Understanding The Appraisal Process Of A Domain Name

Depending on your financial goals, buying a domain can be an investment or business decision. Both these scenarios are common. No matter why you want to buy one, it's an entire cycle that demands due diligence to secure the best deal. Choosing a domain name is lengthy, particularly if you want to start an online business. With this, you have to take many calls from time to time to extract the correct value from this process. For example, you may wonder whether buying a premium domain name is better or an affordable option at this stage makes more sense. 

If you don't have budget constraints, premium domains can be your target. They have a massive demand in the market, and they come with unique benefits for your business. But how do you know something is premium? You can determine their worth through appraisals. Multiple data points will indicate if you are on track or not. So, whether you are an entrepreneur, a well-known entity, or an investor, knowing the value of a domain is crucial. 

• Domain extensions

The top-level domain (TLD) list consists of .com, .io, .net, and many others. You must be aware that .com is the best of all. If you'd like to confirm, you can go back to history. In 2017, someone sold Poker.com for USD$20M. And the same domain name with a .net extension went out for USD$750K, which was again the biggest deal within the .net category, but it doesn't compare to .com in value. 

• SEO weight

The most commonly searched terms combined in the domain name are precious. Driving, poker, and shopping are a few examples. These terms attract millions of monthly searches and high CPC. Another thing that also counts in this context is the backlink history. If multiple domains point back to your selected option, it is worthy of consideration.

Conversely, something with a black hat history can be vulnerable to the Google penalty. Another factor that can be helpful is the domain's age. Of course, a spammy site will hurt, but a clean domain name will help. 

• Domain name evaluation 

You can determine a domain's value in three ways – retail, investor, and liquid pricing. The retail price point is significant for serious buyers who want to own a digital property for a purpose and know everything about URLs. Investors don't know much about domain names but buy them to sell again for a profit. Liquid pricing refers to a portfolio of domain names released by its previous owner due to some situation. Usually, cheaper domain names come at a lower price. Retail options can be pricey, with investor pricing occupying the second position. 

It's a lot of work. Your attention to detail skills can prove immensely helpful in this area. If you plan to buy a high-end domain, be more careful with your money because of the amount involved. Make sure you visit only a trusted marketplace or platform for these purposes. Otherwise, you can lose your money and not get the domain also. On the other hand, a reliable service provider will remove all your stress associated with the buying process.