Domain Valuation: Influence of CPC, Search Volume and TLD

Mike Mann of DomainMarket.com owns over 330,000 domains with an estimated value of over a million dollars. He also has his own algorithm for purchasing domain names with keyword potential. About 95% of his portfolio is .com domains, mostly English keyword domain names. So how does he value domains to add to his portfolio?

The M.O. of a Domainer

  • Mike Mann registers / buys approximately 400 domains a day.
  • He sells approximately 20 domains a day.
  • He grosses around $400K a month.
  • Search volume of the domain’s keywords is the strongest predictor of the value of a domain in the DomainMarket portfolio. Next strongest predictor is whether it’s a .com.
  • Average search volume for the keywords in a domain he owns: 1100.
  • He makes most of his money selling top dollar domains as well as cheap domains. So either shoot for the stars or make it up in volume.
  • He says that most domain names are useless and worthless.
  • He also advises that a .org domain connected with a charity is worth approximately 20x what that domain would be worth if it was owned by a business (he hardly owns any .net / .org domains).
  • The average length of his domain names is 14 characters, and approximately 75% of his portfolio is made up of one or two word (.com) domain names.
  • He generally doesn’t bother buying domains with hyphens.
  • His advice: “Invest in $350 domains at DomainMarket.com because there are tens of thousands of gems and you cant find a better source.”

What Influences a High Value Domain’s Sales Price?

domain-valuation-popular-tlds
Dropmining.com looked at over a thousand domain names that were sold at domaining conferences over the past four years. These domains average in price between $10,000 and $20,000. Contrary to what you might have thought, their analysis shows that only 3 metrics were consistent statistically significant influencers of what an expert domainer was willing to pay for a domain:

top-domain-sales

  1. Exact match search volume
  2. The number of other extensions registered for a domain (the domain name popularity)
  3. Whether the domain was a .com

Two factors that somewhat surprisingly had no statistically significant relationship with the sale price included

  • CPC for the domain name keywords.
  • The length of the domain name

All things being equal, it wouldn’t hurt to own a domain name with high CPC keywords. But as far as actually flipping that domain name, the data says that you’ll do better with a low cpc .com (which also has the .org/.net/.info etc. registered) versus a high cpc .com that doesn’t have any other TLDs registered.

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