.Info – we have a $1 Million Dollar Sale
By Alan on Aug 28, 2009 in Domain Discussion, Domain Values
A .info sells for 1 million dollars.
Amazing story where the buyer wanted the name for 3 years from the seller and only now both finally agreed on a price. With a seller having the cohonas to hold out and the buyer having persistence to get what he wanted.
Is this a true story?
No. but it’s a lesson in valuation for many of you fools. Every time a name sells for something more than what you think its worth the bandwagon starts where many rant and rave why this name can’t be worth that much.
It is quite comical to be honest.
Sure, I will jump on the bandwagon for those names bought BY domainers for sale TO domainers. This never-ending cycle is like the dog wagging the tail where 95% of investors have no idea what makes a good domain let alone what markup is realistic by selling only to domain investors. If you buy a name for $10,000 in auction (where 100 of the same people you are actually hoping to sell it to are in) how much do you really think your profit is going to be when you try and flip the name to the same people a few months later? Find price points lower its gets better but there is a cap for this kind of liquidity and a lot of risk.
End user sales are different – an “end user” here includes corporate buyers and even domain investors who have a real vision for development down the road (not some dream where he has NO experience in development today nor gains any knowledge as every day passes but those who are developing and simply acquiring to add to the to-do list one day). These people are actually end-users but participate in name trading/ selling – domaining would not be their sole activity.
When a domain is sold to an end-user the value only does one thing for most domainers.
It brings interest to the assets we all hold and love dearly.
More interest = More players = More Money = More buyers = More Value
Sometimes the press is great with 7 figure sales like Candy.com and sometimes its just a heartwarming story about how a guy quit his ugly day job to enter this industry. Stories like this help overcome the bad press about cybersquatters and validate the industry and these assets as a respectable way to make a living.
However the actually dollar value of a sale to an end user can not be correlated in value to similar domains.
We have many clients as end users and we never send out emails highlighting the amount of Google results, what names Frank or Kevin own that are similar (who the hell is Frank and Kevin most would ask), why an asking price of $10,000 is ok since Johnny sold one last week close to this.
All of this shit that many of you recycle to sell to one another doesn’t matter.
An end user will pay only what they think its worth to thier business plan.
Nothing more. Anything less is a deal.
Your only job as a seller is to find a price which you are happy and start there.
That target price should be based on your cost, your loss of value, your need for cash, your alternative outlets for sale and many other variables which are all outside and have no bearing of what Johnny’s similar name sold for last week.
This industry has grown pretty fast over the last few years but we are in an environment where a calculation for logical liquidity is sought after by most domainers, dynamics of what makes a good name is entirely changing with keyword development names finally getting the respect they deserve and parking multiples fading out.
The entire point behind this article is do not look outward for your price points – look within.
Everybody could have made another dollar if they held out 5 minutes longer or picked a 35 instead of 36 in Saturday’s powerball but real business is not made of what ifs – its made of what you do.
Use the sales reported to maybe find ranges if you have no idea what a name is worth to you but if its an end-user buying throw it out the window since 90% of the people you hope to sell this domain to will be domainers and those valuations are less.
We get in deal mode every time but I can tell you the most irritating thing behind any seller is having them quote the number of searches in Google or who owns similar names.
We know how much the name is worth to us to buy or sell.
If Frank, Kevin, Rick, IREIT or any of the industry names own similar – whopdef*ingdo.
Back to the $1miilion info sale.
If it happens (and it will one day for A DEVELOPED site which all you .info lovers will claim credit for having foresight which is crap since the power was in development not the name) then you need to respect the PR received, congratulate the two parties – since (a) the buyer was happy to pay and (b) the seller was happy to sell.
The name was worth that much since both parties walked away happy.
Any sale is a good sale.
Trying to find logical value in this industry if your only client base is domainers is like a dog chasing its tail.
They are all moody as hell and would rather buy in auction then buy direct.
You know it.
You are one.
David J Castello | Aug 28, 2009 | Reply
Excellent article. We paid six figures for Nashville.com in 2003(ah, those were the days) and never asked about traffic, stats, etc. We simply needed the name and knew exactly what we were going to do with it.
NY Themes | Aug 28, 2009 | Reply
that was a great bait headline:) but don’t do it too often
The highest .info sale looks like it’s around 50K, it might take a while to reach 1,000,000
you want to make a prediction?
Kevin M. | Aug 28, 2009 | Reply
Very nice post. The thing is, most domainers are not any form of a salesperson, and wouldn’t/don’t have the gumption to 1) hold out for what’s a rightful price for the product (dn) they’re selling, and 2) don’t take the time to know and understand what their products’ (dn) ‘true value’ is, as the commondity it is. Most just look at the roi they are getting for the little work and money they expended, and are happy to make more than they paid. What ever that be. Therefore they critique big sales based on their abilities, or lack of, to justify the ‘shortsighted salesman’ in them.
**If it happens (and it will one day for…**
Something you have wind of you’d like to maybe share??
michael berkens | Aug 28, 2009 | Reply
I agree effect post with an attention grabbing headline (you should work for the NY Post)
I disagree with you on this comment:
“”"If you buy a name for $10,000 in auction (where 100 of the same people you are actually hoping to sell it to are in) how much do you really think your profit is going to be when you try and flip the name to the same people a few months later?”"
As for flipping I have never done it, but I do think you can find a bargain in a domain auction against 100 domainers.
How could this be?
1. Everyone appraises domains differently.
2. No one can buy everything.
3. There are a lot of auctions.
These are just 3 of the reasons (there are more),you still can get a bargain even if none of the 100 of other domainers that had a chance to outbid you on a domain did.
As far as a .info domain or .biz domains, the day may come when an domain owner with a incredible domain, in such an extension, say like internet.biz, holds out for 7 figures and someone comes along and buys it.
Mike | Aug 28, 2009 | Reply
What do you think of these claims to appraise domains? Personally, I dont think they’re worth the bandwidth. Opinions?
Alan | Aug 28, 2009 | Reply
Domain Appraisals – I cant comment on those anymore .. it annoys me to see they still exist.
http://www.newfoundnames.com/domain-appraisals/domain-appraisals-wallpaper/
wones | Aug 29, 2009 | Reply
Over 1 Mil.
PeopleSearches.com
Chris Desouza | Aug 29, 2009 | Reply
And while we are at it, why can’t someone have the balls to speak out that a small percentage of high profile names sold are pre-negotiated, headline grabbing, domain value inflating price points. A lot less was paid.
Those idiots who come @ auctions and spend 10 times the values of those initial bids are the biggest morons of them all. Sure, some get bargains. Most of them are holding good names at inflated values with no-where to go.
Look at the stats of all names sold at auctions and care to see what those names are doing for their owners with a minority exception.
Danish K. | Aug 29, 2009 | Reply
This article is an eye opener for many Domainers.
Thanks for sharing this valuable information.
Regards
http://www.FMCG.us
India League | Aug 29, 2009 | Reply
Such an nice article by Alan. Beholding on good domains with developing them are the key to success!
Best of luck!
http://www.IndiaLeague.com
Teahupoo | Aug 29, 2009 | Reply
You definitely got my attention with the headline. I nearly spit coffee out sitting here on my condo balcony looking at the Gulf of Mexico this morning!!!
That said, I wholeheartedly agree with your assessment that basically beauty is in the eye of the beholder.
I just sold a small package of a couple of domains in a VERY tight niche industry that no one wanted to pay more than $300 for and I sold it to an END USER for $2800.
I also agree that the VAST majority of domainers have zero sales ability and that is where a lot of the big money is made. Anyone doubt that Rick Schwartz isn’t one of the best salespeople in the world?
Big corporations and advertising agencies are just now beginning to grasp the idea of using descriptive keyword domains to drive traffic to their main sites. Best Buy, Overstock.com, Amazon, YellowPages.com are just a few I can think of that I have found in whois searches.
If a company manufactures and sells ignition wiring sets what makes more sense and what is more marketable, ACMEAutoSupply.com or IgnitionWiring.com? This is a fairly obscure example, but their are billions of possible customers.
I hope that opens some eyes.
I personally feel that the domaining industry is about to see a revolution of sorts and that those who reap the benefits will be those with their eyes and their pockets WIDE OPEN.
Going to finish my coffee now and go snorkeling.
T
Alan | Aug 29, 2009 | Reply
Chris
I think you are missing the point.
” A lot less was paid”
All domains at some time had a cost of $35 or less – the cost has ZERO relevancy to the value. If we buy a name for $10,000 today that cost basis is only important to one person – us. $10,000 was the worth of that particular name to us but this value does not reflect nor even play a factor in determining how much a similar name is worth.
If a buyer wins a name in auction for $500 then he offers it to you for $5,000 who cares. Almost like asking the home builder how much the house cost to build. I know many people like this – I’ll give you 20% over cost, I’ll pay you twice what you paid for it.
Sorry, comparing value to cost is just a cheap mans game. A seller will sell a name based on what they believe the name is worth to them – a buyer will pay based on the same theory.
“Those idiots who come @ auctions and spend 10 times the values of those initial bids are the biggest morons of them all”
Does’t make any sense. An opening bid is a starting point to (a) be low enough to attract attention or (b) high enough to ensure the seller a strike point he/she wanted.
You cant define a good sale on multiples of an opening bid.
Teahupoo | Aug 29, 2009 | Reply
To quote one of my sales managers from my early days in the Automobile sales industry, “There’s an ass for every seat, and what makes a good deal is that it is perceived as a good deal by both the buyer and the seller.”
That is it in a nutshell. Other domainers may think a name worth reg fee while some entrepreneur with a vision and a plan may think the same name worth 100k. It is all relative.
T
Alan | Aug 29, 2009 | Reply
Mike,
I agree with you about finding bargains even when in auctions with a 100 other domainers. HomeLoans.net at 18k was one, we bought a name for $200 at BIDO and sold it within 48 hours for 20 times that to another domainer – one who contacted us.
There are many examples. My thoughts were more inline with how risky or tough this kind of deal finding is when you get to 5 figure ranges. A cost basis of $200 or $2,000 for a decent name holds a relatively liquid value if your market is only domainers (which many new investors are) but get to 10 or 20k the risk of securing liquid value for a quick sale gets higher.
I agree every domainer can’t own them all and many times miss good names in auction they would have paid more for a number of reasons – cash flow, time of day etc.
As always – you’re right
Ron Wells | Aug 29, 2009 | Reply
Great post! Keep bringing these eye-opening articles…which I find to be very thought provoking!!!
Mr. Joe DOMAINS Saladino | Aug 29, 2009 | Reply
WE should ALL UNDERSTAND that selling domains cheap UNDERCUTS and UNDERMINES the entire business we are in like a cheap prostitute!!! Everyone should network together and shoot beyond the stars concerning our asking price and stand firm to raise the stakes!
Joe “DOMAINS” Saladino
Alan | Aug 29, 2009 | Reply
Joe,
Your definition of cheap may be different than others.
That is why the logical part of domain valuations in this industry will be always be an endless search for answers. People can not band together to sell names at price levels since everybody has a different one. All a buyer and seller can do is find a strike price that makes them happy. What they do not need is to think or assume that if ABCdomain.com sold for $500,000 then ABCdomains.com is worth the same.
Every domain is unique, every seller is unique, every sale is unique on and on and on.
"J.R." Johnny | Aug 29, 2009 | Reply
Do in Google, Yahoo, Dogpile etc. a lookup for:
scientific domain appraisals
Although the website explains why domain appraising is nonsense, it ranks higher than most webs that promote appraising.
Let’s face it:
People stand for their own profit, each setting forth their own vision and tactics.
It is all just a matter of belief.
But one thing is sure:
To work under the price makes us all slaves.
Money must roll.
We buy and sell what we want, to who we want, at the highest price we can get.
Just good business.
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