Domains can be worth $5. Or they can be worth over $1 million dollars.
So how do we know how much our domain is worth?
I use these simple rules to figure out how much our domains are worth:
- Most domains are worth $5, the same amount it takes to register them. If I’m not confident that a domain falls into one of these other categories, I assume it’s only worth $5.
- A two-word .com domain is usually $1,000 to $3,000. Even if it doesn’t have any inherent meaning, a two-word domain that is easy to understand can usually get you over a thousand dollars on its own.
- If I have a quality domain, it’s probably worth $5,000 to $10,000. A quality domain is one that is one or two words, a .com domain, easy to say and spell, doesn’t have any backlinks built up, and some sort of connection to a valuable market. If you can hit several of the quality indicators at the same time, it’s possible to get into this tier.
- $50,000 and above is possible in the right situation. Let’s say you have a quality domain that you’ve been sitting on, a startup uses that same name but with a .io extension, gets traction, and then offers you a handsome sum in order to get the .com domain. Things like this do happen. A quality domain with a ton of backlinks can also be worth this much.
Real Domain Valuations
Domain valuations are determined by what people actually pay. That’s it. We can make rough guesses but we don’t really know until money changes hands.
Instead of guessing, let’s go over some real numbers.
We’ve broken down real amounts that we paid for domains. Down to the last dollar. And how we got each of them.
- hradvice.com = $6,000. Bit of a weird story on this one, a colleague got the domain, built it up, and then decided to get out of it. Just didn’t want to work on it anymore. So we bought it from him directly and purchased it at what he originally paid.
- stonepress.com = $4495. When we decided to form our company, Stone Press, we looked for domains before deciding on a final name. This is a good way to do it so you don’t get forced to pay an absurd rate from a domain squatter. We found this domain on brandbucket.com, decided we liked the name, and went for it.
- growordie.com = $12,500. Bit of a long story but we originally started our company under the name Grow or Die. We don’t operate under that name anymore. In this case, we came up with the name first, then went looking for the domain. We also ended up paying on the higher end. It happened to be for sale via Sedo.
- businessguide.com = $41,280. At one point, we thought about building out a comprehensive B2B site from scratch. We still might do it. Either way, we got excited that the domain was available after typing it in directly in a browser. Went back and forth with the broker on Afternic a few times before settling on a final price.
- speedtoscale.com = $4,315. Also found this one on brandbucket.com . Figured it was a good fit if we ever got serious with an agency or consultancy part of our business.
- courserankings.com = $2,988. Typed it in, saw it was for sale at a great price via buydomains.com, and went for it.
- growthlens.com = $4630. Another good growth oriented name that would work for lots of different projects we might take on. Saw it on brandbucket.com and grabbed it.
- homefavorites.com = $1250. Typed this one into the browser, saw it for sale via Sedo and decided to grab it on the spot. No real plans for this yet.
- bestforhome.com = $1500. Also typed this into a browser, saw it for sale on buydomains.com, and grabbed it.
- onlinebusinessmodels.com = $1695. Typed this one in too, was for sale via hugedomains.com, also grabbed it.
- selfteach.com = $15,500. Went hunting for this one, saw it was for sale via a broker after typing it in. Originally offered $12,500 and ended up a bit higher.
These domain worth examples should give you a rough idea of what to expect with your own domains.
Real Domain Worth Compared to a Valuation Calculator
There are a bunch of “domain worth calculators” out there. In my experience these calculators undervalue domains by 50-80%. Occasionally they get it right but those tend to be exceptions.
But let’s look at some real data.
We took all the real prices we’ve paid for domains (the real valuations) and then compared them to the valuations from the calculators. Here’s how they came out:
To avoid a blood feud, I’ll avoid sharing the exact calculator I used. It’s one of the popular ones.
Across 11 domains, we paid $96,153 in total. The calculator only gave us credit for $11,225 on those same domains. It was off by like 90%.
One of two things is true.
Either domain value calculators are laughably low. OR we’re terrible at buying domains and constantly overpay.
I choose to blame the calculators so I can sleep better at night.
How to Know if Your Domain is Valuable
Regardless of what some fancy AI calculator says, this is how folks in the industry actually value domains.
Get the .com
I know every halfway decent domain was picked clean before the iPhone existed.
But it doesn’t matter.
If you want a valuable domain, get the .com version. It’s the de facto standard and will instantly increase the value. Most other domain types are borderline worthless.
Unless you happen to have the domains of a really valuable brand and they’ve gotten to the stage where they need to pay serious premiums in order to protect every version of their brand name.
The other exception is for international sites. If your site is focused on the Australian market for example, a .au domain will also be valuable. But there’s more nuance. Markets outside the US tend to be a lot smaller, so sites and domains also tend to be worth less overall.
Spelled correctly
Cute and atypical spellings are worth a lot less than the standard spelling. Even if you’re one letter off, the domain is worth a lot less.
However, it doesn’t have to be a real word. Take deliveroo.com as an example. Or google.com for that matter. Both are completely made-up words that have no connection to anything, until each company built a massive brand with those names.
So a completely made-up 1-2 words can still be worth thousands of dollars. But those made-up words need to be spelled like every one assumes they would be. If there’s a quirky spelling, the domain will be worth a lot less.
One or Two Words
Most of the valuable domains tend to have one or two words. Starting at three words, the domain worth falls off a cliff.
Yes, there are exceptions. But it’s a reliable rule.
A good two-word domain can easily be worth $5-10K. But most three-word domains will typically cap out in the $1-5K range. There’s always exceptions, just keep in mind that more words equals a lower value.
The Bar Test
A good rule for any new website or business: can you say the name in a crowded bar and have someone understand it the first time? Or do you have to explain it, spell it out, and repeat it a bunch?
If you can say it just once, you’ve got a great name and domain. If not, it won’t be nearly as effective to build a brand around. Word of mouth will have a lot more friction.
Marketers and entrepreneurs know this. So when they’re starting a new project, they look for generic names that are easy to say and hear. If you happen to have that domain, you could get a few extra thousand dollars.
Google Ads showing for that keyword
Take your domain and google the phrase itself. Do you see any ads in those search results? If you see a bunch of ads, you’re in a valuable search category in Google. And your domain is worth more. If a bunch of companies are spending money, that’s usually a sign that there’s money to be made in that space.
I’ll be honest, this isn’t as important as it used to be. There was an era in SEO where having keywords in a domain carried a lot of weight. You could get your site to rank for valuable keywords a lot faster. Which means you could make money faster and the domain was worth more.
These days, it’s not a game-changer. Someone would still have to do a ton of work to build up a site, become an authority in that category, and slowly work their way up the search rankings. But it does help a bit. So if the words in your domain overlap with valuable keywords, that does increase the worth of your domain.
Get Backlinks
This is the main thing you can control. If you want to increase the worth of your domain, build out the site and get links pointing to it. The more links that you get, the higher the domain rating (the overall trust that Google has in the domain) and the better the domain will do with SEO. That means the domain will be worth more.
There’s a ton of complexity here but that’s the core point: more links = more domain authority = higher worth in your domain.
This is how you take a $3,000 domain and turn it into a $1,000,000 domain. It’s not easy and it takes years of effort but it is possible. And at that point, you’re selling an entire content site, not just the domain itself.
Meaning tied to a potential market
Your domain with be worth a lot more if it has an obvious connection to a valuable market.
An easy example is personal finance. It’s a huge space. There’s tons of money to be made by promoting credit cards, bank accounts, and other stuff.
Well, any domain with the word “money” in it is a great fit for this market. There’s a clear connection and people will instantly understand the brand.
For anyone looking to start a site and business in a category like that, they’ll place a premium on any domain that has a direct connection to their space. That means your domain is worth more.
Tricks to Negotiate The Worth of Your Domain
What if someone reaches out to you to buy a domain? Is there anything that you can do in order to increase it’s worth?
Absolutely, these are the tricks we use.
Research the Other Party
Whether you make $3,000 or $300,000 is almost entirely dependent on who is trying to buy your domain.
Getting $3,000 or $10,000 for a domain is pretty straightforward if your domain ticks all the quality boxes.
But in order to get $50,000, $100,000, or $300,000, you’ll have to know who you’re dealing with.
Making this even more complicated, the other party knows this too!
I can’t name names but at a previous company, we went domain hunting. We were starting a new brand and needed a domain to go with it. The problem is that our company had a really strong brand. Everyone in the space knew who we were. As soon as someone realized who they were dealing with, we knew that they’d instantly raise the price by two or three times.
How did we keep a low profile?
We had a junior employee reach out through a personal email account, hoping other parties wouldn’t dig deep enough to figure out who was actually buying the domain.
It worked. We avoided any instant price jacks by doing this.
This is standard practice in the industry.
As a domain seller, be aware that this is going on. If a random person reaches out to you with a credible offer, really do some digging. Figure out who that person works for.
Get Them to Say a Number First
There’s an old negotiating adage: “if you’re an expert in the space, say the number first. If you’re not, get them to say the number first.”
Why does this work?
If you’re an expert, you already know what’s undervalued or overvalued. Since you know the real range, you can anchor on the end that benefits you, skewing the final offer in your favor. The first number thrown out has a huge impact on where the final offer settles. Better to skew it in your direction since you already know what’s feasible.
If you’re a novice in the space, your biggest negotiation competition is actually yourself. Many of us do this with job offers early in our careers. Or when we set pricing for a new business. We drastically undervalue what we’re doing, set a price that’s way too low, and give away way too much.
Domains fall into the same pattern. For the first few domains you try to sell, you’re most likely to undervalue them. “I got this domain for $5, sat on it for a few years, and now someone wants it for $3,000? That’s absurd!” If you name a number first, you’re likely to pick something that’s drastically less than the actual value of the domain. So get the other party to name their price first.
Even if you’re working with a real pro and they lowball you a bit, the offer will still be better than your initial price.
There are some folks that are more aggressive than this. But if that’s you, you will definitely know it and should discard all of this.
Always Negotiate a Little
Whatever offer you get, there’s going to be some wiggle room. Worst case, you can probably get another 10-20% above their initial offer.
They know you’re going to negotiate so they hold back. They already have more budget in play, you just need to ask for it.
So if they offer $10K out of the gate, counter with $12K. You’ll probably get it.
But be careful here, you can absolutely push things too far. If you counter too aggressively, they might just walk on the spot. Ridiculous counter offers are often a red flag, a sign that the other party isn’t a professional. Or widely over-values their own domain. Trying to get a deal done with folks like that can be a major headache, even if everyone does eventually agree on a final price.
So push, but don’t push too hard. Unless you genuinely don’t care if the other party walks.