What is domain valuation? Is it a scam? Short answer, yes. I know this post may not make me popular with valuation companies, but I have to call it like I see it. Domain valuation is when someone offers to tell you what they think your domain name is worth, usually for a substantial fee. They claim to assign a value to your domain name based on several factors ranging from the traffic your domain receives to whether the name is easy to remember or not.
While these things do help to determine the potential value of a domain, there is no exact science. This is because the variable is people. One person may think a specific domain name is the greatest thing since sliced bread and be willing to pay any amount, and another may think its garbage. It’s like buying the house of your dreams, you may negotiate on the price but ultimately if you really want it you will be more willing to pay top dollar for that house rather than compromise on a house that doesn’t meet your needs.
If you are new to domaining it can be pretty exciting to think that you might have a real prize domain in your possession. You read the stories of the “old-schoolers” who have made millions selling their gems and you think, “WOW!, how can I get a piece of that pie?” Enter the valuators! If you don’t understand what makes a domain name great, they will either undervalue your domain so you will sell it to them for pennies, or they’ll get your hopes up by making you think they have an end user that wants your name for thousands, only to sell you their crappy service first.
I received an email a couple of years ago that read something like this, “Hi, my name is Joe Blow and I have a client that wishes to purchase your .net domain for $10,000USD as soon as possible! Please let me know where I can send the funds so we can secure this domain. He might be interested in other domains you have as well. Oh, but first I just want you to visit this 3rd party website mycrappyvaluations.com. They will give you an honest appraisal of your domain and send both you and us the results. This way my client and I know we are getting a “fair” price. The fee is only $59.99 per domain. Please do this right away or my client will go elsewhere. Sincerely, Joe Blow.”
What happens is you pay the money because you think, “10 large! I better not let this whale get away!” Pondering your good fortune you say to yourself, “Wow! I must be the next genius-rockstar-domainer!” Then reality hits. Joe Blow comes back and says, “Hi there, we saw that your .net site is only worth 2 dollars, so please accept our generous offer of 50 cents.” Meantime, Joe Blow just made a kickback on the 59.99 for your appraisal.
I know you’re thinking “What a scam, I could smell that a mile away!”, but you would be surprised at how many new eager domainers fall into these traps. I have to admit the first time I got one of these emails my heart skipped a beat when I saw that 10 grand figure, but as I read on my BS detector kicked in and I clicked delete.
My goal here is to share my experiences and hopefully save at least a few people from getting roped into these types of scams. We all want to make a quick buck and there’s money to be made, however if it seems too good to be true…say it with me, “it usually is.” If you get offers on your domains, listen to what the person is actually saying and read between the lines. If someone is really serious about an offer they will give you their contact information, they won’t be deterred by counteroffers or using escrow.com, and they won’t make you jump through valuation hoops to get there. Transparency is one of the keys to a closing a great deal.
Till Next Time,
*For more information on domains please visit the domain sites on my resources page. I will be posting more on this topic soon. And don’t forget to do the Facebook and Twitter follow thing, all the cool kids are doing it!