So you purchased a bunch of domain names hoping to strike it rich when you resell the domains. But what price should you ask for your domains? How do you tell what a fair price is?
This is when most people turn to Domain name valuations or appraisals. Just do a Google search and you are likely to find dozens of them. The question quickly becomes which service should I use? Which ones are reputable? The answer is easy. NONE!
In my opinion, these online and even manual Domain valuations and appraisals are a complete waste of time and money and serve only to make easy money by the sites offering these services.
The Domain name does not determine how successful a web site will be, or that it will receive millions of visitors. A Domain name must be related to the product or service provided by the content of the web site. The Domain name only makes it easier for people to remember your web sites address.
If for example, you have a Domain name such as, “IntimateApparal.com” and the content of the web site is electrical supplies, then the Domain name’s value is worthless. However, if the site does in fact sell intimate apparel, then its values as a Domain name could be priceless.
Like so many other things in life, the value of a Domain name is only worth what somebody is willing to pay for it. It’s very much like visiting a garage sales; something of little value to the seller may be invaluable to the buyer. As the old saying goes, “One man’s junk, is another man’s treasure.”
As with anything purchased these days, whether it’s a new cell phones or a box of paper clips, each item or domain name is worth exactly what you paid for it. If you bought a “.com” domain name and registered it for $8.00, then it is worth $8.00.
That does not mean that that is the price you or I would accept to sell the domain name. Simply put, we either purchase domain name to hold them and eventually development them, or flip them for a profit.
So if you have a web site that generated $500,000 worth or business in its first year, then what would the value of the domain name for that site be. After all if you had a site that brought in that kind of money, you could simply hold it year after year and continue to make money. To you that domain name may be priceless, but if you had to place a value on it, assuming that its value is worth 5 times what it generates for you each year, would price the domain name at $2,500,000, and that’s on the low side.
Would selling the domain name itself be worth $2,500.000? Of course not! The value is in the product or service the web site is selling. Just because someone made millions from a web site, does not mean someone else’s site would earn the same income if it used the same domain name.
There isn’t a single domain name valuation service that even considers what the name earns as a developed site. In fact there would be no way for a service to determine that type of a valuation.
A domain name valuation or appraisal is nothing more than an opinion, and as you know opinions are worthless. Ask anyone their opinion and any subject and they will gladly provide one, in fact I am sure you have often heard others opinions regardless of whether you wanted it or not. Since opinions are so cheap and available everywhere for free, why pay a service for their opinion.
The pipe dream of most domain name speculators is that they can turn that $8.00 they “invested” in a domain name, in to tons of money, often envisioning a 1 million percent return by selling the domain name on eBay or some other domain name parking service, and offer the “valuation” or “Appraisal” as evidence of the domain’s worth.
The reality is that you should treat your portfolio of domain names as you would a stock portfolio. Sell the bad ones cheap, and hang onto the good ones. When the time come to sell a site, remember what you paid for it. If you bought it for $8.00 and held it a year and paid the $8.00 renewal, than you have invested $16.00, so if you sell it for $100.00 you’ve earned over 600% on your investment. (Do that with a stock in the same time frame and you would have countless government agencies looking into you finances.)
My advice is to steer clear of domain name valuation or appraisal services and use the money you save to develop some of your domains into valuable web sites.
Posted by Jay LaBonte 
LOGICAL Thoughts 