Selling Domains in a Bear Market

First, I’m going on record to say the industry is in a soft market at the moment but by no means a bear market. Domains continue to sell every day and every week for good prices. Buyers are still looking for high quality keyword names that have (a) development value (b) traffic and/or (c) investment potential. The difference between today’s market and last year’s market is really not that much when you think about it.

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…..