How to price a domain name

I came across a question on Linkedin today that is debated and thought it would be worth sharing one of the answers that was given.

The question (put a little simpler than the original one) was “How do I know the value of a domain?”

There were the standard responses to go and have a look at Sedo or Afternic but here’s the response from Charles Coxhead, VP of NetConcepts which I thought was some great (and honest) advice;

I’m not an expert by any stretch but I have sold some domains (as high as mid four figures) and have had lots of ‘offers’ for various domains over the years. In my experience…

Traditional domainers will value it based on the revenue potential as a parked domain, ie. based on the amount of type in traffic it sees. They’re probably only interested if it is a very high quality generic domain for which there is real search demand, which means there’s probably also some decent type in traffic.

Developers will value it based on their perceived value, ie. highly subjective. It all comes down to the negotiation and knowing what would you be prepared to part with it for. I’ve passed on some sales because I’ve felt the domain would be worth more to me in the longer term.

Keep in mind also that there are lots of scams around where people contact you pretending to be interested and then say that they want you to use a particular domain valuation company to assess the value…the rub being that they run the domain valuation business. Most domain valuation sites are a crock imho.

I’ve always started the discussion off by asking them to make any offer. They’ll typically come back and low ball it, to which you can reply saying it really needs to be in the XXXX range (the high end of what you want for it) before you’d be prepared to part with it, and see what happens then.

If you have a domain name and you’re trying to find out how to price your domain, following the advice above will get you a good step down the path.

In the end, the value of your domain will be quite subjective depending on the party that’s interested in buying it so keep that in mind…