Sure, up until the recent economic slowing many domain prices of “average names” (not premiums like mortgage.com, grass.com etc…) continued to skyrocket from heated competition between a select group of deep pocketed investors who bought hundreds of domains a day. A domain reasonably valued by most of us at $2,000 wasn’t rare to see go for 10 or $20,000 simply because a few people loved to auction it out with each other.  Fact is, many values were simply skewed higher from these big buyers who were dropping coin for almost any name in the auction aftermarkets.

For most of us, these values were never attainable because we were not a registrar dropping names but private sellers who could not sell at these drop houses. In truth, these sales helped our industry greatly and increased all our values on paper but how many of us received more because another name sold for similar? A handful at best.

These heated auctions are less today but it does not mean your domain is valued any less today than it was yesterday. Look at DN Journal’s report every week.

Strong, consistent sales.

For most domains the value will never be $100,000 or more.

Many (if not the vast majority … that have any decent value) will be within the $2,000 to $10,000 range slowly growing over time. Sales in these ranges have not really slowed as shown by all the weekly reports and its fair to say will probably never drop any significant amount because these names have so much development value that the lower the price the more buyers will appear. Remember, everything is for sale at the right price and you drop a good name low enough – it will go straight back up with the amount of buyers interested (auction mentality - something I will never venture to analyze)

So yes, the market has shifted but all the work over the last years have brought our $7 investments to prices where $2,000 or $5,000 is considered a very reasonable price to pay for a decent name. Business are starting to see the value and there is lots of information out there creating awareness that sometimes you have to pay for your domain (ironically enough our accountant, who has seen thousands of domain sales past through her records, was ecstatic when she found a domain name available for one of her new projects at a “bargain” price of $1,500)

So, what does this have to do with selling domains in a bear market?

Everything.

First, and probably most important, is that buyers are looking for quality and today, more than ever before, you better be able to bring quality to the table. Whether its development value, traffic or price range - it’s most important you understand who your target market is and when to command what prices.

It’s no longer a time to try and “get lucky” by pricing a domain comparable to some of the names sold at NameJet because you are not selling in a drop auction format with drop auction mentality. You are selling to investors and end users who are watching their money and realize fair value and there is no need to over pay for any domain at the moment. You might not have a few of the big guns battle it out for the name until this storm passes but as long as your price is reasonable than its pretty easy to find a buyer for almost every name.

Reasonable price – that’s another story.

I’ve seen thousands of names cross my desk and for the most part I’m not sure how somebody even sat down and came up with the domain – less than reg fee would be most values, sometimes I even thinking of charging people to read these lists but the humor is fair trade.

So, ask yourself when setting a sales price…

Would you buy the domain?

How much would you pay?

Ask that question each and every time you are listing a name for sale because most likely (until end users flood the market in 2018) then the same people buying your name are using somewhat the same valuation you are. Give them a deal, put it in auction and you may even make more with multiple bidders.

But again, its about quality. Don’t fall in love with your names and don’t analyze the drop channels too much to find value comparisons. Talk with other domainers and ask what they think a fair price is but don’t get upset if its less than you think – many times it is. Also, don’t offer the name for sale, just try to strike up a conversation at the next conference or next time you chat with a fellow domainer and ask them to price a few names for you.

When it comes to end users then find a way to compare the name to the domain’s industry to find a good value point.

But whatever you do be fair and don’t blindly ask for riches.

Money is tight and the reasonable will be rewarded.

Ask yourself when you start pricing your next list of domains for sale?

Is this the time to dream or is time to start selling domains?

Good luck to all…..

©2009 Newfound Names LLC. All Rights Reserved.

We have our own black book of buyers and only a few people actually know how much business we do (yes, the numbers would shock most of you) but I started this blog to get more involved in the community (or at least have an outlet to rant every now and then) so today I want to provide some more facts to help find end users.

First, many of us speak about how much traditional media costs and how one can blow $100,000 on an ad in the New York Times but I think some of us are just numb to those numbers because it doesn’t seem real.  How can a company drop $100,000 for a Sunday and and still have a hard time paying $20,000 for a domain?

Logically … there is no logic here but to find end users you need data also. So…

Every day you drive around and see those billboards owned by ClearChannel (doesn’t matter what country – I’ve been everywhere and its one of the few things I always look for – to see who owns the signs – more often than not its ClearChannel - rest are owned by Viacom).  Well, my peeps, your end users are sitting right in front of you.

Take a look at this page - http://www.clearchanneloutdoor.com/rates/

It’s ClearChannel’s standard rates for billboard avdertising.  Remember, this is NOT the New York Times – this is a billboard where most people are buying a BRANDING presence which means the money spent is part of a bigger plan and I can promise you these companies have money to spend.

Take for example the following input:

Division:  Miami / Fort Lauderdale
Market: Fort Lauderdale
Media: Poster
Ethnicity: General market

$4,500 - $49,600 a Month !!!  - That is $54,000 to $595,200 a year for eyeballs looking at your sign – not targeted visitors – just people driving by.  Additionally, most of the time these companies are local business who still do not even have a memorable web address.

Drive around – sit and wait for the signs to change (as many signs share advertisers) – then move to the next one.  In 10 hours you will have a short list of the companies who spend awful amounts of money locally and are probably willing to chat more than you think.

Parts of our “black book” were put together this way and I can tell you it works.  It took me a few days to do the research a couple years back but we have made more money from this experience than you could imagine.

Need more examples of how traditional media is just ridiculously expensive compared to what you would sell your domain(s) for…

How about $59,875 for a ONE TIME quarter-page ad in Sunday’s New York Times Automotive Section!

or $34,608 for ONE TIME full page ad in the Time’s Real Estate Luxury Homes & Estates section

Simply view 2008 rates for the New York Time’s here…

http://www.nytimes.whsites.net/mediakit/newspaper/rates/ad_rates.php

Want to find local rates simply search for the name of your local newspaper + advertise

For example, in Fort Lauderdale the main newspaper is the Sun-Sentinel.

Go to Google and type in “Sun-Sentinel Advertise” – your paper’s ad rates should be in the top results.

This type of data can help you figure out who is paying how much.  The jewelry store around your corner may have a bigger budget than you think.

Enjoy….

©2009 Newfound Names LLC. All Rights Reserved.

Is this really a valid exit strategy?

It certainly sounds great but it’s also the elusive dream for many domain owners as portfolio buyers are few and far between – at least those that want to pay a fair price.

Keep your head out of the clouds (visit every now and then) and spend time developing a real exit strategy – one which is deeper than simply finding the right buyer. Remember, if you can’t find someone to pay $100,000 for your portfolio today what makes you think you have a better chance of selling a bigger portfolio for $2,000,000 (using the same logic) down the road. Sure, it’s possible but money gets harder to find the higher you go.

Develop an exit plan that contains multiple exit points. Build a smaller portfolio with some great names, have some developed sites, create a brand within a specific sector. So many options but each one will be an exit point in your overall exit plan.

All kinds of exit strategies exist but the question is – do you have one?

©2009 Newfound Names LLC. All Rights Reserved.

A generic domain name should be one that defines an industry, product, social event, profession, name or procedure.

I’m sure there are more words here but the reasoning is the domain has to define something.  For example,

MedicalSurgery.com – this would be generic.

CrazyMedicalSurgeryDoctors.com - no, this is what we call a vanity name.

Also, traffic.  We rarely include existing traffic as a factor in the acquisition of domain names but I have to ask…

If your domain name is getting 1,000 uniques a day why are you offering to sell us the domain for $200?

Right here you have just confirmed that you are full of the stuff your local farmer calls fertilizer.  The correlation just does not work.  Either (a) you have no idea how to generate revenue from a domain with traffic or (b) you think we will become so dazzled by the possibility of getting your traffic we will immediately charter a private jet to deliver a suitcase full of cash.

(The fact that you are most likely from the domain community leaves us to choose option B as the only choice)

7 day stats?

Why would anyone purchase a name for multiples of PPC revenue based on a 7 day history from a parking company?

If the domain has PPC value – show me a 3 or 6 month printout.  On a 7 day chart the revenue means nothing.  You have not been paid (so the clicks are probably not even verified) and it’s pretty easy to get your buddies to bump up the stats for a week by clicking your ads. 

We do understand some buyers want these stats (Although PPC value is of little or no value to us) so … when trying to sell your name do you have to sound like a used car salesman?

The buyers in the industry know what they are doing.

Would be nice to see some sellers do the same.

©2009 Newfound Names LLC. All Rights Reserved.

How much traffic does the name get?

From my experience (and we own some names with very good traffic) this question is one to avoid if you are a seller and your asking price is fairly low (under $50,000)

Some of you will say - $50,000 – that’s a lot of money.  Remember, I am not saying 50k is not a lot of money to you – I’m sure most people would be able to experience some great benefits having this kind of cash but it’s simply just not a lot of money to professional investors, corporations and end users.

Reasons to avoid providing this data are simple

#1)  All the daily auction forums – NameJet, SnapNames, Moniker, Sedo (for the most part), Afternic, BuyDomains – almost ALL listings provide no reference to traffic yet domains still command some high prices.  If a buyer wants the name they will pay for it. 

#2)  What incentive is there to provide a seller this information?  If they find you are making $1,000 a year from ABC domain but you are asking $30,000 – immediately most buyers will forget all about the keyword value in the name and say…wait….you want 30 years revenue – how about 7 times.

The ONLY time we would recommend providing data is to an END USER or for a sale of signifcant value.

The NUMBER OF VISITORS your domain gets can be a big part of their valuation and end users will generally never equate an asking price to a multiple of PPC earnings – (as they probably don’t even understand the PPC industry to begin with).  Their offer will factor in the number of “new customers” walking in through their door if they buy your domain – and believe me, the valuation per head is a hell of a lot more than a PPC ad.

Bottom line, selling a domain name direct should be no different than how the big boys are doing it.  The only time to provide user and revenue information is when you feel this data will help command a higher price – anything under $50,000 is simply not worth it.

©2009 Newfound Names LLC. All Rights Reserved.