The Internet’s top domain buyers and sellers have their own secrets for gauging a website’s value, and here’s what they’re not telling you: there is no one secret. In fact, many of the top buyers and sellers online are able to gauge a site’s value not because they’re aware of some spectacular tool, but because they have access to their own experiences and reference points. And they know not to turn to any one tip to gauge a website’s true value.
Here at WebsiteBroker.com, we certainly subscribe to that philosophy – which is why we’re not going to tell you just one way to evaluate a website’s value, but five. Remember it’s not about any one particular tip, but a combination of the best tips. Here they are.
1. Determine the market price.
In the housing market, the price of a house is dependent on the market around it. Sure, bigger houses will tend to be more valuable than smaller houses (everything else being equal), but if the housing market is fluctuating so is the price of an individual house.
It’s the same way with websites. If a certain niche isn’t selling well, then the top domain in that niche might take a hit. And if the niche is prospering, the individual domains will see an increase in price as well. If you don’t know what the market is like, you shouldn’t be buying domains just yet.
2. Use online evaluation tools.
Yes, you can certainly use these tools – and with great effectiveness – as long as you know their place in your overall strategy. We recommend our own free website valuation tool, of course, but we would be remiss if we didn’t mention that there are other tools online to consider as well. As with any tool, the quality of the tool itself is just one variable that plays a factor in your success. The question is: how are you going to use it?
3. Other offers.
The quickest way for a domain name to suddenly become more valuable – at least to the potential buyers – is if there’s rabid competition for it. Think about an item on eBay that is receiving bid after bid: eventually, the price of the item goes way out of control. If you’re willing to pay a lot to get your website, that’s one thing. But you should be able to also see through this inflated price and know when to back off of a domain as well.
Unless you’re dealing with a retail outlet, there’s an old saying that everything in life is negotiable. Your negotiation skills should not only help you understand what you might be able to pay for a website, but what you might only be willing to pay for it as well. If the website owner is a negotiator, the price of their site is going to be higher than usual.
5. Traffic and Sales.
Yeah, we know that these are big issues and that it’s unfair to lump them together in one tip. But a good evaluation tool (like the one we suggested) will be able to factor in these variables quite easily.
Even so, you’ll want to pay special attention to this factor because it has the most direct impact on what kind of money you can make off the domain once purchased.