Anyone wanting to become a domain investor should be educated and experienced in what makes one domain good versus another. You should understand what drives the value up in certain domains and what makes others seemingly worthless. The exact same thing can be said regarding domain end users. Understanding the value of a domain name prior to making an offer to purchase it makes some obvious sense. The term low ball offer exists in this industry mainly because very few buyers are actually educated on the value of these types of domain names prior to making an offer on them.
Educating the buyer on the value of domains is the majority of the process when it comes to selling a domain name. It’s not really about the specific domain. Instead, it’s more about educating the buyer of the value of the domain in general and establishing the demand for it.
The Basics
The most important thing to understand with domain names is that they are one of a kind. Each and every domain name out there is unique. The internet works by use of keywords. These keywords are used by people at services like Google, Yahoo and Bing. You want to buy something online. You know what you want to buy, but aren’t sure where to get it, so you type those keywords into a search engine. The search engine uses your input keywords to deliver relevant results to you in real time.
Classes & Types
Domain names should be split up into a type or class to help establish its value. If a term is generally known or common, it’s better than a fictional or invented term. The more commonly known, the higher the value. The term money is common, well known and recognized by the masses. Best of all, it’s not restrictive. Moolah is a slang term that’s known by some, but not as many people as Money. Money is more naturally recognized, easier to spell and easier to remember. Moolah has alternative spellings (such as Moola) and may be spelled incorrectly like Moohla. With all of this in mind, can you guess which of the two is worth more? It’s obviously Money and not Moolah! In general, we can classify domain names in the following categories:
Demand
Once a domain is split into a type/class, demand needs to be established. There are three main things that can be used to establish demand in regards to a term and its relevant domain name.
First, using a search engine and typing in the specific term in quotes (for example: “money”). Then, establish several comparable terms and do the same search. What you should be looking for is the number of results returned. That number is the indexed results of the search engine and the more popular it is, the higher that number will be. Using a category and sub-category method may also be helpful. For example, Money is a category and Money Transfer is a sub-category.
The second thing you should do is see how many registered domains exist which contain and exactly match the term you are interested in. There is a free service called DotDB.com that can do just this. Type in the exact term (without the extension) and look it up. The higher the exact match results, the higher the broad match results, the higher the demand for that specific term.
After you’ve determined the domain type and demand, you need to establish the need. Not just today, but years from now as well. How important is it to own the best domain name for your brand? Your marketing message? Is your business online only? These are all things to think about!
Conclusion
Although it can be difficult to put a price on something that is one of kind, establishing what kind of demand is present can be the best thing to establish for both domain investors and domain name end-user buyers alike. Owning the best domain name of a term, in the matching .com, is the most powerful way to secure that term as a brand name and be the official source.
