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information A Value-Added Approach To Domain Names

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Great domain names sell themselves.

But that does not mean that there is no role to influence the probability of sale, or to add value.

Not Just Speculators

I sometimes hear those outside our field refer to ‘domain speculators’. That always rubs me the wrong way. While I understand there is a speculative side of domain names, I think emphasizing only that does a disservice to our industry.

True, we hold many names, and only a small percentage will sell in a certain time period. Today there are, according to Dofo, about 26,800,000 domains actively for sale, while NameBio recorded 42,900 sales of $500 or more in 2021. Even if 80% of sales above $500 are not in NameBio, only about one out of every 125 domain names actively for sale will sell in one year.

The difference between acquisition cost and selling price is usually substantial. It needs to be, simply because most names will not sell. It is a speculative market, but are we simply speculators?

Do we call emerging artists, who create many pieces of art, only a few of which may ever sell, but will sell at much more than their supplies cost, speculators?

Or for that matter, the small art or antique gallery owner, do we call them art or collectable speculators?

What about those who invest in startups, are they simply startup speculators? Investors are rewarded from the few startups that prosper, and lose on the larger number that fail.

Domainers may create an original name never before imagined.

They may construct a clever word combination that expresses a powerful idea.

They may see the hidden value in a name long neglected.

They may track down the private owner of an unused name, and bring that name to market.

Domain investors present names for sale in an orderly way, and their investments help make the entire aftermarket survive.

Surely we are not simply speculators?

Just as the art gallery can add value to displayed works, are there simple ways for domain investors to add value?

Value-Added Marketing

The concept of value-added marketing is well known in the business world. Investopedia define it this way:
The term ‘value-added’ describes the economic enhancement a company gives its products or services before offering them to customers. Value-added helps explain why companies are able to sell their goods or services for more than they cost to produce.

While value added can refer to product or service features, or simply be dependent on brand perception, it can also be derived from a better purchase experience. For example, the same artistic work may sell for more in a gallery where works are effectively presented, or the same furnishings may sell for more in a store with friendly and helpful staff.

An important aspect is to view the purchase experience from the potential customer’s perspective. As Investopedia explain
Companies constantly struggle to find competitive advantages over each other. Discovering what customers truly value is crucial for what the company produces, packages, markets, and how it delivers its products.

Oksana Tunikova published an instructive article Value-Added Marketing Done Right: Principles to Learn By Heart
We’ve stepped into the new age of marketing, an age where customers are always put first, and added value is considered the new normal.

Simple Ways To Add Value

Consider the experience from the perspective of a potential client for one of your domain names. If it is a startup or a small existing business, odds are they have never purchased a domain name from the aftermarket.

They have probably heard of GoDaddy, but may not be familiar with other marketplaces. Odds are they will feel nervous, not wanting to overpay, or, worse, buy but not receive the name.

They probably have some sense of the importance of a name, but possibly have not valued the worth of the name to their business in a deep or quantitative way.

So what are some simple ways that you can make the transaction experience better? Beyond that, are there ways to help them feel a confident attachment, almost an emotional attachment, that this name is a good fit for them?

Here is a checklist of easy things that might gently edge the customer experience in the right direction. Not all will be practical for all sellers and names.
  1. Google Search for Name I once read, perhaps at SquadHelp, that a surprisingly high proportion of those who end up buying a name start from a Google search. While as domainers we would first try the domain name in the URL, that is not how many buyers approach it. That means that if you have a domain say EXAMPLE.TLD if someone types {EXAMPLE domain name}, or something similar, into a Google search, you want your lander to rank somewhere on page one of search results. Try it with some of your domains – I think you will be surprised that more often than you might think you already have high search placement. It depends on the lander type and what description words have been used.
  2. A Functional Attractive Lander First impressions matter, and whether they type the domain name in an URL window or click on a link from Google search, you want a functioning lander that makes a positive first impression.
  3. Make BIN Purchase Easy Generally speaking, when I want to buy anything, I don’t want to go through sales people, or wait for a price quotation. I just want to be able to research the purchase online, and then instantly make the purchase. I think many domain buyers, at least for names below $2000, feel similarly. I see merit in a lander with a price given and a prominent buy it now button. Sure, there are exceptions, including most high-value names.
  4. Support Those Who Want Personal Assistance But some purchasers will either have questions they need answered before they commit, or simply want to be assured by talking or chatting with a real person. Does the lander you use support this personal interaction?
  5. Include A Logo If selling a name intended as a company brand, I think a high-quality logo, even if many purchasers will not use it, adds a little bit of value, and may make the difference. For an overworked startup owner, a domain name that includes a logo means one less thing to worry about right now.
  6. Include a Tagline Some names can be used in many ways, but if the application of your name is fairly obvious, why not invest a bit of time in coming up with a tagline for the name. Brainstorming a tagline may help you better understand your name’s potential, as well as help showcase it for the potential buyer.
  7. Emotional Attachment Reflect on automobile commercials. For the most part, they don’t provide specific information, but rather help create a positive emotional engagement. The goal of the advertisement is to help you imagine yourself with the vehicle. This is not as easy with a domain name, but is there a way with a visual or video to create a captivating experience? Anything you can do to help the potential buyer see the name as a fit to their needs is important.
  8. Trust Probably the most important single factor, is that the buyer feels confident that the transaction will be smooth and trustworthy. When we have the same name listed multiple places, we have all seen purchasers who go somewhere other than the lander or lowest price, presumably for trust reasons.
  9. Information When I make a major purchase, I want detailed information. If there are things the purchaser should know, such as a premium renewal, it is best to provide that up front. Also, links to basic information such as how the transfer will work, or how long a purchase typically takes to complete, can make the difference.
  10. Payment Options A big part of auto sales is making payment options easy. Some startups will not be able to pay the up-front total price on a quality domain name. A payment plan that is easily selected, and with terms clearly and completely described, can make the difference of a sale or not.
  11. Add Some Time When apartment vacancy rates were higher, some years ago, it would not be uncommon for those renting apartments to offer incentives such as first month’s rent free or cash back on signing a lease. A domain name that needs to be renewed in the next month or two can give the potential buyer the wrong vibe. Why not have at least a year plus of prepaid registration? It’s like including a full tank of gasoline with an auto purchase. If in negotiation, you might want to offer even more years to help solidify the deal. The cost is minor compared to the retail price of a quality domain name.
  12. Professional Touch If you have the opportunity to interact directly with the potential purchaser, make sure you are professional, positive and helpful. Think of purchases you have made and felt great about Try to emulate what that sales person did for you. Focus not on the name, but the potential buyer and their objectives.

Other Ways To Add Value

I restricted the above list to relatively simple things, most of which can be accomplished through marketplace and lander choices. For a few names, you may wish to consider additional ways to add value, such as:
  • Include one or more social media handles that will transfer to the domain name purchaser. Note that most social mead terms of service do not permit directly selling accounts, however.
  • Lightly develop the name to begin the process of SEO. I think there can be danger, however, as it may narrow application of the name, or if poorly done can be a negative.
  • Include related names For example, both the plural and singular, British and American spelling, the name in multiple extensions, or matching .com and new extension forms. There are potential negatives, though, as it might seem to complicate the process or shake confidence in the fit offered by the primary name. This article on Holding pairs of related domain names may be helpful.
  • Offer after-purchase support If dealing directly with the purchaser, you could offer 30 days of support to help with things such as choosing a hosting provider, getting the name pointed to web hosting, etc.
  • Money back guarantee A few big sellers offer a 30 day return period on names. While one needs to safeguard your interests, this could help build confidence and trust. A low monthly payment plan can also achieve the same thing.

More Information

In addition to an effective lander and presence in search results, an earlier NamePros Blog article considered the many ways that people might discover your domain name, including being in the registration stream.

A number of aspects covered here are related to domain name presentation. Is Domain Presentation Important? was covered earlier in the NamePros Blog.

More narrowly, this article poses 16 questions to ask when selecting a domain name lander, while a visual look at some domain lander options shows you some of the main alternatives.

Is it possible to have too many, or too few, choices on your domain name lander? Are multiple places to buy good? What about both buy-it-now and make-offer?

When discussing a name with a potential purchaser, keep in mind who you are talking to. Think from the perspective of the client’s needs.

The topic of matching social media accounts was covered in this NamePros Blog article.

Many aspects of adding value are really naming as a service, a topic considered in the NamePros Blog in 2020.

The NamePros Blog considered in detail the topic of domain name payment plans in 2019. While the available options have evolved since that article was written, the principles remain relevant.

Last year Eric Lyon commented on the topic of domain development and the value it may add, or subtract, from a domain name.
In short, developing a domain can hurt a domain forever or increase its value and authority. It can be a tightrope walk at times trying not to tip too far to one side and lose balance.

Recently the NamePros Blog looked at ways major sellers optimize the buying process – see how the big sellers do it.

At the end of the day, the quality of your domain name will be the dominant factor in whether it sells or not.

That said, consider the analogy of real estate. If all available real estate was simply on a list with the property location and price, no other information, would property sell as effectively? Domain names can, and do every day, sell by simply being on a marketplace list. That does not mean that we can’t edge up the probability of sale, or the price, through small measures.

I urge readers to add their own ideas for adding value to the domain name purchase experience.
 
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The views expressed on this page by users and staff are their own, not those of NamePros.
Thank you for the fine article, wise man.
 
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@Bob Hawkes , Thanks for another helpful article,

You are thinking in the right direction and have presented many good ideas here, but I believe that what you are suggesting should apply more to platforms that provide domain sales landers rather than the domainers themselves since its more cumbersome for domainers to present more than a handful number of their domains in a value added way as you have described.

For the high commissions that some of the domain marketplaces charge they really need to do more to increase the chances of our domains selling for better prices by enhancing their sales landers in a way that adds more value to our listings.

Because of the sheer number of domains that are for sale this will only be possible in mass scale if the major domain marketplaces bring in the AI and Automation into the fold and make it all a seamless process to provide all the value added enhancements that you are recommending here.

IMO
 
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Thank you Bob, it was an interesting article
 
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Great domain names sell themselves.

But that does not mean that there is no role to influence the probability of sale, or to add value.
Hi

if,
you add more value to a name that's already great on it's own, then doesn't that increase price
and...
if you increase price, doesn't probability of sale decrease as well?

imo...
 
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Thanks for your comments. I do follow your reasoning as logical, but don't think that is only interpretation.
if, you add more value to a name that's already great on it's own, then doesn't that increase price
Would depend on 'already great':xf.smile: I guess, but even some very good names can take a long time to retail sell. One might argue that the increased value, through a better buying experience along the lines the article suggests, is being primarily applied to increase chance name will sell or speed of sale, rather than increase price. I think it could be either way.

if you increase price, doesn't probability of sale decrease as well?
Clearly in some extreme sense price influences probability of sale. Like a great name with a price of $100 million is unlikely to sell. If I have essentially any 4L .com and price it at $100 I can probably have an instant sale. But for smaller changes, not sure.

I've been trying to think of some way to check whether at the moderate end of the market whether a name at $4000 probability of selling would be only half as much as same name at $2000. I don''t know. But if we knew for sure, then we could optimize pricing. The big places, like BD and HD must do testing and adjust prices accordingly, maybe?

Thanks again for the thought-provoking questions.

Bob
 
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I believe that what you are suggesting should apply more to platforms that provide domain sales landers rather than the domainers themselves
Thank you for your comment, and I agree. We do, however, have control over what places we list, and influence a number of the items that way. Some places have landers with phone number and chat, some allow a logo as part of package, some allow payment plans, some have links for information, some allow us to include something like a tag line. I guess that is more what I have in mind.

I totally agree that the field is ripe for someone to use strong AI to make matching buyers and names far more effective than any of the current marketplaces.

Thanks again for your contribution. Lots to think about.

Bob
 
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Great article, as always,thank you Bob.
 
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Thanks Bob...another great article with useful information and thought provoking insights.
 
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Thanks for your comments. I do follow your reasoning as logical, but don't think that is only interpretation.

Would depend on 'already great':xf.smile: I guess, but even some very good names can take a long time to retail sell. One might argue that the increased value, through a better buying experience along the lines the article suggests, is being primarily applied to increase chance name will sell or speed of sale, rather than increase price. I think it could be either way.


Clearly in some extreme sense price influences probability of sale. Like a great name with a price of $100 million is unlikely to sell. If I have essentially any 4L .com and price it at $100 I can probably have an instant sale. But for smaller changes, not sure.

I've been trying to think of some way to check whether at the moderate end of the market whether a name at $4000 probability of selling would be only half as much as same name at $2000. I don''t know. But if we knew for sure, then we could optimize pricing. The big places, like BD and HD must do testing and adjust prices accordingly, maybe?

Thanks again for the thought-provoking questions.

Bob
Hi

basically, for domains that are already great, time is/was the "value-added factor" for them.
as, over-time or over the years, such domains value increased.... on their own.

of course, this happened as the creme of crop became/becomes depleted
and with each "land-rush" from or in the past, present or in the future", the cycle will continue/

so, i'd say as said before, that time is best value, as one waits for their domain to mature.

then, there's a totally different discussion, on when is best time, to sell.
and all of that, is a variable that can affect total reported sales, overall or for specific categories.

imo...
 
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Speculator (noun)

1. a person who invests in stocks, property, or other ventures in the hope of making a profit.
"financial speculators exploiting small changes in markets to make money"

I often refer to myself as a Domain Speculator, because my strategy fits the definition. I invest in domain names in the hope of making a substantial profit. As you highlighted in your post, most URLs will NEVER sell for a profit, and when I say most, I mean 90% or so.

Still, thoughtful insights.
 
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Great article @Bob Hawkes. How about developing your own landers, a page each for every domain, fully seo-optimized? Will this work better than the usual landers on domain marketplace platforms?
 
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Great info. Thanks for sharing.
 
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Thanks for the insightful article.
 
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"Value add" sentiments develop slowly and are mostly, at the core, based on the perceived value of credibility and credentials. People can hate on lawyers and bankers too, but they still realize that these crafts exist based on demand for their services and that these professionals infact do carry valuable expertise when push comes to shove. Partly and maybe mainly because it can not be refuted that these are sizeable industries with significant history.

For domain aftermarketeers, sellers and brokers, there is none such basic public acknowledgment. One big reason is that a powerful anathema exists that undermines establishment of value in the public eye. The TM agenda which pre-emptively labels all of the aftermarket as illegitimate regardless of the merit of such sweeping claims. In all honesty some sellers also sabotage credibility all on their own by trading directly on the value of TM:s.

I also believe that this is a very self-fulfilling prophecy. Many have stopped trying to be accepted or understood because of the difficulties mentioned. However, I also believe that steadfast and honest engagement in public discourse and business events quickly can result in revised opinions. Some of the points in this article should be taken to market that way.

I also, personally, see great signs of the need for the aftermarket professional, in all fields related and tied to it. Buyers, sellers, marketplaces, branding agencies, brand protection agencies, domain management agencies, law firms, registrars, registries. Aftermarket-specific expertise is permitted, appreciated and infact needed for all of these entities to find a working, sensible and reality-based approach.

Thanks for the article!
 
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How about developing your own landers, a page each for every domain, fully seo-optimized? Will this work better than the usual landers on domain marketplace platforms?
Certainly that gives the ultimate control to optimize uniquely for each domain name. It would not be trivial to do well, although there are services that make it easy to do at some level.

I think the existing marketplace landers have choices which users should carefully consider.

Thanks for your comment,

Bob
 
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Thanks for your detailed comment, @trelgor – it is great to have your expertise as someone in this business long term. I agree 100% about credibility and credentials and it being a low process. Also, your later comments about some, outside but even inside, causing credibility of domain aftermarket professionals to suffer.
"Value add" sentiments develop slowly and are mostly, at the core, based on the perceived value of credibility and credentials.
I would like to see domain names including all aspects taught in university business schools. Or perhaps even written about more regularly in the business press.

Thanks again.

Bob
 
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So many names are personalized, and almost unintelligible.
This aside I have created emoji handles at Blogger and Tumblr (amongst the first). The idea is once some of the hundreds of millions using the platforms discover this. People will investigate and word of my domains will circulate.
Once they do, it will be hard to forget.
♻️ At TUMBLR
= Recycle™️.com (see emoji domains Wikipedia for more ℹ️).
 
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While adding value is vital to everyone's bottom-line in every industry. Adding value is especially critical for industries, like the domain name trade, where 95% of the inventory goes unsold year after year. And, to make things worse, the 'domainer' portion of the percent that does sell is steadily shrinking as registrar algos snatch-up more and more organic premium names before they can be hand-regd.

Sadly, the value-added domainer ship sailed long ago when pump & dump domain spam monetization models (parking, etc.) took over and virtually all domain inventory got banned from search. In short you can't add value when the main use case is to extract the name value, then dump it.

The old domaining model is withering on the vine. The world won't miss it.

Like with any unpopular business practice, adding value in the domain industry will require a rebrand... and a better business model. As "the industry" is too fragmented individually to collectively devise a game plan, I'm working in my own way to enhance the business model and increase value. If it goes well you'll hear about it. If not, you likely won't.
 
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I'm working in my own way to enhance the business model and increase value. If it goes well you'll hear about it. If not, you likely won't.
Look forward to hearing more, if it becomes the right time to share it.

I think creative minds should be able to come up with some scaleable solution that adds, rather than subtracts as you mention, to net value of the domain name, and ultimately significantly enhances sell-through rate.

Thank you for contributing to the discussion.

Bob
 
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another Greatful Post, thanks so much
 
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The old domaining model is withering on the vine. The world won't miss it.

Thanks for that post, eyedomainous.

When I began investigating domaining as a source of income, I was staggered to discover that around half of all registered domains are just being warehoused in the hope of a sale. Also to experience this first hand: whenever I had an idea for a domain name, in most cases I found that others had got there before me and registered it in most of the interesting TLDs, but also that in most cases, the domains weren't actually being used.

It's ironic that people are discussing whether .xyz "will fail". The whole domaining sector is failing: it is failing businesses, because the prevailing domaining business model prevents businesses from extracting value from domains. Imagine if half of all new cars manufactured were snapped up by car dealers and left languishing on their lots for years, unsold. Or half of all plots of land zoned for housing were snapped up by "non-developers" who just left them untouched for years, waiting for someone to come along and pay what most people consider an exorbitant price. Imagine if half of all artworks, as soon as the artist had completed them, disappeared into a vault and didn't reappear until, on average, fifty years later (equivalent to the sell-through rate of 2% I often hear quoted for this industry).

Would people describe any of these sectors as "successful"?
 
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Just a plain "thanks" is not really sufficient for your analytics and insightfulness, in every post. You manage to pull together many different strands of thought together, in order to provide us with a fuller picture, which we can all use for promoting our own domains in a better way. From the bottom of my heart, I thank you.
 
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