iDomain Appraisals .com
Our Domain Name Appraisal Model There are many factors that determine the value of a Domain Name as an asset. The most valuable domain names are developed properties owned by major corporations that have spent great sums to brand an identity on the Internet. The values of these names are directly tied to the value of the company. Such companies are usually public companies so the market and investors determine the current value of such developed domain names. The primary goal of our domain name appraisals is that we attempt to determine a value for a domain name based upon potential commercial development of a premium or desirable name for a commercial use. If the domain name has been developed it may have established traffic that can add value to a domain name. If a domain name is attached to a product or service that is actually making sales on the Net, then that can add value as well. The vast majority of appraisals for domain names however, involve undeveloped domains owned by speculators. We view such names in a tier system that we have developed based upon our many years of operating many web sites (now over 300 developed sites) and the business experience of the executives of our company. Who are we? The CEO of our company started out in the late 1970's in the Real Estate Industry. He was the top sales person in a major market for the largest brokerage company in his market. His business career has included owning a real estate investment company, a leasing company, software companies, a publishing company and an assortment of Internet companies. Our appraisals use a nine level tier system in determining value of any undeveloped domain name. Within each tier are three further levels of values. The first level within a tier is what we call the Hi-Retail value. This is our estimate of the highest value that the domain name could sell for to an end user. The second level within a tier is what we call the Lo-Retail value. This is approximately 50% of the Hi-Retail value. It can be higher or lower, but 50% is an average. The third level within a tier is what we call the Wholesale value. This value is usually 5 to 20% of the Hi-Retail value. This value is our estimate of what a domain name investor may be willing to invest in a domain name. The values we use in our Nine Tier Appraisal Method are as follows. (Values use US Dollars) Tier 1 - 10 Million - Hi Retail
So when we appraise a domain name as a third tier domain name, the actual valuation would look like this. 1M - Hi-Retail
Hi-Retail represents what we feel is 100% of the maximum sales amount that an end user may be willing to pay for such a premium domain name. Lo-Retail is usually 40% to 60% of the Hi-Retail value we have appraised it at. Factors such as the strenght of the industry in which the end user does business in, recent buying patterns in that industry, etc. all determines this amount. Wholesale can range from 5% to 20% of the Hi-Retail value. This reflects what we feel a potential domain name investor may be willing to invest in any speculation on such a name. While no undeveloped domain names have sold at a revealed public price at the 10 Million Dollar level yet, we feel that there are approximately 36 or so key words for major industries that warrant such a high valuation. This number (10 Million) could actually soon be shattered when and if the owners of many of these names ever sell them to major multi-billion dollar companies that would pay such high amounts for several key words that are perfect for several major industries. While some people like to use prices from the infancy of domain name selling of major key words like auto.com and computer.com at the start of the commercial internet period, these low prices that these major domain names sold for reflect a period when corporate America did not fully understand how vital the Internet would become to business around the world. Several may cite the values that were paid for domain names at the height of the Internet domain name buying period as all any domain name can be worth, or that the domain name market has crashed. This is very true for the vast majority of domain names that are not key words for MAJOR INDUSTRIES. Business.com is a perfect example. It was sold for the highest PUBLICLY revealed amount so far, that being 7.5 Million. However, this is not one of the key industry words that we believe belong in the first tier of our valuation model. If any key word for any major industry (an industry where you have several multi-billion dollar companies) were to come to market the pure UNDEVELOPED values of such names could easily reach 10 Million. Examples are Casino.com, Air.com, Travel.com, Insurance.com, Cars.com, Autos.com, Bank.com, Loans.com, etc. The second tier are key words for major industries where the companies who could use such a key word are not as valuable as the mega-companies that are in the main industries in the world. The third tier are key words for big industries. Tier one key words with an i or an e or perhaps even the number 1 are also in this group. However, the number of i, e and 1 names in this tier are proportional to the few that are in tier one. There are many key words in the third tier. Most however, do no have an e, i or 1 in the name. The key words from tier one with a .net extension are also in the third tier. Lower tiers usually reflect a good name for an large industry where there are no multi-billion dollar companies operating. The lower tiers are usually good domains that a small business may pay to have a premium domain name, but these businesses have limited capital to invest in a domain name. Many names are in the lower tiers that professionals may be interested in using to promote their business on the Net. Many professionals and small businesses use traditional marketing such as television, print and radio to promote their businesses. So names in the lower tiers usually have a potential commercial use to an end user. We hope this explanation of our evaluation methods make you better understand our appraisals. The key to the valuation of any domain name is the potential commercial use of a domain name to help promote any business. The larger the potential end user is, as to their own worth, is the only factor that determines what any domain name is worth. If a major company can use a domain name, and it is the best KEY WORD for their industry then a high value is what such major companies will be willing to pay to control the use of that KEY WORD for their industry.
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