I want $2.5m for my Domain as it is Domain Art! How do you deal with unrealistic sellers?
This is not a joke, but an actual reply I got from someone I contacted to see if their domain was for sale. Now sure it was a nice name (a LLLL.com) – that could have probably fetched $2,000 on the aftermarket. But $2.5m and Domain Art?
Now I haven’t been involved in this business as long as some but has anyone ever come across Domain art before?
Anyway I think this is a perfect example of an unrealistic seller. Sure it’s his property and he can put it on sale for whatever he likes. But this guy wasn’t willing to budge and I believe he genuinely thought his name could fetch that sort of price.
Now this is obviously an extreme case and in situations like this I just walk away as there are plenty of other deals around the corner.
In the past I had done a lot of my buying off non domainers, but I’ve found lately their price expectations haven’t taken into account the current economic conditions. Also this is the area where you are likely to find the most unrealistic pricing.
On a couple of occasions I have forwaded on comparable sales and also let them know that only a fraction of domain sales recorded are for $50k+. I have also advised they check out Namebio and DNjournal – to look at similar sales. (this has only worked on one occasion and it took over a month for him to see the light..)
So for the last few months the only buying I have been doing is from Domainers, because as a whole they know what the market is doing and the sort of prices they can get for their names and they’re also more willing to flip for a small profit and move onto the next thing.
So going forwards I will have my eyes on the aftermarket looking for deals with realistic sellers.
If you have any funny stories about unreasonable price requests please do post them here.
James
Is 2.5 really unrealistic? If you spend 30k for 30 seconds on a television ad, in just about any major city. National placement will cost upward of 200k and 30 seconds later it’s gone. Hope your demo caught it. I’ve had several offers in around 20k for ExactMedia.com, in fact one guy keeps asking hoping I’ll give in. I’m not parting with the name unless I can retire. And I figure that’s 1.5m. Pay taxes on the sale, now it’s 950, set the kids college up (less 400 more) deducte for an ex-wife and add in a girl friend or two, I’m broke again. Back to the name game.
As many of you know I broker domains not just selling but also buying for other clients.
Recently I contacted a domain owner of a nnnn.com domain and made an offer of $$,$$$ on behalf a client and the owner comes back with a counter offer you know my domain is worth $$$,$$$ its a great domain etc.
Crazy a nnnn.com for $$$,$$$ I think people need to wake up some time!
some sellers shall never get it and others think there names are worth millions when they are worth $,$$$?
Regards,
Robbie
Robbie,
I tend to disagree with your quote of “Crazy a nnnn.com for $$$,$$$”
Many domainers simply view 4 letter names as nnnn.com’s and try to compare values to other nnnn.com’s.
This valuation only works in second tier domaining. I mean second tier since premium buyers (domainers and non-domainers) do not care about the nnnn.com label. Its not a standard of comparison for end users and certainly not a comparison thats really worth anything in particular. Sure, its a catchy way to define these types of names and well worth having a subcategory to talk about in the domain industry but as far as comparing apples to apples - almost impossible when you are talking about acronoyms and brandable phrases at the end of the day.
I never look at prices of NNNN.com’s or CVC.com’s - to be honest I could not even list all the combinations people use for these short domains since they are all useless for helping define value. Again, great for a story or a brand referring to this sub-category of domains but for value comparison - just silly and a standard that domainers created essentially for domainers.
In the last few weeks I have seen a couple NNNN.com sell for $30,000 + - buyers were looking at the value of the name as an individual name and not comparing to some NNNN.com sale board. Remember, its us (the domain industry) who put label on these and one day decided that they all should be worth something comparable to one another when in fact - the true value of a short domain - whether its four, five or 6 letters - can really only be determined by an end user.
Take a generic domain like Weddings.com - calculate the market potential, revenue possibilities, type in traffic etc… and a company (or a domainer) can essentially calculate the maximum the domain could be worth.
An acronym or a brandable name (which only your end user understands the potential) is impossible to define or even more impossible to compare by grouping all NNNN.com’s in a basket.
Don’t get caught up in comparing these things to one another - its a fools game. Each one has a very unique value however the only definitive value is their rarity - nothing else. For that simple reason - ranges can be from $1 to $10 million any day of the week.
Alan,
Thanks for your post. A lot of what you said i agree with. But the pricing standard created by domainers is also very useful when purchasing names. I suppose the way to look at it as the wholesale value - i myself never buy a name that i can’t make a small profit on by selling to other domainers - it’s just risk management. If i’m cleaning house i will let certain names go cheap - but i haven’t had to sell a name for less than i paid and that’s only because when buying i had benchmark i could evaluate the names against. In investing all fund managers are very focused on risk and minimising risk and that’s what i believe the forums and domaining community values allow you to do.
James
James,
You’re right and for the record, very few agree with everything I say
There is a benchmark and its great to see one, but I think the benchmark is solely based on the rarity factor. When you sit down and try to find bottoms or comfortable wholesale selling levels.. at least for the 2,3 and 4 letter names there is more than a perceived value - an actual value - for the rarity of the domain itself..
Whether the name has an A,O or E - these further comparisons within this segment of domains - is what I think are many times hard and misleading for new investors. I’m not saying they are not worth more because obviously vowels contribute to the pronunciation of the domain hence have a more brandable appeal but its almost like saying “which domain sounds catchy enough” to base the higher values on.
Investing in these above baseline values is a gamble - more so than a keyword domain imo.
So a base range for wholesale security is great and justifiable but I’m just not sure how one can group all of the domains past the base as a whole.
I am no expert in this area especially since I just realized NNNN.com may stand for Number Number Number Number .com …..
hmmm… So Robbie wasn’t talking about vowels and alphabetical domains but numbers. Same theory should apply here as well.
Great blog by the way … must say I do enjoy it.
It’s a known fact that there are countless “ebay” style sellers around. They put on a ridiculous price to attract lookers and en up selling for much less. Although what you are describing sounds like a case of false entitlement and pure ignorance which just screams “Dont do business with me”.
Good luck tho,
Dan
Alan - glad you enjoy the blog - sadly i can’t post as much as i would like as work is pretty hectic at present and domaining is having to take a back seat. I don’t think it’s something that’s going to change soon either.
I think the problem is the huge discrepancy between the seller and buyer’s perceptions of “premium”. A LLLL.com for 2.5 mil would have to be a highly marketable product with special appeal to an industry/business sector.
Is the LLLL something like HQXZ.com, or Home.com? Huge difference. I would categorize Home.com as valuable and as rare as a Van Gogh. Maybe the seller hasn’t acquired necessary base of knowledge yet for domain valuation.
M. Menius - The name was okay - along the same lines as Soob.com - so a good brandable, but nothing spectacular.
Oh yes - i was offered the .org for free with this