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Bob Hawkes

How Are Investors Pricing Their Domain Names?

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By Bob Hawkes, Oct 22, 2020
  1. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    A domainer can ask any price he or she wants for any domain name. Each domain name is different, so looking at what prices others ask will not inform how any particular domain name should be priced. However, since there are frequent discussions around prices being too low or too high, I thought it would be interesting to look at the distribution of buy-it-now prices.

    With the Advanced Search feature of Dofo, it is easy to search for domain names with any set of characteristics, such as extension, length, pricing, etc. Dofo covers the major marketplaces, providing a large sampling of priced domain names.


    Buy-It-Now .COM Prices

    I first looked at .com domain names, and restricted the search to those with 4 characters or longer, representing the sort of names most common in domain investor portfolios. Had I included 2 and 3 character names, other than a few more high-price names, the overall distribution would not be much changed. I also excluded domain names with hyphens or numbers from all of the results presented here.

    I repeated the search multiple times with different price bins, obtaining the results shown below. There were about 12.6 million priced .com names in this analysis.

    COM_BIN.png

    Here are some of the features of the distribution.
    • 61.6% of the .com names were priced between $1000 and $4999.
    • Only 2.2% were priced at $25,000 or more, and only 0.2% above $100,000.
    • About 13.7% of the .com names were priced at less than $500.
    The results were much as I expected, although the drop-off at $5000 was somewhat more dramatic than I might have guessed.


    A Look At .ORG Prices

    It is generally felt that .org domain names have lower prices, so I did a similar analysis for .org.

    ORG_BIN.png

    It is true that the drop-off in .org domain names priced above $5000 is somewhat more dramatic than for .com.
    • 78.1% of the .org names were priced between $250 and $4999.
    • About 2.4% were priced at $25,000 or more, not very different from .com
    • Only 0.2% were priced above $100,000.
    • About 10.6% of the .org names were priced at less than $250.
    The results were more similar to .com than I expected, although there are fewer .org priced $5000 to $25,000.


    What About .CO Pricing?

    The .co extension has found increasing use among startups and other businesses as an alternative to .com. The distribution of .co domain name prices is shown below.

    CO_BIN.png

    The .co results show more domains priced at the lower levels, although some are priced to $75,000 and a few beyond that.
    • 71.7% of the .co names were priced between $250 and $4999.
    • About 1.2% were priced at $25,000 or more, somewhat less that we saw for .com and .org.
    • About 21.2% of the .co names were priced less than $250, substantially more than for .com.
    • In fact, 12.1% were priced less than $100.
    The results show a wide distribution in prices below $5000, with relatively few priced above that.


    Prices of .IO Domain Names

    The .io extension also has strong adoption by startups. As .io domains are relatively expensive to hold, I did not know if that would influence the prices sought. The distribution of .io domain name prices is shown below.

    IO_BIN.png

    The .io results indicate a fairly wide distribution in prices, although fewer lower price names compared to .co.
    • 57.8% of the .io extension names were priced between $1000 and $4999.
    • Of that, 41.5% were priced between $2500 and $4999.
    • About 7.5% were priced at $25,000 or more, significantly more than for .com, .org or .co.
    • About 6.1% of .io domain names were priced less than $500.
    The results show most price their .io names in the $2500 to $5000 range.


    How Should .REALTY Names Be Priced?

    During the summer there was a very good promotion on first year registration of .realty names. However, the renewal cost is very high, so most domain investors will try to sell the names within the first year. Since the sales record in the extension was minimal, and very few were even listed for sale in the aftermarket prior to the promotion, it was difficult for investors to know how to price .realty names.

    I did the analysis for .realty extension names a couple of times, about two weeks separated, and there were dramatic changes. I think investors are still trying to decide on pricing levels. The following analysis is based on 6640 names listed for sale the day I did the analysis.

    REALTY_BIN.png

    The .realty results indicate most are priced below $2500, although with a few much higher.
    • 67.8% of the .realty extension names were priced between $750 and $2499.
    • Only 1.1% were priced at $10,000 or more.
    • Just 0.9% were priced less than $250.
    • There seems a fair amount of value-pricing to promote a quick sale, or perhaps recognizing that many clients may be small firms. There were 12.0% of .realty domain names priced between $250 and $499.

    Do-It-Yourself Price Distributions

    If you are interested in price distribution for some other extension, or domain length, it is easy to obtain results for any type of domain name.

    Here are the steps.
    1. Go to Dofo, and click the Advanced Search wording just below the search bar.
    2. Click the Extensions button and check the one you want. If you do not see it explicitly listed, just type it in, without the preceding dot, and it will appear and check it. If you do repeated analyses, Dofo keeps any previous extension selections, so be sure to clear that before you start.
    3. Under Sale Type select Domains For Sale and Buy Now Domains.
    4. If desired, under Length set a minimum and maximum number of characters.
    5. Under Price set the minimum and maximum.
    6. Click the Search button, and it will show you how many domain names for sale were found with that characteristic.
    7. Repeat the preceding two steps for each price range you want to check.
    Through the More Filters options you can further restrict the search, for example to look at pricing on a particular marketplace. That is also how you set whether you want to include names with hyphens or numbers, or in a specific domain name creation date range.

    Don’t be overly influenced by prices others are asking, but if you want to find out how typical your pricing is, it is easy to find out, thanks to Dofo. Keep in mind that these are asking prices, not sales prices.

    Wonder what names are priced $25 million and up? Here is the list! Although many of the top ones seem listed by a single seller on Flippa, and have now been taken down.
     
    Last edited: Oct 22, 2020
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  4. Bob Hawkes

    About The Author — Bob Hawkes

    Domain analyst, writer and informal educator, with particular interests in domain name phrases and non-business uses for domain names. I am a risk averse domain investor who only invests modest amounts in a variety of extensions and niches. Don't hesitate to contact me - I like to help!

    This is Bob Hawkes's 62nd blog post on NamePros. View all blog posts

    Home Page:
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  5. Comments (36)

  6. NickB

    NickB Wales.org VIP

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    Thanks Bob

    People are listing their domains and asking for over 2 billion?

    absorbent ....///// xyz

    is listed for sale at $2,147,483,647

    That can't be right surely......or is it?
     
  7. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    I think a single seller has a lot of the truly high prices, mainly on Flippa, and they have, in many cases, been taken down by Flippa. But yes, a lot of $1 million + prices still up for names that seem to me, shall we say surprising :xf.grin: to have those prices. My link to the high prices was just to show that anyone can indeed ask any price, although some marketplaces place upper limits. An interesting question is should marketplaces have some mechanism where listings above a certain level are reviewed.
    Bob
     
    Last edited: Oct 22, 2020
  8. BradWilson

    BradWilson Upgraded Member Gold Account

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    Another great post so thanks @Bob Hawkes

    I especially like the .Realty price distribution because I'm focusing hard on them right now. Of course I'm adding my own twist to it which is sort of like adding a fuel additive :)

    I think the two highest peaks show the "best" pricing for each extension.
     
    Last edited: Oct 22, 2020
  9. Samer

    Samer Top Contributor VIP

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    @Bob Hawkes

    you are NP’s best

    Prefer “88” method; Make sure BIN end in “88”
     
    Last edited: Oct 22, 2020
  10. Keith DeBoer

    Keith DeBoer BrandableInsider.com PRO VIP ICA Member

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  11. The Durfer

    The Durfer Top Contributor VIP Gold Account

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  12. TauseefKhan

    TauseefKhan Established Member

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    An exemplary analysis of selected TLDs done meticulously. Thanks
     
  13. GreatBrand.in

    GreatBrand.in Established Member

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    Very interesting and in-depth analysis as always from Prof. @Bob Hawkes Congratulations and many thanks!

    The most surprising correlation which I can observe here is the pricing pattern of .com and .io. This shows how domain investors (not end-user for sure) are pessimistic about .com and bullish on .io.This trend is similar to the subprime crisis or any bubble share / real estate market has ever witnessed in the past where brokers have created a hype.

    A perception game based on solid digital marketing strategy creating hype on a particular extension resulting both (.com and .io extension) almost at an equal level however in reality at the end-user market the truth is totally different where .com still command a premium. We have recently witnessed how an owner of .io went to WIPO to claim .com of the same name and lost there miserably. Warning sign ahead!
     
    Last edited: Oct 22, 2020
  14. Mister Funsky

    Mister Funsky Top Contributor VIP

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  15. garptrader

    garptrader Top Contributor VIP ★★★★★★★★★★

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    Investors tend to price most domains high $XXX to $XXXX while most buyers have a budget of $XX to low $XXX. Thus, portfolio turn is abysmal. Imagine what would happen to any electronics retailer with a 1% annual portfolio turn.
     
  16. Vito

    Vito Domain Names Matter VIP Trusted Contest Holder ★★★★★★★★★★

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    Incredible research and incredible article once again Bob.

    Thanks for all the hard work you put into your research and writings

    You are a true asset to the domain community.
     
  17. RogueWriter

    RogueWriter Top Contributor VIP ★★★★★★★★★★

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    Mr. Hawkes, you continue to add great content to namepros. Thanks for the article, very interesting.
     
  18. Dooner888

    Dooner888 Upgraded Member Blue Account

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    Fabulous information friend Mary thanks Bob.
     
  19. passini

    passini Established Member ★★★★★★★★★★

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    Nice info, thanks.

    The drop-off at $5000 I think is normal because makes more sense to list these domains just with a make offer option as it is more rewarding to negotiate a price. A quick "impulse" purchase is unlike to happen above the mid xxxx level
     
    Last edited: Oct 23, 2020
  20. unmark

    unmark Established Member ★★★★★★★★★★

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    Absolutely positively top stuff. Thanks a lot Bob, it's a very progressive approach, every next article is better than the previous one.
     
  21. rcs1973

    rcs1973 Established Member

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    FOOLISH Domainers!!!!!!!!!

    61.6% of the .com names were priced between $1000 and $4999.
    Only 2.2% were priced at $25,000 or more, and only 0.2% above $100,000.
    About 13.7% of the .com names were priced at less than $500.
    For dot com, sheesh! Reevaluate your pricing $$$$$$$$$$

     
    Last edited: Oct 23, 2020
  22. lock

    lock DomainUsed.com VIP

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    A lot has to do with turn over if your not turning things over tend to drop pants on price but when the customers are coming to you you take a stand.dig heels in hold out for your money.
     
    Last edited: Oct 23, 2020
  23. privatne

    privatne Established Member ★★★★★★★★★★

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    Bob nails it again!
    You inspired me to a small exercise about .com domains with 5-15 characters:
    saleprices.jpg
     
    Last edited: Oct 23, 2020
  24. garptrader

    garptrader Top Contributor VIP ★★★★★★★★★★

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    Rick is spot on- if you see what companies actually spend on IT ptojects, Google Adwords, SEO services, attorneys, business travel, executive bonuses, or even the company picnic or Christmas party, you realize that it is absurd that an end user should think they can obtain a brand to promote their business for $25. But in the end that is what they often do.

    If we go to an electronics store looking for a cell phone, there are probably options starting $50 while high-end phones might sell for over $1000. What do most people choose? A salesperson can probably list a dozen reasons why the higher-priced phone is better but in the end most people migrate toward the lower-cost options.
     
  25. twiki

    twiki Top Contributor VIP Gold Account

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    I must respectfully disagree, in the line that your comment puts all eggs in one basket and makes a giant omelet out of it.

    There are several market segments / tiers that move differently. Actually 3 of them. There is the "market" range, the "retail" range and the "top payer" which is something only a single buyer will likely ever pay on the lifetime of a domain. See sales of @AbdulBasit.com for such example of top payer sales.

    The market range resides typically in the $100-$300 range. This is what fits most budgets for individuals, wannabe entrepreneurs and very small firms. Your comment refers to this, and it is correct in this respect.

    There is also the corp range. Companies can afford paying a few thousands for a great domain name with no sweat. But obviously there is a much lower buyer mass here. However, domainers prefer to price things in the 1K-5K range most of all. Do you know why? Because otherwise it's a losing game. You have to wait on that particular corp that pays for the name in the xxxx range at least, because otherwise you lose so much on renewals and the initial investment that you will not ever break even. Anyway some corps are cheap and look for hundreds. And some SMBs stretch their budget towards $750 or 1K but they lose breath above that. For obvious sane reasons.

    There is a winning strategy for each of these 3 tiers, or actually several. But as a straight blanket statement it is not a valid one.

    Edit: And there's also the domainer clearance /wholesale range which is in the xx mostly, just mentioning it although I see this as a separate thing.
     
    Last edited: Oct 23, 2020
  26. Mytz.com

    Mytz.com Top 4L [email protected] ieie.com CuTu.com NeSu.com KKiK.com VIP Gold Account

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  27. lock

    lock DomainUsed.com VIP

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    He is just trying to lift the prices like we all should.
     
  28. charrisg

    charrisg Established Member ★★★★★★★★★★

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  29. Ntmt

    Ntmt Top Contributor VIP

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    Thanks Bob for the report. I find it interesting to compare it with sales prices.
    Here is slide from Namescon 2018 Godaddy sales report.


    upload_2020-10-24_22-14-24.png
     
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