Comparing Domain Sales Value

Published on:
Comparing Domain Sales Value

If you’re interested in investing in domain names, understanding how to compare domains and their sales values is a critical skill. 

By looking at recent sales of similar domain names, you can estimate the market value range for the domain you want to buy or sell.

Just like in real estate, where you compare similar properties to gauge the market value of a house, domain price comparison will help you understand what your domain could potentially be worth. 

What Are Comparable Domain Sales?

A comparable sale, or ‘comp for short, is a domain name that was recently sold, and that is similar in characteristics to the domain name you’re looking to value.

Comps are used to gauge the current market value range for a given domain name. If similar domains have recently sold for prices in a certain range, that gives you an indication of what your domain may be worth.

For example, if you’re trying to determine the value of InvestingTips.com, you would search for recent sales of similar domain names like:

  • InvestingAdvice.com
  • StockInvestingTips.com
  • FinanceTips.net
  • MoneySavingAdvice.com

If these types of domains tend to sell between $2,000 to $5,000, then you could deduce that InvestingTips.com may be worth approximately $3,000 based on the market.

Finding Good Comps for Your Domain

Finding quality comparable sales data is the first step in accurately valuing a domain name. 

Here are some tips:

Use Comp Sales Tools

The best databases for recent domain sales data are NameBio and DNPrices. Between these two sites, you can find price histories and sales details on most domains.

Sort by Price

When searching on these sites, make sure to sort by price. For buying domains, sort low to high to see wholesale investor pricing. 

For selling, sort high to low to see retail end user pricing.

Check the Sale Venue

Pay attention to where the sale took place. 

Sales at venues like Sedo and Afternic are more likely to be retail pricing while venues like NameJet and Flippa typically have more wholesale investor sales.

Find Closely Matching Keywords

Look for domains containing the same primary keyword, or keywords as your target domain. 

InvestingTips.com comparable domains would ideally also contain the terms  ‘investing tips’ or synonyms like ‘stock market advice’.

Similar Length and Extension

Comps should be similar in length and use the same top-level domain (TLD) extension. 

So, if you’re looking to buy or sell a .com, then the comparable domain should also have the extension .com. 

The length of the domain will also affect the valuation of comparable domains. Short one-word .coms will have different values than longer domains.

Recent Sales Only

Try to find comps that sold within the last 6-12 months. The market changes over time so domains which have been sold more than a year ago are less relevant.

In most cases the value of the domain would have increased with time, especially if the keyword is evergreen, or has been trending upwards in popularity. You can check Keyword trends on Google Trends.  

Key Factors in Comparing Domain Values

Once you’ve gathered a list of recent sales for comparable domains, how do you determine what your domain name might be worth?

Here are some key factors you should analyze.

Relevance of the Comps

How closely does the competitors’ domain match yours in terms of keywords, domain length, extension (TLD), and other domain name characteristics

The more similarities, the more relevant the comp.

Recency of the Sale

When did the sale take place? 

More recent sales will reflect the current market better than older ones. As mentioned it’s best to look for comps within the past 6-12 months.

If you can’t find any then go ahead and increase the time length, however take note of the popularity of the niche or keyword that your domain is targeting. 

Is it growing in popularity since the last comparable sale, or is it less popular. If it’s growing or stable then you should take this into account and increase the comparable value.

Retail vs Wholesale Pricing

One of the most critical distinctions you need to make is whether the comp sale was at a retail end-user price or a wholesale investor price. 

Retail End-User Price

When a domain is sold at a retail end-user price, it’s typically being purchased by a business or individual who plans to use the domain for their website. 

These buyers are willing to pay a premium because the domain name often aligns closely with their brand, product, or service. 

In these cases, the domain name is an integral part of their branding and marketing strategy, and therefore they are willing to pay more for this benefit.

Retail sales often occur on platforms geared towards end-users, like specialized domain marketplaces or through private brokers.

Some of the most popular specialized domain marketplaces are Sedo, Afternic, Flippa, and Dan.com.

On the other hand domain brokers, known for retail selling are MarkMonitor, MediaOptions and Grit Brokerage.

Wholesale Investor Price

On the other hand, a wholesale investor price is what one domain investor might pay another. 

These transactions are often quicker, involve less emotional attachment, and are generally priced lower. 

Domain investors are looking for a good deal and often buy domains in bulk or with the intent of flipping them for a profit.

Wholesale domain transactions often happen in investor-focused forums or at domain auctions.

NamePros, DNForum and Domainstate are some of the most popular forums with domain investors. 

On the other hand, the most popular domain auctions are GoDaddy Auctions, SnapNames, Dynadot Auctions and Sedo Auctions.

Domain Characteristics

Does your domain have better characteristics than the comp? 

We have gone through the characteristics that make a domain name more valuable in this guide, so we won’t go into too much detail here.

However if your domain has a shorter length, is a brandable word, or an exact match keywords, you may justify a higher valuation.

Outlier Sales

Is the comp an unusually high or low sale compared to other recent comps? 

If so, it may be an outlier which skews the average valuation. In this case try and take an average of other comparable domain sales and leave this one out of your equation.

By carefully analyzing these factors, you can determine how your domain compares to the recent sales and whether you should adjust the valuation up or down accordingly.

Adjusting Values Based on Comp Differences

No two domain names are exactly alike, so you’ll need to account for differences between your domain and the comparable sales.

If your domain name has superior characteristics, you may reasonably adjust the value higher than the comps.

For example, if the comps were longer domains like ‘InvestingStrategiesTips.com’ selling for $3,000 on average, then, the shorter, more brandable ‘InvestingTips.com’ would justify a higher price. 

You might project a value of $4,000-$5,000 for it based on having a better name.

On the flip side, if the comps have superior characteristics, you may need to adjust your expectations lower.

You should also take into account the extension, or TLD as this plays a significant role in the valuation of a domain.

If your domain is HomeCleaningTips.net while the comparable domains had .com extensions,  like for example ‘HouseCleaningTips.com’. Then if the latter was sold for $2,500, your .net would likely sell for much less, maybe in the $500 range.

There are no fixed formulas for these adjustments. It takes experience to develop a feel for reasonable valuation amounts on domain names. 

Keep in mind the factors mentioned above to account for differences in a reasoned and methodical way.

Determining Valuation Ranges

So, you have identified quality comps and made logical adjustments, but how do you arrive at a valuation range for your domain?

Here are tips on translating comparable sales into dollar estimates.

  • Take the average sale price of all the relevant comps. This becomes the starting point for your valuation.
  • Make logical upward or downward adjustments based on how your domain differs from the comps. This establishes your estimated value range.
  • Be conservative. Don’t rely on one outlier sale substantially above the average to project huge value unless you have market data showing demand.
  • Ignore also any outlier sales which are valued much lower than the average. These can skew the numbers downward.
  • Consider the highest and best use of your domain name in determining potential value.
  • Weigh the importance of various characteristics. So, for example, extensions (.com vs .net) often make a bigger difference in valuation than the length of the domain name.
  • In the early stages of your estimate calculations, consider the valuation in ranges or orders of magnitude ($1K, $10K, $100K etc) rather than specific dollar amounts.

The end result should be a reasonable valuation range that reflects both the market comps and the unique attributes of your domain asset.

Name Ninja, a domain name brokerage company led by Bill Sweetman, created a useful infographic on domain name pricing. This visual guide will help you understand the approximate value ranges for various kinds of domain names.

infographic showing the domain appraisal estimates for different characteristics of domain names

Building Your Domain Valuation Instincts

Comparing domain sales and valuing names involves some subjective judgment calls. The more experience you gain, the more your valuation instincts will develop.

To improve your skills its best to study past sales and practice evaluating actual sold domains. Here are some tips to get yourself trained in the art of valuing domains.

  1. Review lots of sales data and expose yourself to as many comps as possible across different niches.
  1. Backtest your projections. Go back and see how accurate your valuations were compared to actual sales prices. Learn from your mistakes and keep practicing.
  1. Join investor forums and ask questions. Try to get insights from successful investors and have discussions to gain new insights.
  1. If you already managed to sell a few domains, then go back and analyze your own sales. What factors made your domains sell for more or less than expected? Apply these learnings for future sales opportunities.
  1. Don’t look at the domain value just from your perspective. Consider both sides. Think like both a buyer and seller when assessing value ranges.
  1. As your experience grows, have confidence in your initial reactions before over-analyzing. In other words. Trust your gut.

Valuation instincts develop gradually over years. So, be patient and keep practicing to  refine your valuation process. It’s also important to recognize the ‘intangible’ aspects of a domain that data can’t always capture. 

Putting the Process Together

Now that you understand all the pieces of the comp valuation process, let’s walk through an example from start to finish.

Say you buy the expired domain ‘InvestingTips.net’ for $690 at auction. This domain name used to host a blog about investing strategies and advice.

You think it could be a great domain for a financial media site, but you need to determine a reasonable ask or offer price.

Here’s how you’d research comps and establish a valuation range:

Step 1: Find recent sales of similar domains. 

You search NameBio and find these comps that sold in the past year:

  • InvestingAdvice.com – $2,500
  • StockTips.net – $1,800
  • FinanceTips.co – $970
  • MoneyLessons.com – $2,100

Step 2. Analyze the comps. 

The comparable domains you found are all applicable and can be taken into consideration. 

They all contain investing/finance/money keywords like yours. 

Sale venues indicate a mix of retail and wholesale pricing.

Step 3. Consider domain characteristics. 

On the one hand, your domain name, ‘InvestingTips.net’  is shorter than some of the other comps. However, on the other hand the .net extension is seen as less valuable than .com.

4. Calculate averages. 

Add all four domain selling prices and divide by 4 to get the average selling price, which in this case is $1,842.

5. Make adjustments. 

Given the .net extension, you adjust your expectations below the average comps. But the fact that you have a short two-word domain name, slightly offsets this. 

So, you decide to increase the value slightly, but still below the average. 

6. Determine range. 

Based on the $1,842 average comp price, you decide to list ‘InvestingTips.net’ for sale at $1,500 or ‘make an offer’. 

This represents a reasonable market value range in the $1K-$2K order of magnitude.

This example illustrates how using recent comps, analyzing details, making adjustments, and trusting your instincts helps arrive at a pricing sweet spot. 

Rinse and repeat the process regularly to value domains confidently.

Find Your Domain starting at $0.99

powered by Namecheap

Conclusion

Comparing recent sales of similar domain names is the cornerstone of accurately valuing your domains. 

While it takes practice to find quality comps and adjust values appropriately, this process gives you a solid market-based foundation for your estimates.

However, comps alone may leave you still wondering about things like:

  • How much traffic does the domain get?
  • What keywords are driving that traffic?
  • How does the traffic metrics impact value?

This is where domain appraisal tools come in handy.

In the next article, we’ll explore automated domain appraisal tools that provide additional data points to complement your comp analysis. 

Things like estimated traffic, backlink profiles, and keyword data can factor into valuing domain names more holistically.

For the full list of knowledge articles head on to our Domains Investment Hub.

AUTHOR

I am a branding and naming consultant with 16 years of experience. I believe in building a strong brand name that identifies your visions and that of your business. A brand identity motivates you and your team to achieve success.