How to appraise the value of a website domain name

Websites and domain names are similar to real estate.  From time to time, they get sold, get rented, and are abandoned.  If you are seeking to buy or sell an existing website or domain name then you should have some sort of third party evaluation tools to help determine the market value or worth of a website.

Website Statistics

When I am in the market to purchase a website or domain name, I am mostly interested in statistics.  The statistics that I am interested in depend on my purpose for buying a particular website.  I may have several purposes in mind:

  • Domain name appeal
  • Existing web traffic to a particular website
  • Credibility and inbound links to a URL
  • Content on a particular website
  • Members, subscribers, or clients of a website
  • Web applications or functionality of a website

Assuming that you are seeking traffic and credibility associated with a particular website, I would look for the following type of data:

  • Age of domain name – how long has it been around?  The longer, the better.
  • What is the Alexa traffic ranking?  The lower number, the better.
  • How many inbound links to the site does Google recognize?  More is better.
  • How many inbound links to the site does Yahoo recognize?  More is better.
  • How many pages of content has Google indexed?  More is better.

If I am looking for site functionality, web applications, tools, or some other development or content that currently exists on the site.  My basic formula is:

  • What are the features, functionality, and content on the site
  • How much would it cost me to replicate this website
  • How long would it take to replicate the site
  • Pay less for the site than the cost to replicate it
  • … unless time is urgent and I need the site now, then pay more

The Value of an Existing Website

In 2010, inQbation purchased several domain names and websites for the following reasons and, as a result, we have gained the following benefits:

  • SEOQ.COM was a 4 letter domain name
  • SEOQ.COM contains one of my important keywords “SEO”
  • SEOQ.COM had been around for about 10 or 15 years
  • has a fully developed real-time web analytics solution
  • had several inbound links from high PR websites
  • has WordPress plug-ins already built
  • has other valuable tools and features already built
  • had some great web traffic ranking tool functionality
  • had some significant content already developed
  • had some nice inbound links already established
  • ranked 2nd-3rd place for my important keywords
  • had many inbound links already developed
  • had good, highly technical SEO tools built
  • All these acquisitions generate over 150,000 unique visitors per month
  • Traffic to SEOQ.COM continues to grow at the rate of 100% per month

Sometimes, you can get away with buying an entire website for as little as $500.  Other times it may cost you $50,000.  A domain name alone, without any content, could cost anywhere between $50 and $5,000,000.  It’s difficult to put a price on the average acquisition because there is no publicly accessible data.

Probably the most important thing to remember when buying or selling a domain name or website is to treat it as an investment.  Don’t get overly emotional or attached to the domain name.  Make a rational business decision.  Don’t offend or disrespect the person on the other end of the negotiating table.  Make sure that you are negotiating with a ready, willing, and able buyer or seller. Don’t waste your time trying to negotiate with somebody who is not ready, willing, and able – otherwise, you won’t get the right price.

Best of luck.

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