Welcome to WebmasterWorld Guest from

Forum Moderators: buckworks & webwork

Message Too Old, No Replies

Online Appraisal Tools

What value do online appraisal tools have: Revisited

5:05 am on May 3, 2008 (gmt 0)

New User

10+ Year Member

joined:May 3, 2008
posts: 4
votes: 0

Came upon the site while doing a Web search. Found the posting thread on the topic of automated appraisals (2006).

Very interesting topic.

Question: Has anyone out there done any comparative analysis on any of these tools and tried to map them against actual sales?

I've been working on this on and off for the past few years, and have not really codified the results. Nor have I done any deep analysis.

I wonder if there is any correlation between such appraisal tools and the certified sale price.

If there is some kind of correlation, even if it is confined to particular niche markets or industries, then how beneficial would this be?

1:20 pm on May 3, 2008 (gmt 0)

Moderator This Forum

WebmasterWorld Administrator webwork is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

joined:June 2, 2003
votes: 101

Hello penguinses. Welcome to WebmasterWorld.

Free domain appraisal tools are largely blackbox rubbish, as reported numerous times on numerous domain forums by senior members who have played with them - for entertainment purposes only. I've played with them too and reached the same conclusion.

One could do just as well, in attempting to fix a sale value for a domain, by looking at the prices of "like function" domains for sale at Sedo or BuyDomains. Why? Because your buyer has options, including picking up an already priced domain.

Likewise, one could track domain sales reported at DNJournal and recent auction results.

The BEST FREE valuation process is to ask for an appraisal at domain forums that allow member to appraise the domain and hope that the domain is good enough for experienced domainers to weigh in with their opinion. At best the informal process offers a range, not a sales price, but it's still the best free appraisal for the money in that the process will often yield "other insights".

IMHO, free domain appraisal tools are a little more than a business model - the "free stuff model" - useful for either promoting other services, such as selling domains via a domain affiliate program, or useful for raising a few dollars via Adsense - if you can drive enough traffic to the tool. How does one drive traffic to such tools? Well, for one by posting about the tools in domain forums.

To answer your questions: I'm not aware that anyone has mapped sales to tools. That would require knowing who used the tool beforehand and what effect the tool use had on the seller's mind. IF you believe in the tool then you get a certain predictable outcome, don't you? Interesting idea, though. I'm fairly certain that folks selling high end domains don't set their prices based upon numbers generated by free domain appraisal tools.

There's a vast swath of domains, the sales of which likely wouldn't be hurt - or particularly helped - by resort to these tools to "set the value.

Frankly, if you have to resort to free domain appraisal tools to peg your sale values you probably shouldn't "be in the business".

OTOH, if you are a domain buyer chances are you won't strike a deal with a seasoned aftermarket domain seller - unless the free tool really farks up and pegs a value well in excess of the domaners number.

FWIW, the last 2 times someone approached me about buying a domain, based upon a free appraisal, the price they each paid was between 10-20Xs what the tool said the domain value was. It's not that hard to point out the flaws and inadequacies of the free tools to motivated buyers. It's also not that hard to get a better price, flaws or not, when dealing with a motivated buyer - and a domain tools will never tell you jack about your buyer, except perhaps how naive they are. :-P

Having witnessed how past domain appraisal tool threads emerged and evolved I've become a bit cynical. More than a few times it has come to light that those setting up such threads were also those who were promoting the tools. I'm not saying that's your motivation. I'm just letting you know I'm a bit of a skeptic.

Please steer well clear of naming any tools by name. It may be an interesting and manageable topic on a purely theoretical level, so I'll let this run for awhile to see if the issue has legs.

[edited by: Webwork at 2:42 pm (utc) on May 3, 2008]

5:35 pm on May 3, 2008 (gmt 0)

New User

10+ Year Member

joined:May 3, 2008
posts: 4
votes: 0

Thanks, Webwork.

Basically, I'm tracking 3-4 tools, all 'free' - and griding names in the Moniker Auctions... what the reserve prices are.

Following that gridding, I do a comparison as to the actual sales price.
No, I'm not selling these tools; just using them to see how much they may, or may not map to actual sales.

I understand that a live auction is a whole different beast. My intention is to see if there is any value in this process for trying to set a reserve price for such an auction submission. The goal for sellers is, as I understand it, not to price too high; but also not to price too low.

Replies are welcome.

5:52 pm on May 3, 2008 (gmt 0)

Moderator This Forum

WebmasterWorld Administrator webwork is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

joined:June 2, 2003
votes: 101

The dataset for domain auctions will largely reflect domainer-to-domainer sales and, in many cases, there is a traffic element to the price paid at auction.

Sales reported at venues such as Sedo and BuyDomains, and to a lessor extent sales reported at DNJournal, will be enduser sales OR bargain hunting buys by domainers.

Auction sales are a completely distinct dataset from the larger volume of sales, with the vast majority of sales never being reported. Based upon my experience and comments made by many other domainers in "off the record, not for republication" discussion, the reported sales tend to seriously underweight the value of domains in the aftermarket. Enduser values are the highest values and very few enduser sales, of privately held domains (not Sedo or BD sales) are ever reported. So that entire dataset is missing.

The most positive light I can put on automated tools is that the more transparent the tool is, in disclosing how it arrived at a value for any domain - including the specific market data it relied upon - the more that tool have "some" value.

A number of domainers I know secured their success in domaining by focusing on specific domain verticals, often related to their pre-domaining life or special insights: insurance, real estate, law, automotive, manufacturing, products, etc. THAT kind of data and intelligence => domain vertical experience, possessed by a well informed participants - is simply missing from "free domain valuation" dataset. That fact, more than any - an absence of domain vertical expertise, including market trend analysis - tends to make the tools a joke to those who actually have a depth and timeline of domain market vertical experience.

8:51 pm on May 5, 2008 (gmt 0)

Full Member

10+ Year Member

joined:Feb 27, 2007
votes: 0

Webwork hits on some very good points about auction sales but misses on one big part of them, the domains that are never sold.

It is almost impossible to gauge the value of a domain that didn't sell in an auction. If it sells, you have an amount of money someone was willing to invest in it but if it does not sell you cannot say that it is worthless. Was the reserve too high (I've seen many domains that would have fetched in the very high $nn,nnn to low $nnn,nnn range but didn't sell because the owner put the reserve at $85,000. Maybe no one there wanted it (not because it was worthless but maybe no one was into the niche of that domains). Too many factors.

Also, auctions can hike the value of a domain up, especially if several people want it. We saw a domain's value jump over $100,000 literally overnight with last fall's TRAFFIC auction (related to a sports team and a generic phrase).

There are also sites that closely monitor <niche, 3 letter> domain sales, such as <snip> (mods, feel free to remove if this is not OK). They monitor related sales and have a general value for generics (YMMV expecially when it comes to premium combinations).

Appraisal tools tend to be hit or miss (with far more misses). One will value a domain at a reg fee, another will throw a $nn,nnn price tag on it and the last one will say its worth $nnn. As WebWork said, the tools need to be transparent on how they get their values, too many will just throw out a number that the user thinks is beneficial. Your best bet is always a human appraisal by industry experts and always ask for several different opinions.

[edited by: Webwork at 10:06 pm (utc) on May 5, 2008]
[edit reason] Too many Adsene ads to pass the linking out test. ;-P [/edit]

11:28 pm on May 5, 2008 (gmt 0)

New User

10+ Year Member

joined:May 3, 2008
votes: 0

Thanks, Draggar. Points well taken.

My 'theory' is that, using a combination of a few,
various free tools, I might be able to see if there
are any correspondences. I plan to run system against
Moniker's upcoming auction name list... not all of them,
certainly, since it's a manual process and time-consuming...

However, I believe that there may be some correspondence:
even it it's that the aggregate 'value' predicted by the
system provides at least a passable 'ranking' of names by
value, and some good 'ballpark'.

I think Moniker is starting w/ a mini-auction on the opening night of the conference. I intend to start w/ that list... if I can get it sorted and run my analyses...


[edited by: Webwork at 1:50 am (utc) on May 6, 2008]
[edit reason] Per Charter we discourage promotions and/or solicitations of any kind [/edit]

1:52 am on May 6, 2008 (gmt 0)

Moderator This Forum

WebmasterWorld Administrator webwork is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month

joined:June 2, 2003
votes: 101

I'm sure the domainer blogosphere will be abuzz with news of your experiment/project, story so good luck.
4:31 pm on May 6, 2008 (gmt 0)

Senior Member

WebmasterWorld Senior Member 10+ Year Member

joined:Nov 3, 2006
votes: 4

Webwork: can someone add the acronyms to the glossary page on WW?
for example FWIW ?

Join The Conversation

Moderators and Top Contributors

Hot Threads This Week

Featured Threads

Free SEO Tools

Hire Expert Members