Registering a new domain name may cost you as low as £10, but some domains have been sold for as much as £20 million. Various factors such as keywords and attractive names can raise the value of a domain significantly higher than its original registration price.

As the business of domain speculation (valuing, buying and selling domain names) become more popular, the practice would continue to grow among domain merchants. But before you begin to dabble in speculation, it’s a good idea to know how you can tell what’s valuable from what’s not.

The tools of valuation

Like prime real estate, there are a number of online tools that you can use to determine the worth of a potentially lucrative domain name. If you see an attractive property, you can easily go online and do a valuation on the price. It’s no different with domain names.With sites like Estibot, Valuate and Website Outlook, you can have a pretty good idea of what a domain is worth.

While there is no guaranteed formula to obtain the exact valuation of a property or domain name, these tools help by providing a ballpark estimate. SitesEstibot and Valuate work on the same principle of algorithmic valuation of a domain based mainly on keyword metrics, as well as, prior sales data and cost-per-click data.

Website Outlook offers a valuation established from website performance indicators such as backlinks, Google Page Rank and Alexa traffic rank.

But before you take your potential domain name to any of these sites, here’s a guide on ten metrics that you can use to tell a profitable domain simply by looking at it.

1. The phone pronunciation test

This simple test can be performed by anyone. First, call a friend on the phone and tell them to visit your website. Pronounce the name of your site and cross your fingers. If they follow up by asking, “How do you spell that?” you may have some work to do. Domain name simplicity is key for any business domain, because processing fluencywould drive up the value of your domain.

2. What is the domain’s SEO value?

People buy domains for various reasons. While some buy because it’s a right fit for their business, others buy it to ascertain their authority in an industry niche. These days, the latter is becoming a major reason for domain name purchase. People are more vested in a domain name once used by a website that attracted several inbound links, or had a high PageRank. This quality helps them in achieving their objective as an industry leader.

3. Traffic, the value indicator

Certain domains naturally attract type-in traffic, even without any useful content. For example, generic domains such as Pets.com or Loans.com would have high traffic, even if they aren’t indexed by Google. Having visitors type in a particular domain name directly, increases a domain’s inbound traffic, and thus its monetary value. Toys.com may have been de-indexed by Google, butthe majority of its traffic is type-in and it attracted a selling price of $5.1 million.

4. Does it have a local marketing potential?

If a domain name is related to a particular city or geographical region, it would likely have a high value offering. Names like LeedsFamilyDentist.com or KensingtonPlumbers.comwould be worth a significant sum due to their memorability and local SEO value. Because may local domains are yet unregistered, there’s a huge market potential for registering local domain names to resell to marketers, SEO companies and businesses. Although it’s difficult to put a value on a local domain, the popularity of that area or population size can prove its worth.

5. Age is not just a number

The value of a domain name can be determined by its age. Generally, Google has a bias towards long time registered domains over new ones. This is because it regards older domain names with higher SEO value, and prioritises them over newer ones. This is especially true of websites that have been indexed by Google for more than a year. Domains that have long search engine history would normally rank highly with little more SEO effort and link building.

6. Is it a .com TLD?

Domain names with a .com extension have a good search engine optimisation potential. It is common knowledge that the .com TLD is used by almost half (48.1%) of all websites. Google search bots also rank .coms higher than other types of extensions because of the belief they are more credible. If you find a good domain name and it is a .com TLD, you can expect to pay more. As an investor, you can buy more .com sites with the intention to resell later.

7. Does it contain keywords?

Every marketer knows the value of keyword domain names. If you run a car wash business, you’d want a domain name that contains keywords related to your service. Domain names like cleanautos.com or spotlesscars.com would naturally be attractive because they contain words that potential customers use to search for your service. Because of their favourable SEO qualities, keyword domains would have a high value.

8. PageRank is a factor of valuation

The value of an existing domain name can be determined by its PageRank value. The higher a site’s PageRank, the more likely it would show on top of Google’s search results page. PageRank, a Google website credibility metric, gives value to websites by counting the number of quality links that point to it. Google used to have a tool on Chrome that allowed users to check PageRank, but it has since been disabled. However, this PageRank checker can be used to do the same.

9. Existing web content

Existing web content is a common overlooked indicator of domain value. New owners also lose potential SEO value by destroying previous pages because they have no idea how useful they are for web visibility. If a company is in a business related to the previous web owner, they might find some pages in the domain useful, and redirect them towards enhanced pages to retain their SEO qualities. People who know this are woulding to pay higher for such domain names.

10. One-word domain names

If you can lay your hands on a one word domain name that has the majority of the criteria listed above, you can expect to sell it for a handsome price. People prefer one-word domain names because they are memorable, convenient and brandable. A brandable domain name is a huge plus for online businesses. Although they do not grant automatic positive rankings, one-word domain names are important for marketing reasons.

Do you have any domain name that you’d like to value? Check out these metrics and you are good to go. You can also do a domain name availability search here.