I should also note about domain appraisals. People love to see numbers on a screen which reflect property value. This third party recognition can lead to a good feeling about your investment however the domain asset category is probably the worst industry to rely on automated appraisals for value.

Let’s use the real estate comparison. If your house is worth $500,000 then odds are any licensed appraiser will valuate your home much the same – plus or minus 10%.

However with domains … oh my….

Take http://www.lasvegashotels.com for example. A highly valuable domain no doubt however using some of the most popular automated “domain appraisal” systems around one can quickly get confused about a solid value range.

Epik estimates the domain at $2,189,500
http://appraise.epik.com/lasvegashotels.com

Estibot.com estimates the domain at $755,000

Now take the domain http://www.carloancalculator.com

Epik estimates the domain at $48,000
Estibot.com estimates the domain at $16,000

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These are significant differences!!
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No automated system can ever factor in the value of branding, how much the traffic is worth and many other elements to a common buyer since (outside of a pure domain investor) these dollar values change significantly. A hotel lead may be worth $5 to me but $100 to a hotel company. How can an automated appraisal factor in all of these unknown variables? It’s impossible (or at least not available currently) so any automated domain name appraisal is essentially fools gold.

The lesson here is never believe a value on a screen. What is important however is the data you an extract from these appraisals outside of the pretty lottery ticket value. Important items are exact search, existing traffic, any existing pagerank, industry of the name (obviously financial related terms are worth more than classified ads) and more.

A lot of people think domain asset investing is easy and sure – its easy to find one name and make a quick buck but to properly apply finances for a portfolio of domain name assets takes a lot of knowledge. The good news is that many of today’s success stories are people who started in the business less than three years ago so when you hear the words all good domains are gone this may be right – but it doesn’t mean there are not a lot of good domains still very affordable.

Domain name investing is truly an acquired skill but one based on knowledge more than luck.

Sorry – I can see how that was a little confusing. In your case what I meant is once someone has a developed site with traffic then they really have to view any potential sale as much more than just a domain asset sale. Treat it as a real business I guess is what I mean.

A lot of buyers will offer people with a semi-popular blog 20 or $30,000 and people will sell but its a calculated value based on tearing down the site many times just to show ads.

Once you get a popular site up and running you need to shop and sell to people who have the same development interest (only much more resources)

As for your question.

No, someone is probably not going to buy your content without your domain .. however they will buy your domain without your content – when you get somebody to buy both then you have a winner.

GoDaddy and all those sites should do more to promote this market place if they’d like to boost profits.

Tell me more aboutyour statement “never sell your domain, sell your site”? Can one accept buying my “site” without buying the url: financialsamurai.com?

It’s hard to put a value on top domains.

Howtoloseweightfast.com is worth anywhere between 20-100k in my book. It really depends on the buyer and this is the hardest part about domain valuation since unlike real estate you have a world of different buyers. From people who just flip domains to end users. Even the definition of an end user is debated long and hard.

Is it just a company who specializes in the keywords of domain (i.e. weight loss company)?
Is an end user a blogger like yourself who will use the name?
Is an end user somebody who will create a 5 or 10 page site and throw some Adsense ads up?

Typical “domainers” = people who purely buy and sell domains (you know those with the annoying ads) usually only define the elusive end user as a big corporation however its not the case. If I owned financialsamurai.com and sold it you and you created this blog you are an end user however quite likely an individual would only pay less than $5,000 for a name whereas a big company may pay $500k for the same name. Truly wide variance and that’s why valuations are tough.

What any investor needs to pay particular attention to is the LIQUID Value of a domain name – otherwise it can be somewhat of a speculative game. Remember, the key word is LIQUID value. This is the single most important thing in domain investing as we are in a very ILLUQUID marketplace.

Unless you have the contacts, understand where to sell names and what brokers to call for assistance its very hard to dump that $10,000 name on any given day. If you own stocks you simply put a sell order in and move on. Sure, you might lose a few bucks but nowhere near the amount you would lose if you didn’t know anyone and needed to trade in a $10,000 domain for cash today.

I’ve seen $10,000 names go for $500 only because the buyer needed the money and could not wait a few weeks to sell.

If you have the budget buy some good names and wait however your portfolio risk should always be assessed with liquid value. People who provide the most liquid value are other domain investors so as you build a portfolio you need to make sure the prices paid are equivalent to what you would expect another domain investor to consider a rock solid deal. This will provide some security in the event of a firesale.

Of course, these numbers are hard to determine but any good domain under a couple thousand is a pretty safe bet. Again, the investor needs to understand what constitutes a good domain and this takes a lot more education than I could say in this post.

In no other market do you have such a negative factor of liquidity going against you so yes, there is a LOT of money in this industry but you have to have patience and consider each buy a long term buy while building a portfolio with attention to firesale values..

Your domain financialsamurai.com at face value is not worth much more than a couple hundred backs but because of what you have built its quite likely worth a small mint. This is the beauty of the internet – in fact, you are one of the true success stories on the web – never sell your domain, sell your site. You have the platform and ability to monetize this where I hope to see another bankaholic story one day.

How much do you think http://www.howtoloseweightfast.com would sell for?

I guess I’ve got several domain names myself and the two that are public are FinancialSamurai.com and Yakezie.com, which I guess would go in the brand name category.

I just bought a couple names last night and will play around with them for a friend’s business.

Thnx for stopping by!

As someone heavily involved in the domain name sales arena I have to congratulate both Joel and the Samurai here for such a great thread. Believe it or not this post has mor comments than 99% of all posts in the actual domaining world.

Investing in domains is actually a huge business but collectively sees only a small growth from people outside of the sector every year. When I say small growth I mean people who really dive into this business and purely buy and sell domains. Lots of people buy domains with an intent to use them but as purely just an investment the amount of “new blood” in this industry is probably at a 5% growth rate.

Every Tuesday weekly sales are reported by DNJournal which almost exceed well over $1,000,000 per week – and these are just reported sales. I know people who do over $500,000 a month in sales and never report a single one so the piece of the pie getting reported is far less than what actually sells.

I will add that there are a few classes of domain names.

One are the keyword domains Joel mentioned which have tremendous development value however the key is to understand what makes a good keyword set and this is where the opportunity lies to get great deals. Many traditional domain owners actually don’t understand the development world at all and many times price names that sound cool higher than ones which have a lot more productive value in terms of SEO and online commerce potential.

How many of you think http://www.howtoloseweightfast.com is a great domain name?

Some would say great – others would say too long – while even more would probably not like it because its more of a question than a brandable name.

However the fact is according to Google the keyword set “how to lose weight fast” is the second highest search term for anything to do with weight loss.

Many domain sellers price shorter names less than longer however sometimes the value is in the longer tail terms as well

Secondly – we have 3 letter names – like AUD.com – These names are more collector names than anything else however investors should watch for trends as often its pretty easy to grab one for 3 or 4k and sell it for 10 only a week later. Most of the aftermarket buyers (on venues like SnapNames and NameJet) are still domain investors and everyone (well almost everyone) has a budget so lots of opportunities lie. Of course, if you intend to show ads on the name based on products which a company who has the same acronym trademarked you very likely will be sued so unlike buying a car one has to really understand trademark law when purchasing these types of names. You also have to use common sense. Are you buying a domain because its close to a cool company you like? .. If the answer is yes, then you buying this domain with the intent to capitalize on someone else’s trademark. Of course, someone has to prove this but heavy fines exist

Then we have brandables – catchy names like nostringsattached.com or http://www.govote.com – names that have meaning and could very well be used as part of a branding campaign. At the end of the day these usually catch more but the supply of interested buyers is far less than development worth, keyword rich domains.

I published an article here that sums up the state of domain market today vs. 10 years ago and may be of some value

http://www.luxurynames.com/domain-valuation.html

This asset class is one of the greatest finds out there but be careful. People who spend money recklessly and just buy names because they sound cool often end up with nothing less than a pile of renewal fees.

Those who take some time to educate themselves and ask people for value opinions …. people who sell domains – not people who like domains … can do very well.