Appraisals - Valuations - Evaluations - Criteria

How much should you pay, how do you value a New Zealand Domain Name?

What's My Domain Name Worth?

What Should a Domain Name cost?

What is a domain name appraisal valuation?

Domain name valuation is a very subjective and often contentious subject amongst domain name owners and investors. Essentially the short answer to "what is a domain name worth" is - "It is worth what someone is prepared to pay for it!" However, that is not at all helpful and there are a number of key factors and criteria that are used by most domain appraisal systems. There are no rules or official industry standards, most commercial domain appraisers are in the more mature Internet markets like the USA and UK. These assessors are typically seasoned domain sellers who know what factors makes a domain more or less valuable than others. Getting a domain name appraisal by a third party can be helpful when determining a listing price for a domain and can be used as leverage during negotiations. This is especially relevant when dealing with .com Domain Names. All assessors usually price the domain to sell at a fair market value, so all estimates should be treated as a range rather than an absolute to make it easier to sell. In New Zealand we are still in a developing market and we estimate 5 or 6 years behind other parts of the world - this is changing rapidly however and we are talking to more and more astute company owners and IT development managers that are putting a lot more emphasis on securing several domain names for their market segment.

21 Factors Used when Evaluating a .nz Domain Name

Evaluating a domain name involves weighing all of the following factors to properly appraise its estimated value.

Domain name extension

The value of any domain name depends on the extension: .co.nz - .net.nz - org.nz - etc. Domain names that end in ".co.nz" are generally the highest valued names since ".co.nz" is the most recognizable and popular name extension in New Zealand. ".co.nz" Domain Names are NZ's non moderated TLD or Top Level Domain and all the others are either 2nd Level or moderated and require an application to use. E.g. .govt.nz - .mil.nz - .cri.nz are all moderated.

Meaning of the domain name

The meaning of the domain name may matter but there are domain names that do not represent anything but are still able to get traffic to it based on its content.

Is the domain name marketable

If the domain name is a popular word or term, it may make the name more marketable to potential buyers, hence making the domain name in demand.

Is the domain name memorable

What good is a domain name that no one can remember? Domain names should be easy to remember like a TLD Home address or phone number.

Number of words in the domain name

Generally desirable domain names contain three or less words. However keyword loaded domain names sometimes have more and still have the potential to get great results. Take UsedCarsForSale.co.nz this is a highly searched phrase.

Google Search volume of individual keywords in the domain name

Getting accurate search information can help determine the domain name value. Are the individual words searched for by you potential customers?

Google Search volume of all keywords in the domain name

Even more powerful than individual word search results are the results for the entire domain name. This is measured by BROAD, PHRASE and EXACT search figures.

Length of domain name

Longer domain names are usually less valuable and harder for domain investors to sell, but there are instances where this is not the case in keywords loaded domains.

Is the domain name brandable

 This appraisal criteria is based on the fact that certain words can easily be branded and be synonymous with a business, making it more value. However, this is not true in every instance. There are cases where some of the oddest words have been branded by businesses.

Is the domain name easy to pronounce

If someone hears the domain and cannot make sense of it, they certainly won't be able to spell it right and won't be able to get to the domain so it is important that good domain names can be easily spoken and heard.

Current related industry condition for domain name

The value of a domain name also depends on demand. Some industry research will be required to properly determine the value of industry-specific words.

Numbers present in domain name

Numbers usually lower the value of a domain name because it becomes too specific and not generic enough for most people to remember.

Hyphens present in domain name

The use of hyphens lowers the value of a domain name because it breaks up the domain and most people will forget to include it.

Is the domain name misspelt

People will always try the correct spelling first. "Clever" misspellings are not people friendly.

Age of domain name

The age of the domain is an indicator of when the domain was in demand. It can also be an indication that has been more than one type of content under that domain that took traffic there. Sometimes traffic still comes to the domain based on the old traffic and links from other website's.

Domain name singular or plural

This small difference may result in different valuations. While both singular and plural domain names can be sold quite easily, it really depends on the intended use.

Amount of traffic domain name receives (Developed Domains)

While it is important and valuable to know how many times this page has been viewed, this number needs to be taken into context. Sometimes a page is viewed many times but people never come back to it because the content was not relevant to what they were looking for. So analysing the value of a domain based on traffic also required a full analysis of the site content.

Comparable sales

Knowing this can help set a starting-off point for determining a value for the domain but it is difficult and you are often not comparing apples to apples.

Fair market value

The bottom line comes down to a realistic estimate of how much a domain is worth based on the set criteria for appraisals. A domain can have many good points but may be in a low demand market segment and therefore can be worth much less. The opposite can also be true; take the Tourism and Travel industry or the Car Rental or Reseller market.

Affiliate potential

Does the domain name have affiliate potential? Take FloristsWellington.co.nz this is a geo domain and also a key search for anyone in Wellington looking to by flowers. So since this is a highly competitive market, the domain name has quite a high value. Also something like Mothers Day Flowers .co.nz has value but no where near as much as it only covers one day! Affiliate potential is a different way to value a domain because it is mostly considered by domain name investors and internet marketers rather than your normal business wanting online exposure.

Directory Potential

Does the domain name have directory potential? Take LearnToFly.co.nz for example, this is a great domain to build a directory of flight schools and Aero clubs and therefore has the potential to charge each of these clubs a listing fee once the site is featured well in Google.