A domain is just a domain until someone emails about it?

[Chris_C]

Just a bit of a rant, not intended to offend but it might anyways.

*snip and rewrite*

Thankfully noone read that.

The point of the post is that an undeveloped domain is a commodity like anything else. While it is agreeably subjective, an undeveloped domain's value is not based upon who the purchaser is. It's based upon the quality of the domain, the usefulness of the domain, the current market for domains, etc. When I go to buy a car, thankfully they don't ask me what I'm going to use the car for and what my salary is before determining the price. Certainly there is some dickering involved, but the point is that the price is determined before I ever step into the room.

*snip again*

heh, what prompted this? PMs and email responses with reg fee level domains and asking prices of $xxxx.xx ++.

Lately I've got the impression that buydomains has outsourced their autoresponse software to everyone so that immediately IF someone is interested in a domain then it MUST be worth $2500.00+.

At any rate, my advice is determine what you want for the domain, write it down and then try to sell it at that price if you're not doing that already. If it's reg fee you paid, then you shouldn't be looking it as a lottery ticket, but rather a stepping stone to a larger portfolio. Get appraisals from knowledgable people such as the forum here.

 

[armstrong]

I think you'd be closer comparing domains to real estate. If you invest in a lot of small properties, how would you react to these three situations:

1. A land speculator you know approaches you inquiring about a property.
2. John Nobody approaches you asking to buy your lot because he thinks it will be a nice place to build his house on.
3. McDonald's calls you up to inquire about availability.
4. Mr. Sleaze wants your lot so he can build a brothel.

In each scenario, your price should be different.

 

[Chris_C]

fundamentally disagree (:

 

[armstrong]

Also, domain prices are very much a function of supply and demand. There's probably more supply than demand for most domains, so in each situation your perception of market demand for your domain will change dramtically. Hence the change in price.

 

[Chris_C]

domain prices are very much a function of supply and demand....each situation your perception of market demand for your domain will change dramtically

I have absolutely no problem with this, if generic 1 words are "hot" as determined by the market then you ought to be selling them for more.

 

[armstrong]

Consider my domain NXi.net. Domain resellers would be willing to pay $100 to $250 for this name. If you offered $250 today, I'll probably take you up on it.

But if I get an email inquiry from a company called "Northen X-Net, Inc.", and research shows that they are a big US company, then I'll be stupid to let it go for less than $1,000. In my mind, demand suddenly went up, and so will the price.

 

[Chris_C]

I think that hits the nail on the head in terms of what I think is flawed about most domain resellers marketing strategy. The *demand* for domain in fact didn't go up at all. When you purchased the domain you bought it in the hopes that the acronym would stand for something meaningful to a person. From there you determined a value based upon the domain, no?

What happened when this NXI came along is that you got what you were hoping for, is the value of the domain inherently worth more all of a sudden? IMO you might get lucky if you find a buyer who is inelastic to price or competely unaware of the market. (you've already in some ways gotten lucky because you've found an ideal buyer).

At any rate I do get your point but IMO it amounts too much to speculation to be viable on it's own. Then again that's probably not what you personally are doing but there are many people who are. In fact taking it miles further :P

It's also a slippery slope to use your real estate example. Let's say I am a contract developer who has built a community on the riverside. I *think* asians will like this community in particular because it has what I think is an *asian* feel to it. For that reason, I decide that anyone who wishes to purchase a house who is asian must pay 50% more than anyone else....

 

[fifihopkin]

Differnet prices for the same item is the basis of a lot of successful businesses. Happens everywhere.

Airlines - there will be people sitting next to each other on a flight that have paid different prices for the same thing. The person who bought 3 months in advance gets it cheap. The person who buys the night before pays the highest price. So what is the true value?

Most people use a shotgun approach in domain business. Price all the domains high. If they sell one for $1000 it paids for my holding cost for another year. The other thing is if you sell one for market price $25, you lose money. The time it takes to negotiate terms, handle payment, holding cost etc you made a $1 for an hours work. Sometimes it is cheaper to let it expire. In the case of nxi, if everyone would only pay $25 for it but nx inc would pay $1000 who is right? Whats the value? Value is what someone is willing to pay. There is a buyer at every price. As my old grandaddy would say "there's an arse for every seat".

In negotiation, the person who reveals all their details is at the disadvantage. If you are letting someone know your age, salary, need for domain etc you will pay a high price (unless you have the poor sob story going). If someone contacts me and says, I absolutely must have this domain...I'm thinking hold on to your ankles here it comes.

So there is lots of values. Market value, true value, intrinsic value.

 

[armstrong]

Originally posted by Chris_C
Let's say I am a contract developer who has built a community on the riverside. I *think* asians will like this community in particular because it has what I think is an *asian* feel to it. For that reason, I decide that anyone who wishes to purchase a house who is asian must pay 50% more than anyone else....

That will get you in legal trouble. But if you had one lot right next to an Asian food store, can you get away with adding a little bit to the price for prospective Asian clients? Probably, since you know the property has more value to them. Should you? I don't know.

 

[Chris_C]

Airlines - there will be people sitting next to each other on a flight that have paid different prices for the same thing. The person who bought 3 months in advance gets it cheap. The person who buys the night before pays the highest price. So what is the true value?

Interesting point but in this case it is not the customer who is affecting the ticket price but an actual difference in the consideration being traded. Namely, if you buy a ticket 6 months in advance it's the equivalent of two values lumped together. 1) The ticket, and 2) A six month $$ loan that you've given to the company. Compare that with purchasing a ticket the day before, the exchange isn't the same thing.

In the case of a domain, what added consideration is there being factored in? The domain is still the same domain regardless of who the buyer is.

can you get away with adding a little bit to the price for prospective Asian clients?

Sure, but then it's never really a crime if you don't get caught right? You could also potentially get away with stealing from the register of the asian food store :P

What I'm trying to get at is that IMO it's not good business to base the price of an object on the buyer. This shotgun approach is why I think there are more hobby domain sellers than people doing it as a viable business and making real profits.

 

[NickRac]

Re: A domain is just a domain until someone emails about it?

Originally posted by Chris_C
an undeveloped domain's value is not based upon who the purchaser is. It's based upon the quality of the domain, the usefulness of the domain, the current market for domains, etc.

I could not disagree with you more.

My last name is Racanelli

If someone I didn't know owned the domain racanelli.com and it was for sale I would bet you anything I'd be up there offering more than other people becuase I relate directly to the domain. If you and I are going back and forth for the domain I garuntee I would be offering more because the domain is, well, ME.

Things...anything is worth only as much as people are willing to pay, regardless of the most respected appraisal or thoughts.

 

[Grrilla]

We are dealing in a very fluid, sometimes vague market and i tend to lean towards the supply and demand/ let the needs of the buyer help determine the cost. However, I think we have to hedge somewhat, and try to balance both of the above approaches, which can be a real pain-I'm in the middle of this juggling act now. What should I spend more time on? Proactive searches and marketing, (which IMO implies pricing that reflects my perception of the desirability of the DN to the buyer), or development of my homebase/website, (which IMO favors a more static pricing approach)? The answer for me is that I need to be working on tailoring names/pricing to individual requirements and be flexible enough to shift gears and to simultaneously have a "set price" list to go with. How I balance and prioritize the two work loads, is determined by what is getting the most action at the moment.

 

[Coastalguy]

GREAT THREAD Chris! Interesting posts!

In the real world there are different prices for different buyers (as Armstrong has mentioned).

If you let your conscience rule then "1 price fits all". There is nothing wrong with that as long as you realize that the world we live in doesn't always pan out that way.

"Life is just a game and there's many ways to play!"

ST

 

[Wanda]

Originally posted by armstrong
I think you'd be closer comparing domains to real estate. If you invest in a lot of small properties, how would you react to these three situations:

1. A land speculator you know approaches you inquiring about a property.
2. John Nobody approaches you asking to buy your lot because he thinks it will be a nice place to build his house on.
3. McDonald's calls you up to inquire about availability.
4. Mr. Sleaze wants your lot so he can build a brothel.

In each scenario, your price should be different.

Valid points Armstrong!!

Thread poster..Chris:

In regards to the "CAR" purchase situation.. you must understand that when you buy A CAR.. that there is NOT ONLY ONE OF THOSE CARS AVAILABLE.. but there ARE MANY other "buyers" who will be "owners" of the VERY SAME CAR..
yet.. in the DN industry.. it's quite different..

THERE IS ONLY ONE .COM and ONE .NET..
and therefore the value can be whatever is determined fair/agree'd upon between the buyer and seller..

 

[jj2ii3344]

Agreed with WandaCox and ArmStrong. I strongly believe that the price of a domain is directly related to the importance of the domain to the prospective buyer and the amount of money the buyer is willing to pay. An otherwise worthless domain may appear as a treasure to someone else, thus, the price of the domain suddenly goes up multiple folds for this buyer.

 

[Chris_C]

wheee fun thread and a tough crowd :P

If you let your conscience rule then "1 price fits all".

Actually ethics and morality (even though I do have opinions as well) are not what I'm after. I *personally* think that shotgunning and basing prices on buyers is not going to land the most profits at this game (: Take a look at sedo and every domain is listed as a "Make Offer". Just give it a price for goodness sake, from personal experience I'm just more likely to make a purchase decision when I see that. The average internet surfer spends no more than a few seconds attempting to glean the content of a page before moving on, I'm guessing it's the same with domain surfing. For instance, a friend of mine a couple of days ago bought a very nice domain at $10k from a company that went "tits up". Being UBER jealous (I would have sold your soul for this one even though I didn't have the budget for it) I looked around the same niche for similar domains. Low and behold I found one listed at $900.00... Did I buy it? No but I put in an offer at $650 and will likely purchase regardless now anways. Woudl I have made any attempt if it were a "Make offer"? Not a good chance (in fact it was the 3rd of 4th domain I looked at and actually had a price) and as an aside the domain is probably worth wholesale about $300 and probably somewhere around the $500-$3000 for the enduser.

Would I have paid more? I'm really not sure but does it matter? The domain is an ok fit for what i'm doing and something I was willing to put the $$ in now for the future. The domain seller now has whatever profit to place where they see fit.

you must understand that when you buy A CAR.. that there is NOT ONLY ONE OF THOSE CARS AVAILABLE.. but there ARE MANY other "buyers" who will be "owners" of the VERY SAME CAR..
yet.. in the DN industry.. it's quite different

Then again there are a near infinite number of permutations of .com and .nets. I'm not saying that chris.com isn't worth infinitely more than wanda.com (hehe, just kidding ), I am saying that a better judge of value is the tangible factors and not WHO is buying the domain. Basing business strategy by waiting for and capitalizing on a WHO is speculation, and IMO petty (or hobby).

*get's ready to duck*

 

[Elefekt]

well IMO i think that a domain is like real estate as armstrong has said. i think its just a plot of land and if its in a certain area (hawaii) its rather expensive because of the location. the same with domains if its got a certain value the price will go up. then lets say they built a house it would go up even more just like if a site is built for the domain.

 

[redhippo]

well this thread is the longest discussion i have seen. great. lots of pros and cons. ideas and comparison. strong personal feeling and strategies.

my two bit summary. there is no such thing as a good/bad domain name. every single name is UNIQUE(whether it be com info net org) because there are definetly NO duplicates.

unlike cars, unless you customised to the niff extremes which what you can do with great web designs.

VALUE is ascertain by Buyer. maybe brand consious?, prestige? not else to buy? is that why a GUCCI MUCHI suit cost $XXXXXX
why a made in timbucktoo =$XX?? hmmmm... I dont know

just that domaineering isnt quite an exact science yet...no magic formulaes

maybe we should compare it to stocks?

anyway what am i talking about.......?

 

[Coastalguy]

I remember reading a thread here that started off something like this: "Looking for a name. Budget $500.00". You should have seen the entries. Many names listed at $50 previously were now submitted for $500 or there abouts (and why not). I did not read any entries that said: "Name was $50 and still is". That's just the way the game is played. A motivated buyer!

We all want to get top dollar for our best names (don't we?).
ST

 

[fifihopkin]

Does service come into it?

If someone built a complex for Australians (big BBQ, big built-in fridge for beers, place for the pet Kangaroo) I would expect to pay more for the customisation. If I was a Canadian and bought it and resold it later to an Australian for 50% more...I'd be feeling pretty happy with myself.

How about if I see a name with traffic, buy it to be resold because there is a niche for it. I fight hard with the traffic parkers to get the name. Snatch it. Put up a for sale sign. Should my future buyer pay a premium for my services? I managed to save the name for resale. The name might only be worth $25 but it is for sale at $500 because of the work I put in. To anyone cruising past it may look like a rip off...but there might be a reason for the price.