This is the second part of a two part article that looks at a variety of techniques that should be used when estimating the value of a domain name.

Part one of this two part article was a basic introduction to the need for effective domain name valuation. Part two below, discusses concepts, tools and resources available to assist in domain name valuation.

In the first part of this article the practical reasons for valuing a domain were explored. Now we come to the heart of the matter - domain valuation tools and techniques.

I have covered the factors that should be considered when valuing a domain name - else where on this blog. These factors include the length of the domain name, the domain name extension (e.g. net, org etc) and the amount of traffic it receives.

Appraisals

Appraisals are frequently criticised within the domaining industry and while appraisals from legitimate companies such as Sedo.co.uk might be worthwhile a great many domainers never need to use them.

There are two types of appraisals………

Paid appraisals, such as from Sedo.co.uk. You can find out what a Sedo appraisal looks like in this post from the highly recommended Self Made Minds blog.

Free appraisals from discussion forums and from appraisal sites. You can find domain name appraisal sections on most domaining forums. For example, there is an appraisal sections here at DomainState and here at the UK domain name discussion forum AcornDomains.

Estibot.com provides free instant appraisals. When I tried it tonight Estibot appraised the domain name of this site - domaining.org.uk - at $180 and valued the site taking traffic into account at $640. 

Valiations based on sales of similar domains

One way of attempting to estimate the value of a domain is to consider sales of similar domains. There are many sites containing sales data. Website DNJournal lists weekly reported domain name sales and ‘year to date’ sales data. Afternic.com lists salse made through their site  and reported UK domain name sales can be found at DomainPrices.co.uk. Namebio.com is another excellent resource.

Discussions on domain name valuationThere are many discussions in forums and blogs on domain name valuation techniques. Here is an interesting thread from NamePros.com discussion forum, from 2005 which covers the topic well, and here is a quite old (2002) but still interesting discussion on domain name valuation, from Webmanster World forum. [The prices quoted are particularly out of date but the general concept is worth looking at.] In this discussion thread from the AcornDomains.co.uk domain name discussion forum a representative from domain name sales website Sedo.com provides a particularly valuable insight into how they go about valuing domains.

Other good stuff

You can check a websites backlinks with a number of sites, including www.backlinkwatch.com, www.backlinkfinder.com and perhaps the best known, www.MarketLeap.com. You can also see a history of all the websites ever built on any domain by entering the domain name into the search box at Internet Archives Wayback Machine. Finally, I’ll conclude with this article from internet entrepreneur Tyler Cruz on the Top 10 Reasons People Overprice Domains.

This is Part 2 of a series on valuing domain names. Part one can be found here. 

Do you have thoughts about valuing domains?  How would you work out how much a domain is worth? What do you think of domain name appraisal services - cool or rip off? Share your thoughts below…………………