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How To Value a Domain

by MakeupArtist
14 replies
Hello--

A friend of mine asked me if I knew how to value a domain. He was offered $5,000 for the domain or trade the domain in exchange for a very attractive ad space that he's confident he could sell for $35,000 a month (it is in Time Square).

Any thoughts on how I can get a fair assessment of what the domain is worth? The issue with the $35,000 sale is, as you can imagine, it takes time to sell that space. I know some of you are going to say it is a no-brainer but this is a guy w/ a lot of businesses and doesn't necessarily want to focus on selling this ad.

I thank you in advance for your insights!
#domain #domain value
  • Profile picture of the author BinaryQwest
    Most people value a domain at the profit it produces for 10-14 months.
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  • Profile picture of the author Steve B
    MU Artist,

    There are lots of places that will "appraise" a domain based upon a set of criteria they feel should be included in the valuation. SEDO is a popular domain appraiser.

    I believe the two most important factors are the income the domain generates and the traffic that is regularly coming to the site. You didn't mention either of these, but I'm assuming that the current domain has neither.

    The bottom line with domain valuation is nearly always this: the domain is only worth what someone else is willing to pay for it. The key, I believe, is to find the right person that values the domain highly and is willing to pay for it based on that assessment.

    There is a big difference between a one time $5,000 price tag and $35,000 per month. Of course, if $35K is realistic, that is the obvious choice. Even if your friend is not interested in working with selling advertising, for $35K per month ($420,000 per year) he could easily outsource all the work, hire a full time ad manager, and still make a very hefty monthly income.

    It really is a no-brainer if the $35K income/month is realistic.

    Steve
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  • Profile picture of the author TheFury
    Originally Posted by MakeupArtist View Post

    Hello--

    A friend of mine asked me if I knew how to value a domain. He was offered $5,000 for the domain or trade the domain in exchange for a very attractive ad space that he's confident he could sell for $35,000 a month (it is in Time Square).

    Any thoughts on how I can get a fair assessment of what the domain is worth? The issue with the $35,000 sale is, as you can imagine, it takes time to sell that space. I know some of you are going to say it is a no-brainer but this is a guy w/ a lot of businesses and doesn't necessarily want to focus on selling this ad.

    I thank you in advance for your insights!
    Huh? Someone is offering you 5k one day or 35k/a month and there's an actual debate on which option to take? What am I missing?
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  • Profile picture of the author Amer A
    Hi MakeupArtist

    The value of a domain depends on many factors. For example, it's age, backlinks, and the ranking.
    You can check domain auctions on Flippa for more info.

    Thanks
    Amer
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    • Profile picture of the author Dennisknows
      Originally Posted by Amer A View Post

      The value of a domain depends on many factors. For example, it's age, backlinks, and the ranking.
      You can check domain auctions on Flippa for more info.
      All this stuff is a factor but like real estate, the biggest factor is how much someone is willing to pay for it. You could get a quote for 20,000 but if a person doesn't see it being worth 20,000 in their eyes, they aren't going to buy it.

      Just something to keep in mind.

      Also, be careful not to fall for the domain appraisal scam. I was sent an email but I'm sure if you aren't careful searching for info online, you could fall for it. They tell you they want to buy your domain for $1000s but before they do, they need you to do an appraisal. The scam is they own the appraisal site. They send you a low ball appraisal after you pay and they're no longer interested at that point because they have your money from the appraisal.

      Not trying to scare you; just something to be mindful of...

      Dennis
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  • Profile picture of the author DubDubDubDot
    This thread can't go anywhere until you name the domain.

    It's all in the name. There is no standard way of valuing a domain.
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  • Profile picture of the author Meharis
    Originally Posted by MakeupArtist View Post

    Hello--

    A friend of mine asked me if I knew how to value a domain. He was offered $5,000 for the domain or trade the domain in exchange for a very attractive ad space that he's confident he could sell for $35,000 a month (it is in Time Square).

    Any thoughts on how I can get a fair assessment of what the domain is worth? The issue with the $35,000 sale is, as you can imagine, it takes time to sell that space. I know some of you are going to say it is a no-brainer but this is a guy w/ a lot of businesses and doesn't necessarily want to focus on selling this ad.

    I thank you in advance for your insights!

    The question is not easy. On top of that you gave no information at all.
    Do you really expect anyone here can give you a realist answer?

    Meharis
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    • Profile picture of the author Karen Blundell
      The person from this forum who knows everything about domain buying and selling is View Profile: Gene Pimentel

      I would maybe private message him and ask his opinion -
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  • Profile picture of the author Jack Gordon
    Wait a minute...

    Something is missing. What exactly is this ad space in times square? Assuming it is legit, is he being offered lifetime ownership of it, to use/resell for life, then pass along to his heirs? Or is it a one-time, one-month deal? Or something in between?

    Those kinds of details matter. If it is a single month, and will take a lot of time to broker, and he has no experience in such matters, he might just be better off grabbing the $5k (or whatever he can end up negotiating) and running with it.

    On to valuing the domain, visit dnjournal.com for a historical record of actual domain sales. Their records go back years, and there is probably no better way to get a sense of what the market will bear for quality domains.

    Without knowing what it is, most advice will have limited usefulness. But it is not hard to get a sense of whether that offer is in the ballpark of reality.

    Feel free to PM it to me if you want an unbiased opinion. I have been a domainer for 15 years, and may be able to give you a gut-check on this.
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  • Profile picture of the author MakeupArtist
    I appreciate the insights everyone! Realize I provided limited information but your answers were all very helpful- the resources you pointed me towards have all helped w/ the due diligence.
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