How Domain Names Are Priced

How Domain Names Are Priced

Quality domain names are valuable assets. However, this does not mean that the vast majority are out of reach, price-wise, to the average start-up or business owner. Yes, there are ultra-premium domains valued in the five to six figure range. Most quality domains fall in the ballpark of three figures.

At Name Options, we list only domains with true real-world value and potential. We meticulously price such names using varied metrics to ensure fair pricing that is below market value. Here are the criteria we use:

Domain Name Strength

Extension (aka Top-Level) – dot com is the strongest and best recognized extension, followed by country-codes, rest of the legacy extensions (net and org), finally other generic top-level domains. Note that in some countries (i.e. co.uk of UK, ca of Canada, com.au Australia, de of Germany, etc.) both the country-code extension (ccTLD) and dot com are ideal to own in order to protect the brand.

Length – the shorter the domain, the more valuable.

Dictionary words – recognized popular dictionary words also increase value of a domain.

Number of words – domains should not have more than 2 words. The only exceptions are if the industry or market includes more than 1 word on its own or the domain is a catch-phrase/slogan.

Dashes and numbers – presence of either of these will reduce the value of a domain name significantly. These domains can be a great bargain if they contain popular keywords.

Target Market

We also take into consideration the target market potential. This includes criteria such as does the domain name target a global, national, or local market.

Additionally, type of market is also taken into account. The bigger the market, combined with the intrinsic quality of the domain name itself and type of market, will make the domain more valuable. For example, generally speaking, a legal domain that can be used nationally will be more valuable than a legal domain with a city name in it. Also, legal domains will be more valuable than home domains.

Clearly, the quality of the domain itself (i.e. extension, length, number of words, etc.) is the dominating factor, target market does play a role as it will effect potential returns and opportunities.

If you would like to discuss the pricing of any particular domain because you are interested in it and may not be clear on why it is priced in such a way as it is, please feel free to reach out to us at Name Options using the form provided for that domain.

January 15, 2020