99% of businesses spend 10 bucks on a domain?

[Fuadiansyah]

I was reading a post Raymond has written earlier today and snoopy made an interesting/valid remark: that 99% of businesses spend 10 bucks on a domain.

Not sure what the exact percentage is but yep, 99% seems about right.

I think this is one of the most important lessons we need to keep in mind: domainers have to stop over-estimating the appetite of end users for domains.

Yes, some end users gladly pay a premium for a high quality domain.

But they’re a minority.

When reading comments on blogs and forums, I frequently notice that end users tend to have a “Holy Grail” aura in the eyes of many domainers.

As if end users are a horde of millions of rich people, with each person holding a huge bag of money in his hands and just waiting for the first opportunity to throw all of that money at a domainer… I wish that were the case

Realistically speaking though, I think it’s time for a cold shower.

We need to understand that:

1) Most end users aren’t willing to pay a premium for a domain

2) Out of the minority that do, most of them are only willing to pay very small amounts for domains

3) Out of those that are willing to pay a decent amount for a domain, most want dot coms

4) Out of those that want dot coms, a minority are willing to settle for a popular/next best thing TLD such as dot net or dot org

5) Out of that minority, once again only a minority would be willing to ultimately settle for a new gTLD

… it’s very important to understand this state of affairs.

I mean look at some of the big portfolio holders, they have 1-3% annual turnover rates. That’s it. Then look at their average sales prices as well… not exactly amazing.

Being a good domainer isn’t easy and in my opinion, being brutally realistic is a must.

It might suck, but it’s a must.

And the reality is that, unfortunately, end users tend to be more elusive than the average domainer thinks.

Source: http://domainingtips.com/most-peoplecompanies-hand-register-domains.html

If the data correct, so it means mostly transaction in domaining world are only between domainer-domainer...

 

[todaygold]

If the data correct, so it means mostly transaction in domaining world are only between domainer-domainer...

It sounds right to me. Most people not in the 'domain world' could care less about the domain name and definitely don't want to spend a ton of money on one. A new startup business, where the owner is already taking money out of their own pocket, do you think they really want to spend $3,000 on a domain instead of investing it in the business? Of course not. Plus, most people search for a business with a search engine these days anyway...so if a startup would have to pay $3,000 for 'KatesCandy.com' vs paying $10 for 'KatesCandyNY.com', they are going to choose the $10 one and people will find them through a search anyway.
I've even seen a number of startups use urls like 'xyz.wix.com'...so if they aren't even willing to spend $10 for a regular domain, you better believe they aren't going to spend thousands for a 'premium' one!

 

[garptrader]

The ratio of aftermarket purchases vs reg fee purchases is probably more like 500 to 1. With a little experience it is not difficult to do a search on Google, Bing, Facebook, Youtube, Twitter and find POTENTIAL end users for a domain name. However, when you find that the potential end user is using a reg-fee quality domain or a social media account, you will usually find they have no interest in paying a premium for your domain name. They are doing just fine without your name - even though their domain sucks.

Domain sales reports give the misleading impression that there all these thousands and thousands of companies out there just waiting to pay you a fat premium for any domain you acquire. The reality is aftermarket sales are rare (perhaps with all the TLD options available now less than 1% of industry inventory).

 

[urlurl]

And i bet 1% of businesses succeed, lol

 

[iAchilles]

99% of businesses think a domain should only cost $10. This is probably a more accurate statement. In examples of end users using crappy domains. I agree, they're unlikely to ever contact you to upgrade if they're a small business. The only hope of making a sale via outbound is if the name is priced to sell ($xxx).

There's different reasons why a business might consider buying a name, if a name can add value that you can clearly spell out and back up with data, you've got a better shot at making a sale. No business will be interested in buying a pet rock.

99% of end users gasp when quoted 4 figures and above.

 

[VaibhavA]

I believe, things are changing fast. If those stats are correct, its good news for domain investors.

 

[garptrader]

This is my primary issue with new TLDs - yes many sound cool just like my .TV domains. But we are not at a point where most end users view domains as something worth paying a lot of money for. Most view domains as an $XX item. When a domain is priced $XXX or beyond it is just like trying to sell a pair of running shoes for $799 or $5000 - who does that? When end users change their view towards domain names and we see portfolio turn in .COM skyrocket and portfolio turn in .Net and .CO and .TV and .Org mushroom, then we may also see a pickup in some of the new TLDs. Good luck paying renewals until then.

 

[Kuffy]

I've had quite a few chats with people who seem to think £2,000 is cheap for a business domain name. The problem is, they never seem to like my names, and don't want to pay me to find one for them. They seem to think they can do it all themselves, and end up with names that I think are under £100 retail.

I suspect I'm mixing with the wrong people.

 

[urlurl]

the old saying goes; "you get what you pay for"

people who hand register $10 names for their business don't have faith it will succeed and most likely wont

 

[todaygold]

the old saying goes; "you get what you pay for"

people who hand register $10 names for their business don't have faith it will succeed and most likely wont

Completely incorrect. A business will not fail because of their domain name. A pizza shop, candy shop, furniture store, etc. isn't going to go out of business because they didn't spend thousands on their name. Most people use a search engine to find a company...and if the company is any good, they will be found. Most 'normal' everyday people don't care much about domains, that doesn't mean their business won't succeed.

 

[urlurl]

im not saying the crap name will make them fail. the lack of confidence (faith) it will succeed is one factor some companies dont succeed.

if im not sure my business idea will be a hit, i will just go out grab a $10 reg and test the waters.

If i know my idea is a home-run, i don't mind investing $x,xxx in a good name.

 

[todaygold]

if im not sure my business idea will be a hit, i will just go out grab a $10 reg and test the waters.

If i know my idea is a home-run, i don't mind investing $x,xxx in a good name.

That's not how non-domainers think. You care about domain names, some random guy opening a pizza shop doesn't. That doesn't mean he lacks confidence.

 

[DaveX]

Its important to realize that "end users" really refers to companies. Most individuals would pretty much settle for alternate names at reg fee.

 

[iAchilles]

I reached out to the owner of a singular EMD offering the plural for sale, it has more search volume and targeted type in traffic that generates revenue via PPC.

Not interested was the response I received. It never ceases to amaze me how end users can be so oblivious.

I made my case and presented the facts and the next response I got was how much. Based on the first response I'm not confident of a sale. But this just highlights your average end user attitude towards domains.

 

[DaveX]

I reached out to the owner of a singular EMD offering the plural for sale, it has more search volume and targeted type in traffic that generates revenue via PPC.

Not interested was the response I received. It never ceases to amaze me how end users can be so oblivious.

I made my case and presented the facts and the next response I got was how much. Based on the first response I'm not confident of a sale. But this just highlights your average end user attitude towards domains.

I always have to remind them what one, two, three or more additional clients, orders, or sales a month or even a year can add to their bottom line. It amazes me the lack of understanding of this.

I had a real estate company wanting to buy a domain. A really good domain. And they are crying about spending 10k. One, just one, real estate closing could be 5 times that in their market. Crazy.

 

[garptrader]

When we were looking for an apartment in Wst Palm Beach we met with a realtor who told us we would not find anything in the area for less than $2500 monthly. Commercial real estate on the street their office is located is five figures monthly. Some properties in Palm Beach are listed in the millions of dollars and a new bay view condo complex under construction is being advertised as "starting at $5 million.". Yet their domain name has three hyphens and an abbreviated word - obvious reg fee. So much for location, location.

 

[todaygold]

When we were looking for an apartment in Wst Palm Beach we met with a realtor who told us we would not find anything in the area for less than $2500 monthly. Commercial real estate on the street their office is located is five figures monthly. Some properties in Palm Beach are listed in the millions of dollars and a new bay view condo complex under construction is being advertised as "starting at $5 million.". Yet their domain name has three hyphens and an abbreviated word - obvious reg fee. So much for location, location.

And apparently they are doing just fine with the domain name they have if they can afford that. What's that saying?: 'If it ain't broke, don't fix it!'

 

[urlurl]

its also about image and perception too.

 

[todaygold]

its also about image and perception too.

And to 99% of the population Florida-RealEstate is just as fine as FloridaRealEstate...it's only domainers that really care.

 

[urlurl]

i disagree, even before i got into domaining i knew dashes (and .info) were all crap. show me a multi-billion dollar business that uses dashes in the domain name