There’s never been a better time to start investing in domains— or valuing those you already own. It’s well-known among entrepreneurs that a small portfolio of domain names is an essential digital asset. Domain names are easy to acquire, and in an increasingly virtual world, where over a quarter of all business is done online, they are the one thing every business needs.
Even in our uncertain economic times, the domain industry remains strong. From 2018 to 2023, the domaining industry grew an average of 4.6% per year, and this growth is accelerating: last year, it rose 6.3%, and total revenue from domain sales was $9.5 billion.
If you’re sitting on a collection of domain names, there’s never been a better time to sell — and if you’re not, it’s never too late to start building your portfolio. In fact, new domain name registrations also increased 2.5% year-on-year in the last quarter of 2023. The market for domain names is growing, and more people are investing than ever.
The Challenge of Domain Valuation
Despite the strength of the domain industry and the inherent worth of a brandable domain, one of the biggest challenges for domain investors is understanding the value of the domains they own. In an industry where a creative misspelling could add a zero to a domain’s value, it’s difficult for amateur investors to identify a bargain and even harder for them to identify a fair price.
Historically, domain appraisal tools have relied on keyword analysis and derived value through metrics like cost-per-click of situated ads. However, modern SEO’s most valuable domains aren’t keyword-stuffed; they’re brandable and emotive. In 2024, businesses pay the most for domains that connect with their customers. That’s why Kayak.com and Skyscanner.com, and not find-cheapflights.com, are the go-to tools for finding affordable flights. Brandability is the secret sauce for a strong domain, but it’s hard to quantify, making accurate domain valuation a huge challenge.
We’ve focussed on this problem for some time, and our new domain appraisal tool uses powerful AI to solve it. This tool analyses synergies between keywords and domain extension and integrates real-time scanning of platforms like Crunchbase to identify the practical potential for that domain. We’ve added a training data set of over 10,000 past real-world domain sales and hundreds of predictive data points to ensure that brand-ability is the main focus of valuation.
The result is an accurate and innovative new domain appraisal tool that reveals the value of your domains. Whether you’re a part-time investor with a few forgotten domains in the vault or an active business considering the value of your assets, this tool could help you cash in.
Domain Sales in 2024
Headline-making domain sales like the $15M sale of NFTs.com don’t happen every day, although there have been plenty of high-value domain acquisitions in 2024 already. What is an everyday occurrence, however, is that strongly brandable names sell for $5,000-$15,000 to actual end-users, that is, people launching businesses who need a memorable online platform.
This year that has included Snoop Dogg’s daughter Cori Broadus, who purchased chocfactory.com for $6,500 her beauty brand, security company RiskApp, which paid $12,000 for riskapp.com and forwarded it to riskapp.io, expanding the brand’s reach and protecting it from copycats. Similarly, German minigolf chain GlowZone paid $19,500 for brand-adjacent golfzone.de which now forwards to their main site, glowzone.de.
Domain investing is a great side hustle or even a main gig. And the best thing about domains is how easy they are to acquire and put up for sale. Registering a domain name can cost as little as $10 and takes minutes.
So, how many domain names do you own, and when was the last time you checked their value?
Two Strategies for Long-Term Success
Every new startup needs a domain name. Even if you’re searching for a single domain to launch your new online business, you should consider it an investment. A brandable domain name managed with a top-tier domain extension will hold its value and become a liquefiable asset for your business. If you invest in strengthening the SEO profile of that domain, that value should appreciate like a piece of premium real estate.
Investing Strategies
There are two main domain investing strategies: domain flipping and a buy-and-hold strategy. Domain flipping is the practice of buying domains at auction for lower than market value and selling quickly, usually to other domain investors. It’s a great way to make money fast once you have the eye for a bargain. It requires little upfront investment and a strong return on investment but requires high volume to see substantial revenue.
The second strategy is to invest in strong domains and wait for the right buyer. These domains require a greater initial investment: you might consider spending over $1,000 on each domain. But by acquiring truly strong domain names and marketing them to businesses that can use them as a platform for their brand, your eventual sale price can be significantly higher.
These strategies require sharpening your eye for a high-quality domain and building an understanding of the domain market and business naming trends.
Buying a domain is simple, which is why most ambitious entrepreneurs are already sitting on a small portfolio of domain names. What’s less simple, however, is knowing how to price these assets when value is created by a nebulous concoction of brandable synergies and fluctuating market trends. In 2024, this process just got easier. Discover the true value of your domains and consider whether now is the time to cash in.
Lotte Reford is the Communications Lead for atom.com, an innovative naming platform and startup ecosystem.