Parsing secondary market sales data?
Hey there,
I agree -- the lack of transparency regarding domain sales in the secondary market makes valuation and negotiation tricky. That's why so many of those offering appraisal refuse to disclose their methodology for valuation -- more often than not, the emperor has no clothes.
There is some excellent information on secondary sales of domain names and value over at DomainsBot Labs (my client) at http://www.domainsbot.com/labs/stats.aspx. "Domain Stats" features studies on how things like length, number of keywords, and parts of speech affect domain name values in the secondary market. "Word trends" shows how many domains with certain keywords in them have been registered over a period of time, which can show that terms in your domain are gaining popularity (for example, if you were trying to sell a domain with the term "podcasting" in it). The word cloud is also cool *and* useful -- shows you a cloud of words most often used in existing domain names in conjunction with whatever term you type in. For example, if you type in "blog," you see a cloud of words most often used in registered domains that have the word "blog" in them.
The DomainsBot tools, in conjunction with other information, can help you give yourself a self-appraisal of your domains. Here's a way to do a very quick appraisal.
First, write down what you *think* the domain is worth, what you would ask for if someone asked you right now for your asking price. Of course, you're making this number up in a vaccuum since market value is always what the market is willing to bear, right? But this exercise will help you hone in on that market value.
If the domain is active, and if it is being used in a PPC program, look at how much it is making now while also taking into consideration how much effort you've put into the domain. For example:
1. Keyword use on the site
2. Search engine rankings
3. Length of registration (Google and others still consider longer registration lengths more "legitimate" when tabulating rankings)
4. Optimization of the PPC page. Do you use the template that your PPC provider offers, or have you added your own content?
If you've done none or little of the above but you still have some traffic, you can say, "Hey, look at the traffic I'm getting for doing nothing!" In essence, you are offering a fixer-upper domain and you can extrapolate about what those embellishments would add to the value. If you have done some work, you can use that as solid evidence as to the worth of the domain.
Then look what kind of domain it is. . . (here's where the DomainsBot stats come in handy)
1. Extension -- .com, .net, etc.
2. Hyphens or numbers -- these are often considered to diminish the value of a domain
3. Length of the domain and keyword popularity
Be prepared to offer your buyer as much evidence as you can as to the value of your domain. Some buyers won't know what half of it means, and some will not care because they will have already made up their minds as to what they think of the value. Throwing out such info won't be appropriate for most small sales, but once you do it for one domain, it's fast to do, and you will have a clearer idea of the market value of your domains.
I hope this helps! Good luck!
rebecca
http://www.domainsbot.com
Hey there,
I agree -- the lack of transparency regarding domain sales in the secondary market makes valuation and negotiation tricky. That's why so many of those offering appraisal refuse to disclose their methodology for valuation -- more often than not, the emperor has no clothes.
There is some excellent information on secondary sales of domain names and value over at DomainsBot Labs (my client) at http://www.domainsbot.com/labs/stats.aspx. "Domain Stats" features studies on how things like length, number of keywords, and parts of speech affect domain name values in the secondary market. "Word trends" shows how many domains with certain keywords in them have been registered over a period of time, which can show that terms in your domain are gaining popularity (for example, if you were trying to sell a domain with the term "podcasting" in it). The word cloud is also cool *and* useful -- shows you a cloud of words most often used in existing domain names in conjunction with whatever term you type in. For example, if you type in "blog," you see a cloud of words most often used in registered domains that have the word "blog" in them.
The DomainsBot tools, in conjunction with other information, can help you give yourself a self-appraisal of your domains. Here's a way to do a very quick appraisal.
First, write down what you *think* the domain is worth, what you would ask for if someone asked you right now for your asking price. Of course, you're making this number up in a vaccuum since market value is always what the market is willing to bear, right? But this exercise will help you hone in on that market value.
If the domain is active, and if it is being used in a PPC program, look at how much it is making now while also taking into consideration how much effort you've put into the domain. For example:
1. Keyword use on the site
2. Search engine rankings
3. Length of registration (Google and others still consider longer registration lengths more "legitimate" when tabulating rankings)
4. Optimization of the PPC page. Do you use the template that your PPC provider offers, or have you added your own content?
If you've done none or little of the above but you still have some traffic, you can say, "Hey, look at the traffic I'm getting for doing nothing!" In essence, you are offering a fixer-upper domain and you can extrapolate about what those embellishments would add to the value. If you have done some work, you can use that as solid evidence as to the worth of the domain.
Then look what kind of domain it is. . . (here's where the DomainsBot stats come in handy)
1. Extension -- .com, .net, etc.
2. Hyphens or numbers -- these are often considered to diminish the value of a domain
3. Length of the domain and keyword popularity
Be prepared to offer your buyer as much evidence as you can as to the value of your domain. Some buyers won't know what half of it means, and some will not care because they will have already made up their minds as to what they think of the value. Throwing out such info won't be appropriate for most small sales, but once you do it for one domain, it's fast to do, and you will have a clearer idea of the market value of your domains.
I hope this helps! Good luck!
rebecca
http://www.domainsbot.com
