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Bill Sweetman from NameNinja has released a handy little guide to domain name pricing for startups. While the guide is aimed at businesses starting out, the information around domain name pricing is applicable to anyone who wants to either “upgrade” their online brand or launch a new one.
The guide focusses primarily on .com domain names, but also mentions both ccTLDs, alternative domains and new gTLDs.
As you’d expect the keyword .com names are the ones that fetch the highest prices.
“It’s important for startup founders to have a realistic budget in mind when commencing the naming process and hunt for the matching domain,” says Sweetman. “Startups will save themselves a lot of time and stress if they align their name and domain choices with their budget.”
You can download the entire Startup Domain Name Price Guide Infographic here.
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Valuating and pricing domain names becomes increasingly more complex as the quality of a domain name increases. High quality, industry-defining addresses based on a single word often have few to no meaningful comps, so there is no “formula” or easy guide that can definitively instruct buyers.
2 to 4 word long-tail domain names are more commodity level products with numerous substitutes and equivalents available. I think Sweetman’s guide is more applicable to these types of domains. That he offers a % range of the .com can be helpful, though that range is subject to wide variability based on the particular domain name in question.
Max, totally agree with you on valuing "high quality" domains. Nevertheless, a standard discounted cash flows methodology can be used. However, not sure what you mean by 'formula' and "easy guide." As for your second point, please see my comment below.
1) A domain name is a strategic asset that a business needs to maintain its ability to achieve future desirable outcomes Thus, its acquisition decision falls within the allocation of funds, within the necessary budget, to implement their strategy. It is not a single (and simple) purchasing decision. They need to consider acquisitions of necessary substitute and complementary assets.
2) Your categories have very wide ranges that limit their utility.
3) Your value ranges for one-word and two-word groupings are disjoint. There are a lot of two-word domains that are more valuable than one-word domains.
4) (You can estimate precisely the average discounts from .com of various new suffixes, country and alternative domain names. Thus, you would have more accurate estimates of value).
Good points, Alex - especially #1 and #3. Sometimes the two-word domain provides an important level of specificity like OfficeSupply.com. By "formula" I meant categorically assuming that a non .com domain will always be worth "10%" of the .com (or some similar finite equation/ratio). This is overly simplistic (as a buying guide), and fails to account for the wide range of end user need within robust industries who may need a compelling, high-level internet address. For example, BOA's purchase of Loans.com effectively makes it unattainable. That another "loans" tld is forever restricted to never selling above $300k (10% of .com) cannot be assumed. In regard to your point #4, I would point out that the domain valuation paradigm is also evolving as new tld's come into the marketplace because no one knows what future value will be agreed upon between a new gtld buyer and seller - especially for elite quality domains in which the .com equivalent is already off the market, and the new/alt tld is perceived as a perfect fit. That being said, Sweetman's guide is a step in the right direction. Certainly thought-provoking.
Alex They're not "my" categories or "my" ranges - they're Bill Sweetman's Michele