how to value a domain?

[findtim]

as you know i don't generally sell domains but i have been approached and i struggle with my limited knowledge to estimate the domains worth.

in this case i have another similar active domain and know its income so i have some base to work from.

so i have priced the domain at $8k which represents 9 months net profit, that is "potential" but its based on the other sites true revenue figures and adjusted adhock by me as a guesstimate but i feel comfortable it is a fair figure.

i'd be interested to know how others come up with a value for a domain?

of course everything has "potential" and its often overused IMO.

do you just pick a number from your head?

tim

 

[snoopy]

Not sure what you mean by 9 months net profit? Whose profit? Where is the figure from? Gut feeling though it probably not a good way of valuing something.

 

[Philip Littlewood]

I know that some organisations try to take a scientific approach and calculate its value using a variety of metrics including:-

Competition
Local Monthly Searches
Average cpc
Estibot

Outside of this Domain Authority is useful to look at

As with everything though, as most Buyers and Sellers have differing valuation methodologies (if they have any), then it is still a rare thing that both Buyer and Seller value a domain the same

 

[neddy]

I know that some organisations try to take a scientific approach and calculate its value using a variety of metrics including:-

Competition
Local Monthly Searches
Average cpc
Estibot

And because of this - particularly the last factor - OMG domains are priced in Zimbabwean dollars (well it seems that way).

 

[findtim]

Not sure what you mean by 9 months net profit? Whose profit? Where is the figure from? Gut feeling though it probably not a good way of valuing something.

the figure comes from a site that is trading goods, so a business not just a domain, so i figure that a break even point for purchasing this domain would be a reasonable 9 months trade net profit based on a currently established business as i would expect the same to happen for this domain if setup the same way.

tim

 

[snoopy]

the figure comes from a site that is trading goods, so a business not just a domain, so i figure that a break even point for purchasing this domain would be a reasonable 9 months trade net profit based on a currently established business as i would expect the same to happen for this domain if setup the same way.

tim

I still don't follow it. If you really know what it would make and you have a similar site how come you aren't using the name?

I think generally though expecting someone to pay 9 months profit that they might make running a business isn't realistic. Mostly that will result in a price that is far too high.

 

[findtim]

its geographically not possible for me to run it. its local product delivering locally.

but the business model has been proven.

but thanks for the feedback, as i said i don't know how to value it.

tim

 

[nt81]

I think generally though expecting someone to pay 9 months profit that they might make running a business isn't realistic. Mostly that will result in a price that is far too high.

Nice generalisation Snoopy. I was going to say "too low" though.

I recently decided to sell a developed site + domain and user-base and went for 2 years turnover as the cost price.

Buyer happily agreed and is now at the 3 year mark and managed to develop it further and has made double what it cost him originally over and above the original sale cost.

Moral of the story is, how much is it worth to the buyer?

Recent domain sales mentioned here have been testament to that.

 

[snoopy]

Nice generalisation Snoopy. I was going to say "too low" though.

I recently decided to sell a developed site + domain and user-base and went for 2 years turnover as the cost price.

Buyer happily agreed and is now at the 3 year mark and managed to develop it further and has made double what it cost him originally over and above the original sale cost.

Moral of the story is, how much is it worth to the buyer?

Recent domain sales mentioned here have been testament to that.

Note with this, Tim is selling a domain without revenue, not a business. Profit is what he estimates someone could make, not what it is actually making.

 

[Data Glasses]

What would you guys value a cc.com.au at? Last night at the get together one person stated they had sold one for $500 Whereas another had purchased one for $60 When asked the value before knowing this info i suggested $99, seemed as good a guess as any

 

[nt81]

Depends on the quality of the letter combo

e.g

AS.com.au
BE.com.au
UP.com.au

are heaps of times better than say

XN.com.au
ZV.com.au
PQ.com.au
UW.com.au

 

[Data Glasses]

Depends on the quality of the letter combo

e.g

AS.com.au
BE.com.au
UP.com.au

are heaps of times better than say

XN.com.au
ZV.com.au
PQ.com.au
UW.com.au

cc means two characters, LL is two letters, so i am saying this in regards to a domain like 3w.com.au , cheers

 

[Chris.C]

Hey Tim,

If it's an operating website and business, have you thought about listing it on Flippa?

Put a healthy reserve on it and see what happens.