The most popular question I get, by far, is “How can I choose better domain names to buy that will resell at a profit?” Alright, it is not worded exactly like that and usually comes in a variety of flavors. Here are some specific eamples:
“I try and try but I am unable to sell any names, can you help me?”
“Could you look at my portfolio and tell me why I am not able to sell these names?”
“Which industries/trends should I focus on to find names I can sell?”
But if I distill them down to the basics, it really is the question I pose in my very first sentence.
The first step… the key… the foundation of successful domain investing lies in understanding what makes a domain valuable. Let’s explore the key characteristics that contribute to a domain’s value, the metrics used to evaluate potential investments, and the importance of these factors in the domain resale market. By grasping these concepts, you will be better equipped to identify profitable domain names and make informed investment decisions.
Key Characteristics of Valuable Domain Names
1. Length and Simplicity
One of the most crucial factors in determining a domain’s value is its length and simplicity. Shorter domains are generally more valuable because they are easier to remember, type, and share. Simple domains, without complex spellings or multiple words, are preferred for their ease of use and branding potential. But even multiple-word, longtail domain names can be valuable.
- Example: Domains like “cars.com” or “loans.com” are highly valuable due to their brevity and straightforward nature.
- Longtail Example: “CarInsuranceQuotes.com” and “OnlineCasinoBonus.com” are two examples of multi-word domains, longer than typically desired, but of value.
As a general rule, Short vs. Longtail names are likely at opposite ends of the value spectrum. But there is value to be had.
2. Memorability and Brandability
A memorable domain name sticks in the minds of users, making it easier for them to return to the site and recommend it to others. Brandability or Brandable, refers to the domain’s potential to be developed into a strong, recognizable brand. The value in that goes without saying.
- Example: “Google.com” is an invented word that has become synonymous with internet searches, demonstrating the power of a memorable and brandable name.
3. Keyword Relevance
Domains containing relevant keywords are valuable because they can attract organic traffic from search engines. These domains are often sought after by businesses looking to improve their SEO and drive targeted traffic to their sites.
- Example: “BuyShoesOnline.com” is rich in keywords that can help a business rank well for searches related to purchasing shoes online.
4. Extension (TLD) Significance
The extension or Top-Level Domain (TLD) of a domain can significantly impact its value. While “.com” is the most popular and valuable TLD due to its universal recognition, other TLDs like “.net,” “.org,” and country-specific extensions (e.g., “.co.uk,” “.de”) can also hold value, especially within specific niches or regions. Trending TLDs like .io and .ai can also be valuable.
- Example: “business.com” is inherently more valuable than “business.net” due to the prominence and trust associated with the “.com” TLD.
Metrics to Assess Domain Value
Now that we have talked a little bit about Characteristics of valuable domain names, lets look at some of the metrics that can be leveraged to determine value.
1. Search Volume
The search volume of the keywords contained within a domain is a critical metric for assessing its value. High search volume indicates strong interest and potential traffic.
- Tools: Google Keyword Planner, Ahrefs, SEMrush
2. CPC (Cost Per Click)
CPC data provides insight into the commercial value of a domain. High CPC keywords indicate that businesses are willing to pay a premium for traffic, suggesting that the domain could be monetized effectively.
- Tools: Google Keyword Planner, Ahrefs, SEMrush
3. Domain Age
Older domains tend to be more valuable because they may have established backlinks, a history of traffic, and greater trust from search engines. However, the age should be considered alongside other factors, as an old domain with no traffic or backlinks might not be valuable.
- Tools: DomainTools, Wayback Machine
4. Comparable Sales
Examining the sales history of similar domains can provide a benchmark for valuation. This involves looking at past sales data for domains with similar keywords, length, and TLDs.
- Resources: DNJournal, NameBio, GoDaddy Auctions
The Importance of These Factors in Domain Resale
Understanding and analyzing these characteristics and metrics is vital for several reasons:
- Informed Investment Decisions: Knowledge of what makes a domain valuable allows you to make more informed decisions when purchasing domains, ensuring a higher likelihood of profitable resales.
- Negotiation Leverage: When selling domains, being able to articulate the value based on these characteristics and metrics provides leverage in negotiations, potentially leading to higher sale prices.
- Portfolio Optimization: Regularly evaluating your domain portfolio against these criteria helps identify which domains to hold, develop, or sell, optimizing your overall investment strategy.
The ability to discern the value of a domain is a fundamental skill for any domain investor. By focusing on key characteristics like length, simplicity, memorability, brandability, keyword relevance, and TLD significance, and by leveraging metrics such as search volume, CPC, domain age, and comparable sales, you can make strategic investments in domain names with high resale potential. This foundational knowledge will serve as the bedrock for the strategies and techniques I’ll be writing about in upcoming articles.
The next article in this series is on Finding Hand-Registered Domains to resell.
