When web site owners hear about some domain names being worth millions of
dollars, it can trigger them to start hunting around for valuation services.
The problem often is that valuations – whether free or paid for; are often
way off the mark. In the case of paid automated appraisal services where you
pay your cash, enter your domain name into a box and a claimed “complex
algorithm” then calculates a value instantly; the estimates are often
This inflated valuation might leave the registrant with a warm and fuzzy
feeling of success and riches; but when they then attempt to sell the name at
the valuation price, disappointment is usually the result.
These exaggerated valuations can also lead people to register more names
(and then get more valuations – both often through the same service) as they
feel that they have struck a gold mine.
Another appraisal scam is the unsolicited one. In this scam, a registrant
is emailed out of the blue by someone claiming to be interested in buying
their domain name; often offering far more than the domain is actually worth.
The catch is the domain owner needs to have an appraisal done by a certain
service, with the excuse being it’s the only valuation service the buyer
Bedazzled by the potential dollars, the domain name owner then happily
parts with anything from $20 – $100 for the sham valuation; which may even
confirm its value.
However, the “buyer” then ceases communication – that’s because
the buyer is actually a representative of the valuation service, or otherwise
affiliated with them and receives payment for each valuation referral.
So how do you get an accurate domain name appraisal?
The first tip is to be very wary of automated services – this is a case
where humans do it better. Something you can do is to list the domain name on
popular relevant auction sites at a reserve price far higher than it would be
worth. The highest bids should give you some sort of indication as to market
value – and you may even decide you wish to offer to the highest bidder.
If you want to hire a service to issue an appraisal; look at the
methodology being used and their history, also search for reviews. Methodology
should consist of dozens of points, such as the length of a name, the keywords
it contains, any existing traffic, search frequency and a myriad of other
Also bear in mind the wisdom of real estate agents when it comes to the
value of a home which can be applied to the domain name sector – “it’s
worth whatever someone is prepared to pay”.
Michael Bloch currently consults for Domain Registration Services, an Australian domain name registrar and website host