains that I thought were worthless, but I ended up getting bids for hundreds of dollars for them. It shocked me, but at the same time I made money from domains I thought were rubbish. It is 100% true that one man’s junk is another man’s treasure.

I also want to point out that asking for appraisals on forums (or sometimes even at all) is a bad idea. If people look at your name and think it is junk, then they are more than likely going to tell you it’s junk. In this scenario, all you are doing is causing yourself pain because the response is rarely what you think it should be. Some online bloggers relish at the idea of slinging online mud and have idle time to do it. At the end of the day it does not matter what a company or another Domainer thinks, etc., it only matters what YOU think of your domain.

Bradley Epstein, one of my closest Domainer friends, sums it up perfectly with his analysis:

“While there are baseline values for certain classes of domains based on revenue-streams, these values should be seen as price floors rather than as equilibrium, market-clearing values. Because the supply of a given domain is perfectly inelastic, interactions between buyers and sellers are the only true arbiter of a domain’s worth. Appraisals, however well intended, should only serve as guidance, as they cannot ever fully take into account the development potential of a domain under the right circumstances.”

Simply put, you could rely on a computerized method to value your domain, pay for an appraisal, or even try to gauge a domain’s worth based off its revenue, but the value of a pure generic domain cannot be established without taking into account what a person would be willing to pay for it. How much is your domain worth? As much as buyers are willing to pay!

 

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