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Ways to Calculate How Much a Domain Name is Worth

While there are an infinite number of possible domain names, each can only be used by one person or company. You might wonder why some domain names are worth $2.00 and others $2 million. According to Godaddy.com, some of the most expensive domain names publicly reported include: CarInsurance.com for $49.7 million, VacationRentals.com for $35 million and Sex.com for $14 million. Why? Well… It’s complicated!

There are a few reasons you might want to know the value of a domain name.
You could own a domain name and want to sell it. Maybe someone has approached you, and you need to know what’s fair value.

You might decide to invest in promising domain names to resell later at a profit. Each online address can only represent one company, and a limit in supply combined with high demand means profit.

Over the last 25 years or so, virtual assets like domain names have created millionaires and even billionaires. You could want the best possible domain name for your business.

With Real Estate, it’s Location, Location, Location
With Domain Names, it’s Keywords, Keywords, Keywords

A business website needs keywords that bring traffic so the traffic can turn into leads and those leads into sales. How much a domain name is worth depends on how much traffic the keywords might bring to the website. Many variables go into traffic statistics, so you should use professional domain name appraisers like  godaddy.com/domain-value-appraisal, freevaluator.com, or EstiBot.com. They all use similar algorithms that look at:           

The Extension

Extensions are what comes after the dot in any website name.  Something.com is typically more valuable than Something.net. If a searcher isn’t sure if they want something.com or .net, they tend to start with .com. While originally there were only a few extensions available, .com, .net, .org, etc., there are all kinds of niche extensions now from pizza to photography.

Some experts say these industry-specific extensions might make a company look less legitimate, but if you decide to use one, domain names with relevant keywords on both sides of the dot can be worth more.

“Book.Sales” is better than “book.”

Acme, for example. The words book and sales might easily be combined in a Google search. Book and Acme will not be combined in a search window, unless someone is looking specifically for the Acme Book Sales Company. One problem with using these lesser-known extensions is that searchers may add a .com out of habit. They then might get an error message or find someone else’s site.

Comparable Name Value

Looking at domain names similar to the one you are trying to evaluate can give you hints. If you want the value of booksellers.com, for example, look at prices or sale history on names like booksales.com, booksellers.org, booksell.com, booksellers.net, and any other similar names you can think of. There are websites you can use for doing this kind of research.  If you want to sell auto parts, and look up auto parts on buydomains.com, for example, you might see that autopartswholesalers.com is available for $888 and autopartssuppliers.com for $1188.

Length and Simplicity

You advertise your website to drive traffic to it, and since shorter names are easier to remember, autoparts.com will be worth more than autopartsnetwork.com. In addition to being as short as possible, the most effective (and therefore most valuable) names are easy to spell and don’t have dashes.  If people can’t remember how to spell your company’s name or that you have a dash in it, they may not find you.  That’s bad news since traffic means higher value.


Where keywords land within the name also makes a difference to search engines.  A plumber will want the word plumber to be at the beginning of the domain name. For example, plumbersaakron.com could do better than aakroncityplumbers.com.  A keyword in the middle also doesn’t work as well with search engines as it does at the beginning or end.

Keywords and Relatability

Think about the last time you searched for a service or business. Keywords in the domain name help search engines understand your business. The better the engines know what you do, the more often you’ll get found. Website names with commonly used keywords or recognizable brand names cost more.

A good place to investigate keywords in domain names is dotDB.com. You could search under “auto” and find out that there are 1,348,560 websites with that word and 418 extensions. Landscape has 79,118 domains and 216 extensions, whereas Lawn has 95,372 but only 144 extensions. The more domains there are connected to a keyword, the more valuable a website with the keyword is.

Brand names are usually limited to those who have legal permission to use them.  Disney, for example, only has 31,684 domain names, and Tesla only 40,102. That’s not because they aren’t popular, but because they can’t be used without licensing.

To sum up, several things affect a domain name’s value. Consider the keywords people use to search for the business or service. Research how often keywords are used in searches, and how many domain names and extensions there are with the keyword. Shorter, easy to spell and remember website names work better than long complex ones.  The more common extensions like .com or .org are easier for people to remember, too.

Domain names today are the commercial real estate of the internet.  If you own prime real estate or an in-demand domain name, their value will continue to increase.

For more on valuation, see Veristrat, or my YouTube channel

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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