What's My Domain Worth? - Lumis

This is one of the most difficult but common questions in the domain name industry. Every domain carries with it unique characteristics that constitute its value. To begin, we need to understand how and why domain names are purchased/used.

Why Would Somebody Buy My Domain?

It’s important to note that historical values do not necessarily carry over to provide an accurate picture of current value. The reason why domain names have been bought and sold has changed over the years. Practically all our sales in recent years (with the exception of liquid domains) have consisted of brands.

Domain names serve as an extension of a company, it’s digital location. Most companies only ever make a single major domain purchase.This single domain purchase is generally when a company is securing their brand, or their exact-match domain. A brand is what consumers will interact with now and forever.

Why Would Somebody Buy My Domain?

It’s important to ask yourself, Is your domain the best version of what it could be? Most domain names in existence have little or no potential of ever actually selling.

For example, Fun-In-The-Sun.net is a domain I would never expect to see selling. This is largely because more premium alternatives exist. FunInTheSun.com or my personal preference, FITS.com, would be a much better version of this. Now let’s look at this. If you own the hyphenated .net, I’d say with confidence that you would never sell that domain. If you own the de-hyphenated .com I would still say that it may sell but I wouldn’t expect it to be an easy task or that it would go for a large sum. This is because there are likely little or no buyers for it and it’s lengthy. Keep in mind shorter is usually better.

Now let’s say you own FITS.com. This is where it gets interesting. Sure, there’s certainly value to this specific “Fun in The Sun” company. However, that’s not all the value this domain carries. It’s a word, contains 4-letters, and has the .com extension. FITS.com is also what’s referred to as a liquid domain since it has 4 letters/characters. As it just so happens, liquid domains carry with them a minimum market value they sell for. (We’ll save that for another article).

FITS.com has many other potential buyers across multiple industries. This is where you can get a bit creative. Maybe a clothing company will want to use it for a new brand, perhaps a fitness company will want to brand their fitness service as “Fits”, perhaps a medical company will discover a cure for fits with people suffering from neurological disorders. The potential brand usage of this domain is endless.

As FITS.com is a short, premium, domain, it would make sense for a company in any of these areas to consider utilizing it. The desire and vast potential to use this domain as a brand are what is driving its value.

What About a Completely Generic Domain?

I’m glad you asked! Generic domains have astounding marketing potential. Also, keep in mind that since domains are a facet of one’s brand they serve as an extension of marketing. Generic domain names can do a stellar job of instantaneously and consistently promoting a company and their goods or services.

For example, if a company can brand themselves as BobsRunningCompany.com or Running.com. They’re going to choose Running.com any day of the week as it promotes they’re the authority on the subject. You don’t have to explain to people (through costly marketing $’s that you are a great place to buy running shoes or running equipment. Your domain tells it in perpetuity. Now take this example. A potential customer walks into the Google Shopping section of the Google search engine (I’d say a retail store but those are dying) and sees the products of two companies. One is Nike and the other is Running.com.

We know Nike is a colossal fitness company. This is because of the millions of $’s they’ve spent every year for decades to remind us they are THE place to buy running equipment. Running.com made a one-time purchase of a single domain name that they now own forever which solidifies them as an authority on the subject. The generic prowess of Running.com places their brand on par with the likes of industry titans.

Let’s say for a moment that you own Running.com. It’s a single-word, generic, 7-letter, .com. Also look at the alternatives, Run.com, Runs.com, Runner.com, Ran.com, etc. Are they being used? Who owns them? Have they sold before? Is that information public?

I’d say Running.com would have at least a six-figure value because of the industry it represents. To give you an idea, look at other similar sales. Biking.com went for $200k and Wrestling.com went for $500k. I would not be surprised to see Running.com sell in this range.

What if My Domain Is a Common Brand?

Well, you’re in luck! These types of domains are some of my favorites. Domains like BlueStar.com and NorthStar.com represent crowded and popular brand-spaces. The crowding of these brand-spaces and the desire of companies to secure and own the brand-space in which they conduct business within drives value to these domains.

Domains are universal. A company can own all the rights and trademarks of North Star as it relates to airplanes but that doesn’t mean a computer company can’t also name themselves North Star.

Trademarks are also region and country-specific. A trademark in the USA won’t protect a company from another using the same brand for the same product or service in another country. Not to mention, even if you have a trademark overseas, that doesn’t necessarily mean that it will be protected in the same manner as another country.

A domain is essentially absolute. Once you own it, it’s yours forever. I’ll argue it’s one of the best ways to protect and promote your brand in our digital age.

CONCLUSION

There are a wealth of reasons why domains sell for the amounts they do. It takes years of experience and industry knowledge to truly grasp a domain’s value. If you have any questions as to what your domain could be worth Lumis is always happy to help!