A lot of us wish we could travel back in time and buy up domain names like apple.com, hotels.com, google.com, bank.com, and more.
But, even without access to a time machine, there are still ways to make money by selling domain names. Even though 99% of short and valuable domains are already taken, there are still a ton of valuable domain names out there.
Maybe years ago you decided to purchase a random domain name on a whim, only to find out years later that your domain, was worth thousands of dollars. This scenario is more common than you might think.
It’s easy to purchase all kinds of domain names, hoping that one day, a brand new startup wants to buy your domain. But, spending hundreds of dollars on random domains and sitting with your fingers crossed isn’t the best or most lucrative approach, but rather find out what goes into a domain appraisal and how to actually make domain flipping profitable.
A better approach is to learn about the factors that make a domain valuable and purchase domain names that have a decent chance of turning a profit down the line.
In this post, you’ll learn the ins and outs of what makes a domain valuable and how to properly appraise a domain so you can answer the question, “What is my domain worth?†with a high level of confidence.
Understanding Domain Name Valuation
Domain valuation is the process of determining the value of a given domain. It’s a similar process to when companies are valued, but much less intensive.
Before we jump into how to do a domain appraisal, let’s have a quick overview of how domain names work. If you already have the basics down, such as how to register a domain, feel free to skip to the next section.
If you’re just getting started building websites online, this section is for you.
Domain names are synonymous with URLs (although they aren’t exactly the same thing), but essentially it’s what a user types into their browser address bar on their search engine to access your site — things like HostGator.com, Facebook.com, Google.com, etc.
There are two primary parts that make up a domain, the second level domain and the top level domain. These two factors will also contribute to a domain valuation,, but more on this below.
Here’s how top-level and second-level domains work together:
- Top-level domain. Even though it’s called top-level, this portion of the domain name is what comes at the end. It can also be referred to as a domain name extension. This is the .com, .org, .net portion of a domain name.
- Second-level domain. This portion of the domain name is the central portion of a domain and often refers to the name of the website, in “hostgator.com,” “hostgator” is the second-level domain and also the name of the company.
If you want to actually sell a domain you’ll need to own one first. To do this you’ll need to head over to a domain name registrar and buy a domain. Usually, you’ll have to renew your ownership of a domain on a yearly basis, but you can also buy a domain for multiple years as well.
Whether you’re purchasing a domain name for a new project, or simply to hold onto and sell one day, the process remains the same.
Here’s how you do it:
1. Go to a Domain Name Registrar
There are dozens of different domain name registrars out there, including one right here at HostGator, which we will be using for our example.
First, head over to HostGator.com, and input the domain name you’d like to register.
2. Search for Your Domain Name
The domain registration tool will then search through every single registered domain name to see if it’s available. Unless you spent some serious time researching your domain name, there’s a good chance it’ll already be taken.
However, you can input different combinations of words and try different top-level domains until you find an available domain.
3. Choose Your Terms and Register
Once you’ve found a domain name that you like and that’s available, all you have to do is choose your purchase terms and register the domain. If you’re planning on holding onto the domain for a while it can be helpful to register the domain for multiple years at once, so you don’t accidentally let the domain lapse.
Once you’ve registered a domain, you can either:
- Leave it alone, if you’re planning on selling it one day, or reserving it for a future website project of your own
- Forward it to your host by changing the nameservers. (If you registered your domain name at the same time you purchased your hosting, you won’t need to take any additional steps here.)
What Factors Make a Domain Name Valuable?
Knowing whether you have a valuable domain on your hands doesn’t require a ton of work, but it does require that you understand the factors that lead to a domain being valuable.
Often, the value that a domain holds will be determined by how desirable the domain name is. The list of factors below can help to illuminate whether or not your domain is valuable, but it’s not a science or always right.
There’s always the chance that your strange and unique domain could align with a phrase from another country, or be the ideal name for a new startup.
Overall, the conditions below will be a good indicator of how valuable a domain actually is.
1. The Associated Top-Level Domain
Having a domain name with a trustworthy top-level domain (TLD) will go a long way towards making a domain name desirable. For example, the domain “getmail.com” will have much more value than the domain “getmail.xyz.” Typically, more standard and popular TLDs will always be a better bet.
Some of the most popular TLDs include .com, .org, .net, and .co. However, other combinations could hold value, providing they make sense. For instance, the domain “get.mail” could be valuable to some businesses.
2. Any Keywords Present
If your domain name has a popular keyword in it, this could also help to improve its value. For example, “bookflights.com” would be a valuable domain for the travel industry. Exact match domain names don’t hold as much value as they used to, but having the right keywords in a domain can increase how desirable your domain name is.
3. The Length of the Domain
Generally, the shorter a domain name, the more valuable it will be. Now, this won’t always be true. For example, the domain “r4dxf3.com” won’t be very valuable. But, taken as a whole, domains with few words or short phrases will hold more value. Shorter domains are much easier to remember and more straightforward to market overall. You can easily build a business around a shorter domain, while it may be more difficult with a longer domain.
4. The Overall Brandability of the Domain
The brandability of a domain can be hard to define. But, it’s still a significant factor when people are choosing a domain name. Essentially, good brand names are memorable, unique, and catchy. Think of brands and domains like instagram.com, twitter.com, grammarly.com.
5. Existing Site and Traffic
If you’re selling a domain name and the site is already getting traffic, or has an existing backlink profile, then you can typically get much more for the domain.
An interested buyer could be purchasing the domain for the name and the SEO power alone. They could be interested in taking over your website. Or, they could be using it for the sheer SEO power alone and forwarding your domain to their existing site.
Older domains also tend to be more valuable than a brand new domain. So, if you have an old domain, even if you haven’t done anything with the domain, it can still be more valuable than a domain you registered a few months ago.
How to Determine What Your Domain is Worth
If your domain currently satisfies a bunch of the requirements in the above section, then you might have a valuable domain on your hands.
Below we’ll walk you through some practical steps on how you can determine the value of your domain name.
1. Get a Valuation of Similar Domains
A good place to start with domain name valuation is getting an idea of the current landscape of domain name sales.
There are a few different sites you can look through which will give you a general idea of what kind of domains have currently sold, and for how much.
Some popular sites include ShortNames, Domain Name Wire, and Sedo.
Here’s a quick look at some of the recent domains that have sold from the Domain Name Wire archives:
This will give you a general understanding of the types of domains that are sold, the domains that bring in the most money, and more valuable information that you can compare to your current domain to see how you stack up.
2. Use a Domain Estimation Tool
There are a variety of estimation tools out there that’ll give you an accurate idea of what your domain is worth. These tools do a lot of the difficult estimation work for you. In general, what they do is compare your domain to similar domains and estimate the value based upon what other domains have sold for.
The most widely used domain name estimator is EstiBot. Just enter your domain name into the tool and you’ll get an accurate report of how much your domain name is worth.
Beyond the general valuation, these reports will give you all kinds of valuable data like the value of other related domains that just sold, along with search volume, keywords, and more.
3. Consider Selling Your Domain
You can get a lot of useful information from the tools above. But, if you want some practical information on how much your domain is worth, then consider listing your domain for sale.
Even if you aren’t ready to sell your domain, you can create a high enough reserve price, where if someone does buy it you’ll be happy.
For example, you can create a domain listing on Flippa. Enter all the relevant details about your domain, and set a high reserve price. The higher the reserve price, the less likely people will buy your domain.
Your goal here is to get actual bids from real people to see what they’ll pay for it. Who knows, someone might even purchase your domain for the super high reserve price!
How Much Is Your Domain Worth?
Hopefully, you have a better idea of the different factors that make a domain name valuable, along with how you can determine the value of your own domain.
By using the tips and tools highlighted in this post, you should be able to pretty accurately determine how much you can sell your domain for.
You can also use the guidelines above to help you when you’re considering purchasing new domains. As a business buying and selling domains can be tough, but buying domains for your personal projects that check the boxes above can help to improve the sale price down the road.
Here’s a quick recap of the biggest factors that influence domain name price:
- The popularity of the top-level domain you use
- The keywords present in the domain name
- The brandability of the domain name (i.e. does it make sense as a company name?)
- The length of the domain name (shorter is better, commonly-used phrases or words are even better)
- If there’s any existing traffic or backlinks to the domain name
Knowing what your domain name is worth can help you decide whether it’s time to sell your domain for a quick influx of cash, or purchase a brand new domain you just came across.
Remember, if you want to quickly and easily register a new domain name, you can do so right here at HostGator.
Kevin Wood writes about technology and human potential. You can find him at his virtual homes Wooden Writing and Counter Culturist.