Domain marketplace model

[belmar313]

Hi, how are you?
I was looking at sites like DomainMarket.com and HugeDomains.com where they offer some mediocre domains at prices like $30,000. I imagine they can only be bought by a very interested end user, but nevertheless, how do they get someone to pay such prices? What percentage of their portfolio might they sell? Is it doable?

 

[WhoaDomain.com]

I've always thought of this myself.

I think that the biggest buyers of domains are huge companies like

Amazon
Microsoft
Google
Johnson and Johnson


Some have inventories of huge amounts of domains.

These companies like domainmarket and huge domains simply sit and wait age their domains and these companies eventually come around if the domain is an obvious good keyword DN


And thee occasional company here or there.

Win win really.

Plus I suspect perhaps these companies save on renewals by hosting their domains on their own servers? Not sure though so don't quote me.

Great post!

 

[bonin]

Just follow Mike Mann on Twitter or FB and you will find out how many domains are sold via domain market

 

[Aaron.A]

I think it's to set the customers expectations so high that when they buy a 500$ domain for $9000, they think they've won the lottery .

I was lucky enough to get some footage of his reaction just after he closed weareparents.com

 

[belmar313]

I think it's to set the customers expectations so high that when they buy a 500$ domain for $9000, they think they've won the lottery .

I was lucky enough to get some footage of his reaction just after he closed weareparents.com


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Yes, I imagined the same thing....they play with expectations...people see those prices and automatically think ''this must be a great name''. They make their customer think the domain is worth that or even more.

 

[BlueprintMedia]

A domain is worth what the next person is willing to pay for it....

 

[belmar313]

Yep I agree. Actually, I was thinking that creating such a site offering low priced domains could boost sales...but not really....when studying Economics we learned that as price goes up, demand drops...but there was one situation for "luxury or status" goods where happened the opposite...the more expensive, the more attractive. I believe that in this case the same thing happens. If you offer such domains at very low prices, corporate buyers might think they are buying crap and they might not be associated with a "cheap domain". However, if you charge them $10,000 (which is still pocket money for some) for an $xxx domain they will believe they are acquiring a great name and thus their name will be associated with a high price tag. Maybe this is the idea behind it. on such sites I've seen newly registered domains with no search volume, no competition and no CPC with a price tag of $30,000.....interesting...

 

[Kuffy]

Yep - you can be too cheap. Back in the days when I was a systems programmer, I quoted £800 to write a device driver for a punched card reader for a micro-computer. I lost the job because the guy said I was too cheap. He went with a guy who quoted £2,500, and that guy didn't ever manage to create a reliable working driver.

 

[belmar313]

Yep - you can be too cheap. Back in the days when I was a systems programmer, I quoted £800 to write a device driver for a punched card reader for a micro-computer. I lost the job because the guy said I was too cheap. He went with a guy who quoted £2,500, and that guy didn't ever manage to create a reliable working driver.

Amazing....and he might have missed a good job for much less....yep, I believe the same might apply to these business models....

 

[dordomai]

Hi, how are you?
I was looking at sites like DomainMarket.com and HugeDomains.com where they offer some mediocre domains at prices like $30,000. I imagine they can only be bought by a very interested end user, but nevertheless, how do they get someone to pay such prices? What percentage of their portfolio might they sell? Is it doable?

very low % sell for this price but the ones that do make up for all others that did not sell..

 

[WhoaDomain.com]

Register good domains with words that last.. Think long term. Wait for a special. 1-5 years sell.

It's a waiting game.

A domain regged today for 5 years say at domain.com say in VR or AR or iot or drone or biometric or even geo will only increase in value over time. In theory.

Even at after market. $50-$300 investment can turn into $xx,xxx. Over time if you pick a domain with "staying" power.

Mike Mann always posts his sales and it's a great marketing tool.

It gets in the news.

Mean I wouldn't put it past anyone to create an offshore account with a company of its own buy a domain for $100k that he or she just registered transfer it to the account of that offshore company that he or she just created.

The $100k technically stays in their pocket.

Result? He or she becomes toast of the town. As the domainer who sold a "head scratcher" domain for $100k to an undisclosed buyer.

How many times have you ever heard this that headline in the domaining industry?

And if you check the domain. It's not used for anything just parked.

We all assumed it's just someone who saw value in that domain for some strange reason.

But the seller now gets tons of publicity for it.
And can now have the clout to ask for nothing less than $xx,xxx.

Lol

Sure not all the sales will be like this just occassional. Just to keep them relevant and on the lips of every domainer. It makes them the pros thee auhorities of domaining.

It's actually brilliant way to get free advertising.
News worthy articles stay forever in website pages. Ads you must pay monthly for

On websites there are two pieces of valuable real estate the top, the right and bottom and middle.

And there is the middle middle the actual meat and potatoes the article itself

Where do you choose to be? Monthly pay? Or permanent free ad forever?

A few pioneers had to be doing this for publicity in the "good ole days" prior to strict kyc policies now they are gods.

Give you any ideas?

 

[HotKey]

Most of it is smoke and mirrors. Believe something long enough, it becomes a reality. It's like the real-esate industry...ridiculous over-the-top house prices is modus operati now. Only way to keep in the black when you need to buy again.

 

[EmotiveDomains]

Yep I agree. Actually, I was thinking that creating such a site offering low priced domains could boost sales...but not really....when studying Economics we learned that as price goes up, demand drops...but there was one situation for "luxury or status" goods where happened the opposite...the more expensive, the more attractive. I believe that in this case the same thing happens. If you offer such domains at very low prices, corporate buyers might think they are buying crap and they might not be associated with a "cheap domain". However, if you charge them $10,000 (which is still pocket money for some) for an $xxx domain they will believe they are acquiring a great name and thus their name will be associated with a high price tag. Maybe this is the idea behind it. on such sites I've seen newly registered domains with no search volume, no competition and no CPC with a price tag of $30,000.....interesting...

Very good point. In the same way billionaires all want to have the most expensive yacht in the harbour, perhaps there's a certain prestige and bragging rights associated with owning the most expensive domains, regardless of whether they were actually worth it.

Hopefully domain prices will go the same was as the art market, which billionaires treat as an investment.

Perhaps we should all price a few of our domains up at $50 million to see if they get any attention

 

[belmar313]

Very good point. In the same way billionaires all want to have the most expensive yacht in the harbour, perhaps there's a certain prestige and bragging rights associated with owning the most expensive domains, regardless of whether they were actually worth it.

Hopefully domain prices will go the same was as the art market, which billionaires treat as an investment.

Perhaps we should all price a few of our domains up at $50 million to see if they get any attention

I totally agree with your point. A high price doesn´t make a bad domain good. BUT if it´s a decent domain and someone is willing to pay for it, a high price MAY actually make it more attractive to the right investor. It might make him think the investment is worth it.

And yes, I have always compared the domain market to the art market, where some domains that are maybe mediocre were once sold at a huge price, and they will continue to be valuable just because someone was once willing to pay huge money for it. It's an interesting point.
Maybe we could start trying with some domains hahaha. Who knows?

 

[Paul Nicks]

of course domain beauty is subjective, but setting an anchor price is pretty important to at least get a conversation started. DomainMarket and HugeDomains both do a good job of pricing their inventory rather than going with the "make offer" route. Buyers know that fixed prices are likely still negotiable but at least the starting point has already been established which makes the negotiation easier.

 

[Addison]

I was looking at sites like DomainMarket.com and HugeDomains.com where they offer some mediocre domains at prices like $30,000. I imagine they can only be bought by a very interested end user, but nevertheless, how do they get someone to pay such prices?

It's a numbers game. If you have enough domains, you will eventually have a domain that someone (or some company) really wants (or needs) and they'll be willing to pay an exorbitant fee for it.

They list domains at that price on mediocre domains for two reasons:

1. To highball. They can never get more than they ask for on a sale. They start with a high price and negotiate from there, in an attempt to achieve the highest sale price possible.
2. Price priming. Most of their domains sell in the $1,000 to $3,000 price range. Those random domains of the same quality (or worse) that they list at $30,000+ help make the rest of their inventory look like superb deals. The sticker shock of seeing a domain you don't want listed for $30,000 and then the domain you do want listed for $3,000 will cause many buyers to think, "That's one-tenth the price of that $30,000 domain name so $3,000 isn't that bad."

This sales method is psychological mixed with lottery.

 

[Haykay2005]

It's a numbers game. If you have enough domains, you will eventually have a domain that someone (or some company) really wants (or needs) and they'll be willing to pay an exorbitant fee for it.

They list domains at that price on mediocre domains for two reasons:

1. To highball. They can never get more than they ask for on a sale. They start with a high price and negotiate from there, in an attempt to achieve the highest sale price possible.
2. Price priming. Most of their domains sell in the $1,000 to $3,000 price range. Those random domains of the same quality (or worse) that they list at $30,000+ help make the rest of their inventory look like superb deals. The sticker shock of seeing a domain you don't want listed for $30,000 and then the domain you do want listed for $3,000 will cause many buyers to think, "That's one-tenth the price of that $30,000 domain name so $3,000 isn't that bad."

This sales method is psychological mixed with lottery.

Nice point here

 

[newviewit]

Firmly believe lots of domainers price their domains too low, especially for brandable or high exact search search generic keyword domains that are very valuable to a company. But if you got junk domains with no chance at a high value end user then yes they'll never be worth much...

For example I sold ilounge.net for $2k and later found out Apple bought it... could of got $xx,xxx. Same happened with TweenWeekly.com.

If a large company wants a domain they will pay almost anything for it. Single marketing campaigns that run for a few months for big companies cost $xxx,xxx or more, and if a specific domain matches their marketing plan they'll have no problems investing $xx,xxx into the proper domain.

If you're investing $xxx,xxx into starting up a new company, branding is essential! Again these buyers will have no problem spending $xx,xxx/domain.

 

[CJ6]

I have 1 domain priced insanely high. I am not interested in selling it. But, I'd be happy to sell it for the 7-digits that I priced it at. Yep, I'm crazy. But, like I said, I don't want to sell it.

 

[robert widener]

I have 1 domain priced insanely high. I am not interested in selling it. But, I'd be happy to sell it for the 7-digits that I priced it at. Yep, I'm crazy. But, like I said, I don't want to sell it.

LOL , wow .......... who knows someone may come along & buy it from you .