If you’re interested in domain trading as business model, one of the most important things to know is how to evaluate the quality of a domain. The domain trading and monetization experts at Protrada recommend looking at 8 key characteristics.
A .com domain name is the most valuable. The reason is that people tend to default to the .com version of domain names when they don’t know for sure which URL to enter. Websites that have TLDs other than .com lose an average of 10 percent of their traffic to .com defaults.
2. Does it contain relevant keywords? Domains that consist of exact-match keywords are valuable because Google gives such pages a ranking advantage. They also are easier to remember than other domain names.
3. Is the niche popular? Choose domain names that target niches with popular appeal. There’s probably a small, but rabid, group of fans who love Tibetan Mastiffs, but a domain name targeting that niche won’t be as popular as one that targets all pet lovers.
4. What’s selling? Just like certain types of homes go in and out of vogue, demand for certain types of domain names will wax and wane. As Protrada notes on its website, “Recent sales can give you a good estimate on the value of a domain. Much like the real estate business, it can be beneficial to find out the selling price of comparable items.”
5. Does it have existing traffic or revenue? If you don’t want to get into the business of flipping domains, look for sites with existing revenue streams. You can buy and hold these domains, focusing your attention on increasing their content and value, just like some real estate investors will buy and hold rental properties to enjoy to cash flow.
6. When was it registered? This factor is key when it comes to Google and other search engines. Because new websites are created each day and many expire within a month, new domains are slightly penalized when it comes to search engine rankings. Newer domains are less valuable than older domains, no matter how well-optimized they are.
7. Does it capitalize on an emerging trend? Hot trends can skyrocket the value of domains quickly. Developing technologies are a great example. Be wary though. Like short-term stock trading, the rewards may be exciting and fast, but the risks are high. Bad timing could mean that you end up buying at a peak price and watching your domain lose value.
8. Does it contain a typo? “Typo” domains get traffic because people misspell or accidentally mistype a word. You want to avoid typo domains for trademarked terms unless you like to fight legal battles you can’t win. Typo domains for generic terms can be valuable. For example, the owner of accommodation.com might think that the typo domain of accommodation.com is valuable enough to buy from you.
As Protrada notes in its Domaining 101 e-book, a domain is an asset once it can pay its own registration fees. Until then, it’s a liability. Weigh the criteria listed here to ensure that you’re selecting good domains that have potential to become assets.
Source: Domaining 101, a free e-book from Protrada. Download your copy here.
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