Must compare comparable domain names

• The appraisal process must follow strict rules and the systematic application of the valuation process
• Appraisals by sales comparisons are not enough, because they rarely compare comparable domain names. The appraisal must take into account the other important factors affecting the value of a domain name, and there are many
• It should only be produced by an experienced qualified and trained professional
• It should be based on a comparative market analysis estimate of market values performed by an experienced professional in the particular industry. You can't do a proper appraisal if you are not very familiar with the industry where the domain name will be used
• It should compare the value of recent sales of comparable domain names, and it's often nearly impossible because domain names are unique, and the majority of big sales are confidential. For this reason alone, you cannot rely on the current appraisals offered by so many companies
• To form a valid appraisal, the relevant data about the particular industry must be collected, verified, and analyzed
• The appraisal process must be accomplished by following specific steps, and by taking into consideration all the relevant information and market research, and data analysis, specific to the industry where the domain name will be used
• The appraiser must gather data about the specific market area where the domain name will be used. The appraisal is worthless without this
• The analysis of comparable domain names should include data about similar developed domain names in that industry
• The appraisal should include information about comparable domain names currently offered for sale for this industry, and it should show the degree of similarity or difference between the domain names being compared

The research of the industry is essential

• It must include the analysis and profitability of the particular industry and must include a proper research of the industry
• An appraisal cannot be accurate unless it takes into consideration comparable established real businesses in that particular industry. A parked domain name cannot be compared to a real business because it's inferior in every possible way
• It's impossible to give an accurate appraisal without having serious and proper knowledge of the particular industry where the domain name will be used

Must cover the potential of the domain name

• The appraisal must cover the domain name marketability. It means the potential number of world-wide clients that the domain name can attract The appraisal must take into consideration the estimated future resale value and future growth potential
• It must take into account whether there is a suitable established international market for the domain name
• The appraisal should cover the domain name recognition. When the domain name uses plain generic English words spelled correctly, the value should be higher
• The appraisal should show who are the most likely buyers for this type of domain name. If the potential buyers are big corporations then the value should be set accordingly
• It should take into consideration the domain name's net earning power of 20 to 25 years. It should be the earning power of a developed site, and not a parked domain name
• The appraisal must take into account realistic expectations of future price trends for this particular type of domain name and industry
• An appraisal should provide an investor a sound and honest basis to help him take a decision. It's very rarely the case, because appraisals are mainly generated on the theoretical value of a parked domain name which is the lowest return for the owner
• A proper appraisal and market analysis should provide a figure for the highest and best use of the domain name, and not the lowest value of a parked domain name

Must tell the truth

• A proper appraisal should help prospective sellers determine acceptable selling prices, and prospective buyers decide on offering prices. The appraised domain name price should be the same whether you are buying or selling
• It should take into account the most important factors affecting the true value of the domain name
• The appraisal must provide information about the potential to develop the domain name
• The appraisal must take into account the quality, value, and utility of the domain name
• It should cover the marketability, usefulness and suitability of the domain name

If you know anyone who meets these high standards, let us know and we will be happy to recommend them. We are not aware of any company that comes close to meeting these essential standards. Anything less is a joke and a gimmick

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