There is A Reason The Top Domain Investors Get Top Dollar Prices. They Ask Top Dollar

Apr 11 2012

The old saying is the price of a domain is determined only by the amount the buyer is willing to spend. But its also determined by how much the seller asks for. The quality of a domain is certainly the first determining factor. Social.com is going to sell more than socialexperience.net. But get away from the standout domains and you get into a giant world of anything goes pricing. The constant in the equation, in order to get a high price you have to ASK for a high price.

I get questions every day asking what I think a domain is worth. My answer is usually what I would pay or what I think I could sell the domain for with little effort. If the name is a dot com, the truth of the matter is, it could sell for a huge range. It really comes down to how bad the seller wants it and how bad you want to sell it. If you don’t think this is a true statement then you don’t have enough money to understand. I say this because if you know a business or a wealthy person then you know that the normal price analysis is much different. When a company pays $200,000 for a 30 second commercial and $100,000 to produce it, do you really think they are going to balk at $20,000 for a domain that they need for a campaign. Absolutely not. How about a company that sells a million dollars worth of product that your domain describes. You think $20K is any big deal for them in the scheme of things. No. And yet the domain they buy is one that you think is worth $1000 or less. But the owner got the $100K for one reason. He asked for it.

The best sellers realize they own unique property and if someone wants it, they are going to test their want. They are unmotivated sellers that can live without the sale. Most can not. You don’t believe you can get $20K for your name so you won’t. I’m not saying you have to ask for $100K for every name but as you gain experience and confidence in what you do, you will start asking for more. You can always settle for less but can never raise the price.

If you look at Sedo’s and Namejet’s weekly sales list you will see a majority of domains sell in the $1000 to $2000 range. It seems to be the range that people expect to pay for a domain. It’s the range that seems to move names. But there is no price guide. There is no wrong or right in pricing. Its your domain. You can sell it for whatever you want. For someone to criticize a seller for asking to much is meaningless. As a businessperson you certainly want to make a profit and putting prices out of reach will certainly not translate into a lot of sales. But you also can only sell that domain once. The amount of sales you receive will dictate how your pricing is going. Pricing a domain is somewhere in the middle of skill and dart throwing.

Just recently a friend sold a domain for high $XX,XXX that started with a $300 offer. If I told you the name you would have said $5K to $20K would have been a nice sale. I will throw in the fact that the negotiation took 5 months. Not 5 months back and forth, but 5 months of the seller saying no thanks until the buyer came back and paid the price. If someone came and offered you $50K on that domain could you have said no? Again, this isn’t a domain that you would think that would sell for this price. I bet you couldn’t.

The point of this article is not to tell you reply to offers with crazy high prices. It’s merely to point out how these guys keep making it to the top of the sales lists. This is my opinionated answer to the often asked question “How did they sell THAT domain for that high of a price?” My answer is simple. “They asked for it and wouldn’t sell it until the got it”

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Outsmarting the Dumb, Outworking the Smart

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7 comments

  1. Samit

    Sale price of a domain usually depends on the sellers ability to say no to lower offers.

    To sell a meet.me for $450k, they must have refused an offer for $400k, how many people would do that?

    Plus unless you have access to unlimited funds, or a really small portfolio, renewals do need to be paid every year, so investors sell what they can to cover this.

  2. Gabriele

    Here in Germany it is the same problem with the de Domains. Most buyers want to pay for a very good single word domain only a few €.

    Greetings from Berlin

  3. Req

    > There is no wrong or right in pricing. Its your domain. You can sell it for whatever you want.< Domains can become ransom strips, to the name or idea of a business (if buyer is being asked to pay significantly more than anyone else would pay). Is it reasonable to take advantage of ransom strips? It’s debatable, particularly as domains were designed to be developed.

  4. Domain Assets

    Great post Shane. Totally agree with you on this one.

    Also, I don’t think there is a “right” or “wrong” here – top investors can ask for top dollar because of the position they are in. It depends where you are with your business and what your strategy is too. If you need to make some small sales for cash flow to pay some bills, then you do what you gotta do. This may mean lowering your price to move the “inventory”. If you have managed to grow to the point financially where you have more bargaining power (like some of the top investors) and can wait/ask for a larger sale – great.

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