question Do you or should you factor inflation when you price your domain?

[WhoaDomain.com]

Hello NP,
This question is pretty specific so I hope it’s not moved to another thread.

so we’ve all done this or at least we should.

when we get a price inquiry for our domains from either Afternic or Uniregistry or Sedo because we have not put a price on it yet. We jump on Namebio or similar and check for comps and then act like we know what we are doing lol and decide what price to ask.

how exactly do we honestly, realistically and fairly price our domains based on Comps?

also more important if the closest comp based on Keywords sold in 2018 or 2010 how exactly do you calculate the price of your domain you might sell today in 2021 which is 11 or 9 years later?

Or

do you simply price your domain based on a similar comp from 2018 or 2010?

or do you ask for a price factoring in the years since that comp’s sale?

do you factor into price inflation? Or ask for 2018 prices for 2021 selling domains?

yes or no?

or are you like Hugedomains and price everything around $1600 to max $8500. Nothing publicly priced above $10,000 just to move inventory.

 

[DanSanchez]

I've been mentioning inflation with every inquiry, now I'm doing monthly price increases instead.

 

[Compassion]

I've been mentioning inflation with every inquiry, now I'm doing monthly price increases instead.

I feel this angle is important.

As fiat currencies are printed ad infinitum, one of a kind assets like a supreme domain are a wonderful hedge.

The whole industry ought to take note of the collapsing purchasing power of fiat currencies and level up as one industry.

 

[Samer]

I think inflation is the “big bad boogeyman”
always overstated.

The beauty of living in the U.S.

LOW inflation (even if it’s creeping up like mad

 

[bmugford]

I agree with multiple points here...

Samer - Inflation is always the boogeyman. Yep. Things inflate over time but fiat currencies backed by major countries that have power are not going to just collapse.

Compassion - Domains are a great hedge vs inflation. Agreed.

I think you need to worry about inflation over a long period of time, not like month by month. We are coming off a pandemic where people basically did nothing for over a year. It is natural to have transitory inflation as more people are spending money and doing stuff like traveling.

You can make the same argument about money being printed as shitcoins being made daily or NFT. Those are things that literally can be made in an unlimited manner.

Actual assets, with actually scarcity and demand, are always good hedges. I would not worry about inflation on a short time scale.

When it comes to domain sales, not all types of domains have gone up in value over the years. While most have, many are outliers or formats that are not worth as much today.

Brad

 

[ultradog]

Checking NameBio is one part of pricing process, but hardly the best one. There’s been a surge in demand for really good names and if that’s what you have, your price should reflect that. What you’d have to spend to replace your domain should be part of your thinking; and NameBio is not really good for that. Auctions — many of which are shown in NameBio — tend to go for lower prices. But single purchases can go terribly high. I’d look for what comparable domains to yours are being priced at.

 

[WhoaDomain.com]

Thanks for all the replies NP.

keep them coming.

so here’s some scenarios.

the highest comp for my domain is $1000. Very similar to mine. But sold in 2012 so the captain obvious easy bet would be price my domain at $1,000 and call it a day or a win but that would be 2012 money. So how would you go about increasing from $1,000 for inflation?

$100 per year? $500 per year? $1000?

what if the highest comp was $10,000?

$1,000 per year? $2000?$3000?$5000?

@ultradog

“What you’d have to spend to replace your domain should be part of your thinking;”

Wow.... I like this. How have I never thought of using this statement? Too busy trying to show value to a buyer to buy my domain. Never looked at it as what I would lose if I sold for cheap.


I think I’ll use that angle from now own.

a buyer doesn’t need to know that I had no plans for the domain.

from now on I think I’ll say “I plan to develop all my domains. Here are the comps for similar domains. If I sold this domain to you for $100 or $1000. I’d be out a $35,000 or $50,000. And it would cost me that much to REPLACE IT.”

That’s brilliant. No reasonable person could argue with you on that.

thanks @ultradog

 

[bmugford]

“What you’d have to spend to replace your domain should be part of your thinking;”

Wow.... I like this. How have I never thought of using this statement? Too busy trying to show value to a buyer to buy my domain. Never looked at it as what I would lose if I sold for cheap.

Yeah, that is more important than any of the inflation stuff. Quality domains have mainly been going up in value because of demand, not inflation.

I rarely factor in what I paid for a domain. It is worth what it is worth independent of that.
I might have bought a .COM for $1,000. I would not sell it for $5K when it would cost $20K+ to replace it.

It works the other way also. I might have spent $5K on a domain that is worth $1,000 today. If you can do better things with the money sometimes it makes sense to cut your losses.

Brad

 

[bmugford]

the highest comp for my domain is $1000. Very similar to mine. But sold in 2012 so the captain obvious easy bet would be price my domain at $1,000 and call it a day or a win but that would be 2012 money. So how would you go about increasing from $1,000 for inflation?

Really any decent .COM has the potential to sell for mid $X,XXX+ to the right buyer.

I would not worry about comp sales in such a low range, especially from (9) years ago. It was a different market then. You could pick up solid (2) word .COM for low $XXX easily. Nowadays the same quality domains are selling for mid $XXX to low $X,XXX even on the reseller market.

This is not really inflation related, it is more demand related.

Brad

 

[bmugford]

a buyer doesn’t need to know that I had no plans for the domain.

from now on I think I’ll say “I plan to develop all my domains. Here are the comps for similar domains. If I sold this domain to you for $100 or $1000. I’d be out a $35,000 or $50,000. And it would cost me that much to REPLACE IT.”

From my experience if a potential buyer brings up the "you are not using it" logic, it almost always leads to a non-serious lowball buyer.

Who cares if the domain is a developed website. The logic is flawed.

Your usage is as an investment, like in any other field where people invest in things.

Brad

 

[biggie]

if a potential buyer brings up the "you are not using it" logic, it almost always leads to a non-serious lowball buyer.

Who cares if the domain is a developed website. The logic is flawed.

Your usage is as an investment, like in any other field where people invest in things.

Hi


i totally agree

if the domain was being used as a developed website, then most likely the "name" wouldn't be for sale.
therefore, we/domainers are doing a service, by having such names available.


imo...

 

[900Worldwide]

Comps don't matter much if no ones see the same value..

 

[lock]

You are negotiating one at a time unless you are price pointing. If your name is too cheap it doesn't matter if nobody knows. If they see a bargin and bin it you will be taking it as is the asking price. Inflation doesn't matter unless your selling names for $20.

 

[oldtimer]

Interest and demand by end users for your domain which in turn correlates to how many offers you might be getting, the strength and stability of your financial situation which in turn determines your negotiating powers and your need for cash flow, the size and scope of the market and the economy that the category and field of your domain relates to which in turn might be an indication of if you are dealing with a multibillion dollar company or a small mom and pops business, and the inherent potentials built into your domain to increase the prestige and the bottom line for the end user's business should determine what price you set for your domain. In my opinion these factors are more important than the inflation.

Disclaimer: This opinion is not based on my personal experience since as a collector and hobbyist I don't have a big track record when it comes to domain sales.

 

[BrandPlease]

Dont overthink it, price it appropriately to the current market value - mixing in "finance" related terms into a domain name discussion (to a potential customer) will get you 1. into a conversation you are not prepared to have - unless you are an economist. 2. A lost sale.

Overcomplicating the sales process - particularly for the buyer - will cost you $.

GL as always!

 

[BrandPlease]

Comparable Domains:

• ‘Whats is the replacement cost of the domain? What's your cost to you to replace the domain name once sold, in today's market & environment?.
  • Comparables should be no more than 12 to 24 months old while 6 months is better.
    
  • Comparables should ‘like’ in as many ways as possible including category, length, age, extension and more.

 

[twiki]

if the domain was being used as a developed website, then most likely the "name" wouldn't be for sale.
therefore, we/domainers are doing a service, by having such names available.

Domainers are an integral part of a sane domain ecosystem.

Unfortunately there are a lot of uneducated idiots out there who don't understand this. For some weird reason they think good domains should be free and up for their grabs.

 

[twiki]

@WhoaDomain.com

You worry about the wrong thing in my opinion - inflation. This is important on longer term, but not on shorter term.

What matters right now is how well the market is going and especially where the prices are. I can tell you that in 2021 prices of .com domains at least have gone up. Not just from NB data but from my own observations as well.

The impact of sales trends is way bigger than inflation on a daily basis.

So the question is - what do you want to do?

If you want to become cheaper, keep prices as they are. You will indeed get cheaper as time goes by.

If you want to maximize profits, and your sales % has been good, why not matching the market increase and up them accordingly. Actually I think this has to be done by any domainer on an annual basis. Domains are being increasingly scarce, especially .coms, so... the answer is pretty obvious.

I've increased my prices a lot in 2021 and preparing to go even further.

Edit: Also, a very important factor at play is how liquid you are.

If you have great liquidity and are not pressured to sell, then increasing prices might be a good idea.

On the other hand if you are pressured for cash to pay for renewals, you might want to even reduce them a little - this will probably get you some cash faster at some reduction in the number of your names. It's for each seller to decide.

 

[twiki]

Really any decent .COM has the potential to sell for mid $X,XXX+ to the right buyer.

How would you define a decent .COM in this case?

 

[DuDD]

I've been mentioning inflation with every inquiry, now I'm doing monthly price increases instead.

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