debate Are domainers unknowingly destroying domaining!?

[artstar]

Domaining from my research within the last 10 years has revealed that the influx of new domainers has seemingly destroyed domain values.

I say this because it seems they are selling domains at far lower prices than they should which leads to destroying values on other domains when this practice is done.

For example look at namebio 3d domain sales

The sales prices IMO are far below what they might have been even 2 years ago

I think too many newbie flippa domainers are flipping domains in quantity to get a fast buck but they were unwittingly destroying domain valued across the board by performing such sales practices!

Is it just me or do you see the same trend?

:P

 

[JB Lions]

You seem content that domains values are being destroyed by flippers !

Nothing new is happening. Some people quick flip, some hold for years for the right deal and everything in between. Typical stuff. If you see domains you think are selling for less than they're worth, buy them. I think you may be feeling you're not getting the number of sales or sale prices you want, so you're putting it on this. You mention 3d sales and you have 3d names in your sig.

You can check the last 3 years, top reported sales, look at #100 each year

2015 - $60,000, this could go up since we have 4 months left and the last quarter is usually good for sales
2014 - $64,000
2013 - $55,000

So not seeing any destruction of sales, plenty of people are doing just fine.

 

[johname]

For example look at namebio 3d domain sales

The sales prices IMO are far below what they might have been even 2 years ago

3D also had a domainer fad component to it, which has gone down. So you need another barometer

 

[johname]

I am not alluding, I am stating a fact that there was a big 3D fad in domaining and not so hot now.

So don't base on just 3D domains (that how the post reads)

\/ I am referring to the peak enthusiasm that domainers were grabbing everything 3d that was left. It was actually comical.

You are the one that talking value being destroyed by domainers not me. I am simple stating that you need to look at other sales not just 3D sales. Good Luck!

 

[Kate]

I disagree with the main idea (flippers killing the market).

As wisely said above flipping is a form of recycling. Instead of worrying about flippers you should focus on acquiring quality merchandise to sell to end users. That is, if you want to be a long term seller. Besides, flippers are not always selling stuff that is comparable in quality. They are not necessarily your competitors.

However, the domainer to domainer market has crashed but that was years ago and for different reasons. Not because of flippers.

The bottom line is, if you are not doing well you must question your practice. Rick Schwarz says that every second you are minding somebody else's business, you are ignoring yours. I agree with this.

 

[infosec3]

In order to fully understand the origin and nature of this argument, we must ask the question: How much is a domain name worth? In reality, the value of a domain is what the buyer who needs it wants to pay for it. There are millions of domain names for which you will never find a buyer who would pay you $20K.

Let me illustrate this for you with my own example. Although once in a while I sell four-figure names, the bulk of my sales are hand-registered names, for which end-users are ready to pay between $200 and $700. Whenever I find an end-user willing to buy one of those, I sell it.

Sure, I could sit on the name for ten years and ask for five figures everytime some one inquires, but the questions is: Who is going to buy it at that price? Even for more valuable names, I cannot play the waiting game.

Rick Schwartz, Mike Mann, Frank Schilling (all great investors and my respect to them) can afford to say no one thousand times even for the less valuable name in their portfolio, because they do not need to accept $5K in order to keep going... But, are you in that league?

It is true that there are cases in which regardless of how much I might have wanted the $1000 offered, I did not accept until I got at least a few thousand. But for me that is not the norm. That is the exception. Others can play the waiting game if they want and can. That is fine. You proceed according to your own circumstances and needs, but in my case, the concept that guides my business is constant liquidity.

 

[NameFit]

I would add, these are the principles of free market. Even though every market goes through ups and downs, this market is very very stable because of its nature. Even though every name is unique - but every name has 100's of alternatives. People who are registering the names today and selling those names at $20-$100 profit, who do you think they are selling to? resellers only - and they are not end users. What these buyers are doing - reselling or hope to resell. It is up to them whether they want to sell at $25-$50 profit now or $100 - $200 profit later. It is all recycling. Also if you register a name today, how do you compare that to quality of the name registered more than 5 years ago. Drastically different. Long term sellers are in for long haul. They have a strategy and built their 'portfolio' (sure the flippers can also call theirs 'portfolio'). Long term buyers have a plan, and they have a strategy that is proven over years and they do not get wavered, they do not deviate from their principles (because there is no need to).

Regarding the names that are 'hip' - trust me, long term buyers do not normally go by what is 'hot' or 'will be the future'. Warren Buffet does not even invest in technology companies. I remember he talking about Facebook IPO saying that 'I am not sure in 10-15 years these companies will be there'.

Long term is a different strategy that works for some while not for (most) others. Just like in stock market, there are daily traders and there are long term investors.

 

[equity78]

Good to hear its all in my mind so I'm simply jaded then!

Moving on then,,.....

:PO.o

No it's not jaded it is frustration that everyone goes through from time to time. Mike Berkens who gets max value 99.9 % of the time one time said to me that BuyDomains was hurting domain valuations by selling too cheap.

The flipside when you got 1million domain names you need volume and if your customer is someone looking for a $2,500 name you sell them a $2,500 name rather than they go elsewhere.

Everyone is not from a first world country, someone may be somewhere where a $1,000 is a major sale that betters their life in a big way.

 

[Greg]

Personally I don't care if someone thinks I sell a name too low. That is for me to decide. Every name I own is for sale and those people are able to purchase any name at this "low" price. The problem with those same people is they never (or rarely) do buy the names, they just complain.

 

[Rick Ace]

I think the entire argument that domainers are somehow ruining the market is flawed. Demand comes from the consumer side. When demand goes up, and supply goes down, prices will naturally rise. If many newbie domainers under-price their domains, they'll soon run out of domains to under-price, and the overall market-rate will catch up.

That's also what we saw with the 4L .com situation. A lot of good names were being sold at low prices, until there just weren't any good 4 letter names left in the hands of newbies.

 

[equity78]

It depends where you look in .com if it is getting affected, 3L,4L,4N and 5n have not been affected they are up from 3 years ago.

EMD as Pug pointed out are down. People are focusing more on brands, I show Mike Berkens names all the time and Mike has certainly purchased plenty of EMD's like MotorCycleHelmets.com. Last time I showed EMD's he said those names are not getting as many offers and he cares more about brandables like SuperSeats.com which he sold for $48,000.

 

[Fancy.domains]

Hello,

I have owned (and randomly sold) domains since 1997-98, but I started to focus on this about 2 years ago.

My strategy is to flip my "worst" domains + LLLL.coms (the latter are not bad, but easy to flip with a profit), just to get funds for building up and renewing the portfolio that I believe in. My goal is to within 2-3 years have a portfolio of no more than 750 strong names, that I will NOT try to flip, but to keep, waiting for good offers.

So I do the flipping game to build up and pay for my portfolio.

 

[Vinod R]

Technology related domain names are mostly like that, when a technology comes in or makes some starting waves domainers jump on the tail. If for instance in my case, I'm a close watcher in VR related names and there was a great sale happened on the VR front vrxxx.com which sold for 10,000$, so after that sale there has been a surge in the registrations and many of us have taken the possible names in VR. We will hold on to it for some time maybe some 2-3 years and we may drop that off, since in the future after 3 years we find out that there is not much of end user adaptation of the VR technology. So after 3 years we might sell it for very low price or just drop it off.

Your second opinion might be true that many names are sold cheap, if that is the case you can buy them, new members in any business is good since the markets expands, people who think that domaining is gambling / lottery will shed off from the business model when they find that it's not quick money and proper research, luck and timing is important.

Its your own business you are the ultimate decision maker about how you sell. There are many smart guys here who buy a name for 10$ and sell the same for 20$ in a day's time, while there are semi experts who holds on for sometime and sell the same name for 100$ , and then there are gurus who holds on for years the same name and sell for million dollars. Which type you need to be is totally your choice, everything has its advantages and disadvantages.

 

[Kate]

A domainer can also be a flipper and a long term holder at the same time.

We all have names in our portfolio that are better than others. When you have quality names, get repeated inquiries and unsolicited offers you don't flip them. You want to hold out for the right offer. There are some names that you want to liquidate fast, there are others than you are willing to keep as long as necessary.

 

[Canadian]

Some people rather make a quick dime instead of a slooooow quarter...

 

[equity78]

First off if like JB said if people think something is so cheap, buy them, it has been my experience that just never seems to happen, from the domains are being sold too cheap crowd.

BuyDomains has been selling domains cheap for years.

The 3-D fad is dying — and this film critic couldn't be happier ...
nypost.com/.../the-3-d-fad-is-dying-and-this-film-critic-c...
New York Post
Mar 18, 2015 - Now it appears the audience is catching up with us: The 3-D fad is dying, and I couldn't be happier if you told me Kevin Hart was retiring.

The naysayers were right, another 3D fad has come and gone. - Off ...
www.giantbomb.com/.../the-naysayers-were-right-another-3...
Giant Bomb
Another embarrassing fad has left us yet again, it seems the entertainment industry wants to shove 3D at consumers every 30 years or so, and every tim.

Was 3D Printing Just a Passing Fad? | TIME
time.com/3916323/3d-printer-stocks/
Time
Jun 10, 2015 - Take nanotech, an investor fad a decade ago that faded because it wasn't startups that ... Along with the buzz, stocks of 3D printers caught fire.

 

[Jen-Sin]

I respectfully disagree as well.

We should thank the new domainers because as they buy up more domains, it further restricts the supply of domains. This will only help the established domainers who have good names to begin with, as new domainers buy up the alternatives to their good names.

This however might be true only for .com and new gTLDs, but not .net, .org, .info, .biz.

 

[DomainGist]

I say this because it seems they are selling domains at far lower prices than they should which leads to destroying values on other domains when this practice is done.

The massive influx of alternative extensions is the more obvious reason for falling domain prices.

Massive increase in supply Vs little or no increase in demand = falling prices.

Has nothing to do with the number of 'domainers', but the number of domains, as simple as.

Also, with an account created in 2014, aren't you part of the "influx"? If indeed there has even been one, namepros traffic (quantcast) has remained fairly static in the two years in which they have had their traffic directly 'quantified', seems to imply that there is no more activity now than there was two years ago? As namepros is by far the biggest domaining community, if there were a vast increase in the number of people trading domains we'd expect the number of visitors to have vastly increased too?

There have also been some radical changes in domaining which have been created as a result of google algorithm changes. Take penguin for example, which massively devalued exact match domains, there was a time when you could just buy a three or four word exact match domain like buylaptopbagsonline.com, throw up a wordpress microsite, create a few hundred artificial backlinks, and quickly rank easily at #1 for the phrase "buy laptop bags online" within a few weeks.

As a result affiliate marketers would pay very good money for domains like that, thousands in the right niche, I was one of them in fact, I had several hundred exact match domains, almost half of which were developed, almost all of which just siphoned traffic from google and sent it straight to amazon or ebay for a % of the resulting sale.

Several times I dropped several hundred dollars on domains which I wouldn't spend reg fee on now, and I considered them a bargain at the time, because I could spend $300 on a domain, throw up a microsite and make it back in a couple of months....

.... meanwhile, the death of the EMD has coincided with the rise of the brandable, which are now more 'google friendly', and people build brands now because their strategy for organic/free/cheap traffic now requires them to build up large social media followings.

So in that two years I'd argue that demand and prices for strong brandables has significantly increased, I'm sure sites like BrandBucket have grown exponentially in the past few years?

Domains are just a commodity aren't they, demand increases and decreases, arguably the value of the types of .com domains where supply is limited has continued to increase, look at what has happened to the price of LLLL.com domains in just 2015 alone, at the end of last year I was passing on the opportunity to buy mediocre ones for $30 to $40....... and if I'd purchased I could have trebled or even quadrupled my money even just by flipping them on namepros auctions, where prices are famously low.

LLLL.com domains currently look a better bet than bitcoin!

 

[greggb]

Domaining from my research within the last 10 years has revealed that the influx of new domainers has seemingly destroyed domain values.

I say this because it seems they are selling domains at far lower prices than they should which leads to destroying values on other domains when this practice is done.

For example look at namebio 3d domain sales

The sales prices IMO are far below what they might have been even 2 years ago

I think too many newbie flippa domainers are flipping domains in quantity to get a fast buck but they were unwittingly destroying domain valued across the board by performing such sales practices!

Is it just me or do you see the same trend?

:P

Even if domainers are unknowingly destroying domaining, there's nothing we can do to stop them, making the conversation we're having now somewhat futile. Though I've never refrained from participating in conversations before for the simple fact that they're futile. So here are my thoughts.

The domain market is very unique in that every domain name is unique. No two domain names are exactly alike. And only one person/business has the domain name a potential buyer is looking for. So domainers are never really directly in competition with each other, like businesses who sell men's clothing, or potatoes, or sex toys. And because domainers are never in direct competition with each other, the prices one domainer sets has very little, or probably more like no effect on the business of another. You can't just go somewhere else to get a domain name you have your eye on.

So to answer your question, no I don't see such a trend.

 

[artstar]

Some people rather make a quick dime instead of a slooooow quarter...

Well for sure but its affecting your domain values! Do u even care?


The

 

[baseballworld]

3D also had a domainer fad component to it, which has gone down. So you need another barometer

I agree remember 3d replaced 2d. As rd will come or something else.

 

[artstar]

Good to hear its all in my mind so I'm simply jaded then!

Moving on then,,.....

:PO.o

 

[disaac81]

I see the problem from the other end, look at auction prices on GD or SEDO where people are asking for 5 figures for real crap names with hyphens, numbers, complete and utter turd names. They are so bad that it is laughable and the seller probably has issues more so than a 0 understanding of value in a name \ brand.

But I agree on the other side, great names are worth big bucks, no doubt.

 

[ResoluteDomains]

Domaining from my research within the last 10 years has revealed that the influx of new domainers has seemingly destroyed domain values.

I say this because it seems they are selling domains at far lower prices than they should which leads to destroying values on other domains when this practice is done.

For example look at namebio 3d domain sales

The sales prices IMO are far below what they might have been even 2 years ago

I think too many newbie flippa domainers are flipping domains in quantity to get a fast buck but they were unwittingly destroying domain valued across the board by performing such sales practices!

Is it just me or do you see the same trend?

:P

I think that will always be there - low $ flips where others feel the value is much greater...

If you feel that domain "a" was flipped for a very low price - lower than the owner should have gotten, then it would stand to reason that you could still make $ from that domain - no?

 

[garptrader]

IMO there is far more supply of aftermarket domains than end user demand. Thus, even .COM registration growth has been slowing recent years. While some of the new TLDs in real estate and geos sound interesting, there is no real need for hundreds of new TLDs. How many of those seven million nTLD registrations are held by investors? Perhaps 95-99%%. How many of the remaining 6.x million will be acquired in the aftermarket by end users over the next several years? Maybe 1% annually max. So if you are paying premium renewals and see less than 1% turnover in a nTLD portfolio you are screwed. Even 1% turnover in a .COM portfolio with $10 renewals results in negative cash flow if acquisition price is more than reg fee and sales price is less than $1000 (keep in mind median sales price of .COM at SEDO around $600) and commissions are greater than zero (15-20% industry average).

ex: 100 domains x $10 renewals = $1000 annual renewals
Reg fee domain portfolios will likely result in lower turnover but industry average is about 1%
Median sales price $600
Commission $600 x 15% = $90
Cash flow $600 - $90 - $1000 = Yes, higher turnover and sales prices are possible and no one makes you sell a domain via Godaddy or SEDO but parking is insignificant for most domain portfolios post 2005

The only way to make real money with domains is to launch a business (not just a website). Look at Techcrunch and see all the IPO startups with crap reg fee domains raising millions in startup capital.