Domain name value
 You probably have heard about some astronomical amounts which domain names can be sold for. Below we will tell you a little bit what factors are important in determining the value for a domain name.
Spontaneous visitors who are just entering the domain name in a browser, or have added the name in their favorite folder or use the name for their homepage. A webpage which has a lot of these visitors is destined to grow.
Position in the search engines also determines a high portion of the value. A higher position in the search engines will mean that a lot of visitors will come from search engines.
A simple domain name without a hash which is easy to remember will be worth more than a domain name with a hash. Often is a product name easier to remember then a company name.
Public knowledge is also important. Domain names which have been on television, in the news or on major websites will be worth more.
Domain name extension is also important. A .COM domain name will generate the biggest numbers, since it is used international.
The real value for a domain name is not easy to be calculated, every expert who is asked to determine the value will give a different number. Below we have written down some prices for domain names which have been sold the last 2 weeks of 2006
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Partners.com |
$130.000 |
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FJ.com |
$105.000 |
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TJ.com |
$105.000 |
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SportTV.com |
$99.000 |
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Announce.com |
$90.000 |
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MusicDownloads.de |
$13.000 |
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Sponsering.de |
$9000 |
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StudentJob.co.uk |
$6500 |
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Leads.us |
$5000 |
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MoneyWorld24.de |
$5000 |
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Another estimate is done below and is based on some statistical data.
1. You need to know your current site's conversation rate. This rate is the number of visitors per month to your site, and the number of orders these visitors will place. Let's say it's one for every 75 visitors.
2. You need to know the average order size. Let's say $200
3. You need to know how many visitors a domain name will send you each month. We are targeting a site with approx. 5000 visitors per month.
You take $200 * 5000 and divide this by 75 (your 1/75 conversion rate), and this will give you $13333 a month extra income. That's $160K a year! If your profit margin is 20%, you would make an extra $35K in profit.
Most companies would be willing to spend $100k to purchase this domain name, especially keeping into account the sales production over a longer period and beating the competition.
Then the harder piece to estimate is, will this traffic keep coming and if so, will it grow? How much? It all depends on your marketing efforts, and website strategy.
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